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Lindley Estes is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Lindley Estes.
Fredericksburg EDA endorses baseball proposal
COMPLETE COVERAGE: View all related stories and images on the Fredericksburg baseball proposal
Fredericksburg’s Economic Development Authority on Monday endorsed the conceptual framework of the proposal to bring the Hagerstown Suns and Diamond Nation to the city.
The EDA’s unanimous vote followed a presentation by Fredericksburg City Manager Bev Cameron on how the deal with the Suns and Diamond Nation would be structured.
EDA Chairman Chris Hornung abstained from voting. Hornung is a vice president for the Silver Cos., the developer of the Celebrate Virginia South project where the complex would likely go.
The proposal, which Fredericksburg City Council unanimously approved Aug. 27, involves numerous tax reimbursements and fee waivers that could be worth more than $22 million over 20 years.
Most of the tax reimbursements that the Suns and Diamond Nation could receive are the tax revenues generated at the stadium complex, which would include a 4,750-seat stadium for the Washington Nationals’ Single-A affiliate and five turf baseball and softball fields for Diamond Nation tournaments and camps.
The baseball investors, a group that also now includes Rosner Auto Group principal Ron Rosner, could also receive a percentage of the additional meals and lodging tax revenues generated citywide following the complex’s opening. That exact amount is still being negotiated.
Cameron said Monday that the city expects the development to generate about $2 million in new tax revenues for the city annually, not including the tax revenues generated at the baseball complex itself.
New Jersey-based Diamond Nation estimates that it would create demand for 25,000 hotel room nights a year, most of which would likely occur at the three newer hotels in Celebrate Virginia South. That would bring in significant lodging tax revenues for the city.
Cameron estimated Monday that the public sector will be contributing between about 40 percent and 45 percent of the total costs of the complex, much of it in the form of tax reimbursements that would be based on the team’s economic performance. He said the average for new Minor League Baseball stadiums built since 2000 has been between about 60 percent and 70 percent in public money.
The Fredericksburg EDA would serve as a pass-through organization under the proposal, receiving tax reimbursements from the city and passing them on to the team. That is why the organization’s formal approval was required.
There are still many steps remaining before the first pitch can be thrown out at the new stadium, at which Rosner Auto Group is purchasing naming rights.
About a dozen public hearings are expected before City Council on matters including the city issuing bonds for its portion of the project, an 1,800-space, surface-only parking lot estimated to cost $7 million. The city would keep half of the parking revenue generated at the lot, where cars would park for $2 a game, and the team would staff and maintain it.
The team must also formally apply to Minor League Baseball to relocate to Fredericksburg.
Perhaps the biggest hurdle that lies ahead is acquiring the land for the complex. The team is focused on acquiring the 38-acre site in Celebrate Virginia South that was once supposed to be home to the U.S. National Slavery Museum. That project has long been stalled, and the organization’s failure to pay city real estate taxes could lead to a tax sale auction soon.
The baseball investors are working to acquire the slavery museum land in advance of a Sept. 25 hearing on the matter in front of Circuit Court Judge Joseph Ellis.
Diamond Nation’s principals are scheduled to meet this week with the museum’s biggest creditor, Pei Partnership Architects, about a possible negotiated sale.
The baseball investors are also looking at two other sites in Celebrate Virginia South and one next to Rosner’s Volvo and Mercedes-Benz dealerships off Fall Hill Avenue.