The Potomac Nationals and Prince William County appear close to a deal to build a new stadium for the minor league baseball team, according to documents obtained by InsideNoVa through a public records request.
Team owner Art Silber has pushed to build a replacement for the aging Pfitzner Stadium for four years and has targeted a site at Stonebridge at Potomac Town Center between Opitz Boulevard and the Wegmans grocery store for a 6,000-seat facility.
County records show that the team now has a framework in place for a complex deal to get the project off the ground and meet demands from Major League Baseball officials that the Washington Nationals’ Single-A affiliate leave Pfitzner.
Although no deal is finalized, correspondence released in response to InsideNoVa’s Freedom of Information Act request shows that the county, the team and the town center’s owner, JBG Cos., have been working since summer to reach an agreement.
The county wouldn’t be on the hook to directly to fund the stadium’s construction or to provide any kind of tax break to the team, according to the correspondence. However, the county would still play a pivotal role in making sure the deal moves forward through several key conditions. Chiefly, the county would have to raise $35 million using municipal bonds issued by Prince William’s Industrial Development Authority.
However, the Prince William Board of County Supervisors first would have to agree to send the proposal to the authority, which then would hold hearings and evaluate the arrangement itself. The board would then have to vote once more to approve the deal in totality.
Silber declined to comment on his discussions with the county, calling it “really premature to do so” and noting that he may have more to share after Jan. 1. The supervisors have not discussed the deliberations publicly, but the board has authorized at least three different closed-session meetings over the past few months to discuss the deal.
Obtained through the public records request, a Dec. 13 proposed letter of intent from JBG and the team to County Executive Christopher Martino sheds quite a bit of light on the subject.
At the heart of the deal, the county “will be responsible for the construction of the stadium” and would have to “issue bonds to raise approximately $35 million for the development of the stadium,” according to the letter.
A separate document prepared for the supervisors shows that the county’s Industrial Development Authority would raise that money with bonds, though Stephen Dawson, the authority’s secretary/treasurer, said he has yet to hear from the board on the issue. However, Dawson said that such a proposal would be “in line” with some of the authority’s previous projects.
Next, the county would have to agree to a lease with JBG for the seven-acre plot of land needed for the stadium at a rate of $450,000 per year. The county would then lease the stadium to the team for at least 30 years.
Over those three decades, the team would pay rent to the county “sufficient to cover the cost of the debt service” and the rent the county pays to JBG for the land. At the end of that period, all parties will have the option to extend these lease terms for an additional 40 years.
According to an October report on the negotiations prepared for supervisors by an Arlington consulting firm, PFM Financial Advisors, the debt for the project “would be viewed by the rating agencies as the debt of the county” and “the county would serve as the ultimate backstop should the Potomac Nationals fail to make timely and/or sufficient debt service/lease payments.”
Rick Eckstein, a sociology professor at Villanova University who has extensively studied the public financing of sports stadiums, said such arrangements involving municipal bonds to finance stadiums have become increasingly common.
“This saves them [the team] significant money because the municipal bonds have lower interest rates,” Eckstein said. “However, it eats into the municipality’s total overall borrowing capacity and might interfere with raising funds for other projects like roads and stormwater management.”
Under the Dec. 13 letter’s proposed deal, the county would also have to design and build a 1,400-space parking garage next to the stadium. The garage could also be used for commuter parking. In 2012, the Virginia Department of Transportation agreed to invest $15 million for the garage, but county documents show that it’s unclear whether the state will still fund the structure.
The Dec. 13 letter states that the garage probably will cost $21 million on top of the stadium’s price tag and suggests that the county is still working with VDOT to hammer out a “workable schedule for delivery of funds” to cover those costs. The PFM Financial report shows that the county will need to “update its applications or apply for various new state grants” to help cover the cost of the garage.
The consultants note there’s no guarantee the county will actually receive those grants and may not know one way or the other until the spring.
Complicating matters further is that a separate report prepared for supervisors in November by the Washington consulting firm Brailsford and Dunleavy Inc. shows that the Nationals and the county may be underestimating the cost of the garage and that it could actually come with a price tag from $32 million to $35 million.
"To the extent the county is not successful in securing grant funding for the complete cost of the commuter parking garage, the county would be responsible for either contributing cash or borrowing the remaining balance required for construction,” the PFM consultants wrote. “This amount could vary widely in total given uncertainty around construction costs and eligibility to receive grants.”
Finally, the Dec. 13 proposal outlines that the county would also have to pay an additional $7 million to JBG to help prepare the land for construction and cover any cost of a traffic study for the area. The traffic study could put the county on the hook to “design and implement any off-site transportation improvements” necessary for the project, although JBG would cover up to $250,000 of those costs.
The county would also have to “allow development” around the stadium site, whether it be “commercial, hotel and/or residential,” although that would be “subject to the normal site plan approval process.” JBG bought the whole town center property from Roadside Development last December.
The documents released don’t make clear whether Silber has made any progress in his long-stated goal of finding a naming rights sponsor to help fund the stadium. He previously said he hoped to cover up to half of the facility cost with a $1 million per year contribution from a corporate sponsor, but the Brailsford and Dunleavy consultants estimate that, at most, the naming rights would only fetch Silber $850,000 a year.
Brailsford and Dunleavy believe all that work by the county on the project would be worth the effort. They estimate that the project will generate more than $4.7 million in economic activity for the county each year and will directly support 84 jobs. The consultants estimate that the stadium can induce an additional $2.5 million in spending in the county and indirectly support 204 other jobs.
Eckstein, the Villanova professor, cautions that county leaders shouldn’t take those rosy projections at face value, and should think long and hard about whether such a deal is worth it.
“The promises never get met in reality,” Eckstein said. “There’s a Wegmans right next door, and I would imagine that the Wegmans probably does more business in a year, probably even half a year, than the stadium will do, all told...And I don’t think Wegmans asked for the county to pay for their construction costs.”