The Potomac Nationals are issuing an ultimatum to Prince William County lawmakers: sign a new stadium deal in July or wave goodbye to the minor league team.
The P-Nats have been negotiating with county supervisors since last summer on a deal to build a $35 million stadium near Stonebridge at the Potomac Town Center. But as supervisors near a decision on whether to send final approval of the project to a ballot referendum this November, team owner Art Silber says the county can’t afford to wait any longer if it wants to keep the Washington Nationals’ Single-A affiliate in Prince William.
“This either gets done in July or 2018 will be our last season in the area,” Silber said in an interview. “If we do not have a deal in place at that point, then there will be no deal.”
The county signed a nonbinding “letter of intent” with the team in March, agreeing to the framework of a deal to finally help the P-Nats move out of the aging Pfitzner Stadium. Prince William would build the new facility by raising money through Industrial Development Authority bonds, and the team would pay the county back over the 30 years or so.
Yet some supervisors have expressed concern about the structure of the deal and suggested that if the team can’t make its roughly $2.7 million annual payment to the county, taxpayers would be on the hook instead. That’s why Supervisor Pete Candland, R-Gainesville, wants to put the deal on the ballot this fall, and he’s called for a second vote on the issue at the board’s June 20 meeting — the same measure died on a 4-4 vote in April.
But Silber and the owners of the land where the stadium would be built, the JBG Cos., are imploring supervisors not to approve a referendum. Tom Sebastian, JBG’s senior vice president of development, puts it in stark terms: “A vote to go for the referendum is a vote to kill the project.”
“From the very beginning, the process that we’ve been working on and the timeline we’ve followed, there was never any discussion about a referendum,” Sebastian said. “In fact, if there had been, I’m not sure our company would’ve proceeded with the negotiations.”
Silber says that Minor League Baseball is the main force driving this urgency.
The league has deemed Pfitzner an unacceptable facility for the team to play in but has repeatedly granted the P-Nats “waivers” to let them stay put as they work to build a new stadium. MiLB currently expects the team to start playing in a new stadium in time for the 2019 season, and Silber says league officials have told him that their ability to offer any more extensions “expires” after July.
Jeff Lantz, a league spokesman, says he “cannot confirm or deny a deadline has been set.” But Silber says the league has made it very clear that they need an answer out of either the board’s meeting on July 11 or the session on July 18.
He says that’s because people in two other communities have already expressed interest in buying the team, and he would need to start the process of selling the team now so that the new owners could meet the league’s 2019 deadline.
Silber says MiLB president and CEO Pat O’Conner will attend the board’s June 20 meeting to help explain these issues, and Lantz confirmed that O’Conner will make the trip for the gathering.
But Candland says the board has yet to receive any “official communication” from MiLB that they need an answer by July. In fact, he finds it “highly surprising” that the league would demand an answer before a potential November referendum.
“Three months shouldn’t make the difference between having the deal and not having the deal,” Candland said. “It would shock me if that’s the case.”
Roger Snyder, a former county planning director and a vocal opponent of the stadium deal, also believes Silber’s urgency is merely “brinksmanship.” He notes that Silber’s been “under the gun” from Minor League Baseball for years as he’s pursued a new stadium, most recently making similar claims as a deal appeared to coalesce back in 2012.
“This is the man’s modus operandi,” Snyder said. “It’s the classic line of ‘I’ll take my ball and go home.’”
Candland has also long been opposed to the proposed deal, and he believes a ballot referendum is the only appropriate move for such an “unusual” arrangement. Specifically, he worries that if the county issues the millions in bonds necessary for the project that credit ratings agencies wouldn’t look kindly on that sort of debt.
“The taxpayers of Prince William County are backstopping this deal,” Candland said. “If JBG and the Nationals can’t make their annual payment, the taxpayers are the ones to fill in that gap. It’s not JBG, it’s not Art Silber or anyone else, it’s the taxpayers that will have to make up that difference. It’s too much risk for me.”
But Silber calls any suggestion that the deal would impact the county’s credit rating or debt limit “totally erroneous,” even though Candland reiterates that the county’s lawyers have told him as much. Indeed, a report by one of the county’s consultants on the project, PFM, suggests that “the ratings agencies will view the bonds as the county’s debt and will include the debt in the county’s liability calculations.”
“That will absolutely have an impact on our ratings, we’re just not sure how much,” Candland said.
Spats over concerns raised by the county’s consultants are hardly uncommon between the stadium’s supporters and detractors. Candland also points to analysis from Brailsford and Dunleavy as a reason to view the project with some skepticism — the consultants worry that it may be “challenging” for the team to generate the revenue it will need to afford its annual payments to the county if it builds just a $35 million stadium.
Sebastian believes Brailsford and Dunleavy represents the “gold standard” when it comes to firms studying stadiums, but he and Silber both dispute the company’s findings in that regard. Silber says the firm didn’t consult the team ahead of issuing its report, since county staff were “so concerned over Freedom of Information Act requests” for the document, leading to some serious inaccuracies.
Chiefly, he believes the consultants overestimated the team’s annual expenses by about $2 million, which he chalks up to the firm’s prior experience studying teams that are about to move into a new market. He believes the P-Nats wouldn’t face the financial challenges associated with building a totally new fanbase, and would likely clear millions of dollars in profits even after paying the county its share each year.
“Our expenses are our expenses,” Silber said. “What you have to understand is that we’re in show business, but we don’t have to pay the talent.”
Silber also feels the consultants underestimated the size of the team’s potential market, and he says MiLB has signed off on the P-Nats’ financials. He notes that no modern minor league team has had to fold or leave a community due to financial concerns — Lantz confirms that the league hasn’t experienced that issue in “the last 30 years or so” — and he doesn’t plan to helm the first to do so.
“The cash flow is going to be there and my family is, frankly, going to do incredibly well,” Silber said.
Despite those assurances, Candland remains opposed to the plan, and is hoping the vote will go his way on June 20. But if it doesn’t, the team is poised to get the final approvals it needs just a few weeks later.
If supervisors do finally sign off on the deal, Silber says MiLB would likely give the P-Nats yet another waiver to stay in Pfitzner through 2019, with plans to open the new stadium in time for the 2020 season.
“We’re really looking forward to continuing the 33-year tradition of baseball in the county,” Silber said.