Baseball Proposal:
Financial Overview
June 24, 2015
Bonnie Jewell, Budget Manager
Presentation Outline
• Summary of Davenport Presentation to Board
• Summary of Net Present Value Analysis
• Differences Debt Service/Term Length on Bonds
• Potential Stadium Revenues
• Local sales and meals
• Keep other-than-local share of sales tax
• Ticket tax
Presentation Outline
• Revised NPV with potential stadium revenue
• What gets us to a stadium & parking scenario
with NPV equal NPV with no stadium?
Davenport Presentation
• Not an affordability analysis
• Informal Tax Increment Financing (TIF)
• Looked at tax on improved land values
• To pay debt service on stadium/parking
• Considering County’s debt ratios
Davenport Presentation
Southpoint I
Current
+ Future Dev.
+ Dev. of
Parking Bay
Total
Southpoint II
Total
$78,990,000
$106,695,800
$185,685,800
$9,000,000
$185,000,000
$194,000,000
-
$87,000,000
$87,000,000
$87,990,000
$378,695,800
$466,685,800
• Build out at 1/5 per year for 5 years
• Parking bay developed in year 6
• 2% assessed value growth per year
Davenport Presentation
• 25 year, taxable bonds
• Interest only for first 5 years
• Capitalized interest for 2 years (borrow to pay debt
service)
Stadium
Parking
Total
Principal
$27.8m
$16.7m
Interest
$17.0m
$10.2m
Total
$44.8m
$26.9m
$44.5m
$27.2m
$71.7m
Davenport Presentation
Source: Davenport & Company
Davenport Presentation
• Debt ratios:
• Net debt as % of market value less than 4% - good
• 10 year payout at or above 60% - good
• Debt service as % of gov’t expenditures less than 12%
- cutting it close with only $2.9M buffer
Davenport Presentation
• Davenport’s conclusion: “By structuring the stadium and
parking deck debt service with capitalized interest for
two years and ramped up principal over the next three
years, the projected revenue streams exceed the debt
service in all years.”
• Revenue streams – only incremental RE taxes
• Debt service only – no other stadium related
expenditures
NPV Analysis
• Net present value converts a string of future revenues
(net of expenditures) to today’s dollar value
1. If no stadium constructed
2. If stadium & parking deck constructed
3. If stadium & parking deck constructed, and then sold
NPV Analysis
Factors:
• All utilities connections & stormwater mgmt fees
• 2 deputies per event
• 1 paramedic unit (2 personnel) per event
• Fire equipment for fireworks
• 1 PT employee experienced in facilities maint. oversight
• Property insurance for stadium
• Reimbursement of liability insurance taken by team
• Debt service on the stadium/parking
• Stadium & parking maintenance
NPV Analysis
Scenario
If no stadium constructed
If stadium & parking deck
constructed
Net Present Value
No Sale of
Sale of
Stadium
Stadium/Deck
$37.1m
n/a
($26.4m)
$6.6m
Debt Service/Term
25 Years
Stadium
Parking
Total
Debt Service-S
Debt Service-P
Principal
$27.8m
$16.7m
$44.5m
Interest
$17.0m
$10.2m
$27.2m
Total
$44.8m
$26.9m
$71.7m
Cap. Interest
$0
Next 3 years
$1.1m
Remainder
$2.1m
$0
$0.7m
$1.2m
Source: Davenport & Company
Debt Service/Term
20 Years
Stadium
Parking
Total
Debt Service-S
Debt Service-P
Principal
$27.6m
$16.6m
$44.2m
Interest
$12.5m
$7.5m
$20.0m
Total
$40.1m
$24.1m
$64.2m
Cap. Interest
$0
Next 3 years
$1.0m
Remainder
$2.5m
$0
$0.6m
$1.5m
Source: Davenport & Company
Debt Service/Term
30 Years
Stadium
Parking
Total
Debt Service-S
Debt Service-P
Principal
$27.9m
$16.7m
$44.6m
Interest
$22.3m
$13.4m
$35.7m
Total
$50.2m
$30.1m
$80.3m
Cap. Interest
$0
Next 3 years
$1.2m
Remainder
$1.9m
$0
$0.7m
$1.1m
Source: Davenport & Company
Potential Stadium Rev.
Assumptions:
Attendance – Yr. 1
Attendance - Stabilized
Concessions per capita
Merch. per capita
Conservative
5,100
4,100
Moderate
5,400
4,300
Aggressive
5,700
4,600
$10.00
$2.00
$10.50
$2.25
$11.00
$2.50
From B&D Venue’s report prepared for Fredericksburg
Potential Stadium Rev.
Year 1
Gate Receipts (x)
Concessions
Merchandise
Total Taxable Sales
Sales Tax Revenue (1%)
Meals Tax Revenue
Total Revenue
Conservative
$3,468,000
$3,468,000
Moderate
$3,672,000
$3,855,600
Aggressive
$3,876,000
$4,263,600
$693,600
$4,161,600
$826,200
$4,681,800
$969,000
$5,232,600
$41,616
$138,720
$180,336
$46,818
$154,224
$201,042
$52,326
$170,544
$222,870
Data derived from B&D Venue’s report prepared for Fredericksburg
Potential Stadium Rev.
Stabilized
Gate Receipts (x)
Concessions
Merchandise
Total Taxable Sales
Sales Tax Revenue (1%)
Meals Tax Revenue
Total Revenue
Conservative
$2,788,000
$2,788,000
Moderate
$2,924,000
$3,070,200
Aggressive
$3,128,000
$3,440,800
$557,600
$3,345,600
$657,900
$3,728,100
$782,000
$4,222,800
$33,456
$111,520
$144,976
$37,281
$122,808
$160,089
$42,228
$137,632
$179,860
Data derived from B&D Venue’s report prepared for Fredericksburg
Potential Stadium Rev.
If legislation passed to allow County to keep certain portion
of sales tax to pay debt service (§58.1-608.3):
Year 1
Concessions
Conservative
$3,468,000
Moderate
$3,855,600
Aggressive
$4,263,600
Merchandise
Total Taxable Sales
$693,600
$4,161,600
$826,200
$4,681,800
$969,000
$5,232,600
Sales Tax Revenue
$116,525
$131,090
$146,513
(2.8% add’l)
Data derived from B&D Venue’s report prepared for Fredericksburg
Potential Stadium Rev.
If legislation passed to allow County to keep certain portion
of sales tax to pay debt service (§58.1-608.3):
Stabilized
Concessions
Conservative
$2,788,000
Moderate
$3,070,200
Aggressive
$3,440,800
Merchandise
Total Taxable Sales
$557,600
$3,345,600
$657,900
$3,728,100
$782,000
$4,222,800
Sales Tax Revenue
$93,677
$104,387
$118,238
(2.8% add’l)
Data derived from B&D Venue’s report prepared for Fredericksburg
Potential Stadium Rev.
If $1 ticket tax in place:
Attendance – Yr. 1
Attendance - Stabilized
Yr 1 Ticket Tax Rev.
Stab. Ticket Tax Rev.
Conservative
5,100
4,100
Moderate
5,400
4,300
Aggressive
5,700
4,600
$346,800
$278,800
$367,200
$292,400
$387,600
$312,800
Attendance data from B&D Venue’s report prepared for F’burg
Potential Stadium Rev.
Best Case (All)
Year 1 Total
Stabilized Total
Conservative
$643,661
Moderate
$699,332
Aggressive
$756,983
$517,453
$556,876
$610,898
Compare Rev & Exp
Миллионы
Potential Baseball Rev & Exp
$6
$5
$4
$3
$2
$1
$0
2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044
Debt Service
Other Expenditures
Revenue
NPV Analysis
Factor in meals tax, local sales tax, expanded sales tax and
$1 ticket tax:
Scenario
If no stadium constructed
If stadium & parking deck
constructed
Net Present Value
No Sale of
Sale of
Stadium
Stadium/Deck
$37.1m
n/a
($12.0m)
$21.0m
What Gets Us There?
In addition to what’s in original lease, we’d need $2.76M in
revenue on an annual basis to get to equal NPV. $1.32M if
stadium is to be sold in year 31.
Scenario
If no stadium constructed
If stadium & parking deck
constructed
Net Present Value
No Sale of
Sale of
Stadium
Stadium/Deck
$37.1m
n/a
$37.1m
$37.1m
Questions
?