20
Apr
2004
Most are in agreement that the improvements to Davenport's John O'Donnell stadium are impressive, if not spectacular. They should be for $13.8 million. The question remains: Are all the improvements necessary and is the cost justifiable considering the facility is only in use for six months, barring any serious flooding?
From day one, it has been hotly argued that the majority of the plans for renovating John O'Donnell Stadium have been financially absurd. The fact that the River Bandits, now the "Swing," are a Class A minor-league baseball team seems to evade the city's sensibilities. This prevailing "Build it and they will come" philosophy is becoming dangerously redundant. There is very little science to support that a Class A team can sustain such an over-improved, over-priced stadium past the honeymoon stage. Such spending during a time of heavy budget constraints reflects a champagne appetite with a beer purse.
The financial deal for the renovation of John O'Donnell was a ball-breaker from the start. Negotiations were all about how much taxpayers could bear without any meaningful commitment from owners Kevin Krause and various investors (Seventh Inning Stretch). Most of the community was willing to ante up the estimated $8 million for the necessary improvements to bring the stadium into compliance with professional standards and proper building code but drew the line at luxury suites and other such nonsense that increased the cost to $13.8 million - and this does not include the cost of a new roof, which was somehow not included in the cost of the project. How is this even possible? The city paid for no less than three sets of plans ranging from $300,000 to $500,000 in the past six years.
The financial arrangement for the additional cost of approximately $117,000 for a new roof is somewhat vague. The taxpayers will front the cost. Seventh Inning Stretch will pay us back out of its maintenance fund, which is already included as part of its lease payment. So, in effect, there are no additional monies coming back to the city for this expense. It's purely an allocation issue of the established annual lease payment, meaning that taxpayers are paying for the new roof.
It is essential to keep in mind that public support for renovating John O'Donnell was as much for sentimental reasons - preserving a historically unique landmark - as it was for any keen interest in baseball. Otherwise, why would we have suffered years of the team owners' unreasonable terms, veiled threats to abandon the Quad Cities, and the open animosity that characterized the relationship between the city and Kevin Krause? Adding insult to injury, then, is the selling of "naming rights" for John O'Donnell Stadium, obliterating the community's display of esteem for Mr. O'Donnell reflected in what was thought to be a perpetual bestowment.
The contract between Krause and the city gives most of the financial control of the stadium to Krause, who pays an annual rent of $102,000. In turn, Krause gets all the concession sales, regardless if sales occur during a baseball game or an event outside of baseball (the city is able to rent the facility for various events that don't conflict with the team's play schedule); rents from the boxes and luxury suites; advertising revenues; ticket sales; and various other revenue-generating opportunities now available as a result of the renovation. The city participates in 10 percent of the operating profits from concession sales during city-sponsored events, Seventh Stretch Inning's annual rent, and any revenues generated from leasing the stadium for special events.
Keep in mind that if it floods and the stadium is wet or is inaccessible for 14.5 days or more, Krause does not have to pay his annual rent for that year. Obviously, Krause and company are protected and making money, while taxpayers are absorbing the lion's share of the risk. The renovation is but another example of taxpayers fronting the cost of development. In this case, while we own the facility, we don't participate in any financial gain.
In the final analysis, taxpayers are footing $8.1 million of the total $13.8 million, nearly 60 percent of the project. The $6.5 million that Davenport is responsible for does not include the interest on the debt it incurred for the project. The question is: To what degree does the community actually benefit? Taxpayers will own the building after the 15 year lease, but at what cost? Is the amenity worth the price tag?
The financial deal for the renovation of John O'Donnell was a ball-breaker from the start. Negotiations were all about how much taxpayers could bear without any meaningful commitment from owners Kevin Krause and various investors (Seventh Inning Stretch). Most of the community was willing to ante up the estimated $8 million for the necessary improvements to bring the stadium into compliance with professional standards and proper building code but drew the line at luxury suites and other such nonsense that increased the cost to $13.8 million - and this does not include the cost of a new roof, which was somehow not included in the cost of the project. How is this even possible? The city paid for no less than three sets of plans ranging from $300,000 to $500,000 in the past six years.
The financial arrangement for the additional cost of approximately $117,000 for a new roof is somewhat vague. The taxpayers will front the cost. Seventh Inning Stretch will pay us back out of its maintenance fund, which is already included as part of its lease payment. So, in effect, there are no additional monies coming back to the city for this expense. It's purely an allocation issue of the established annual lease payment, meaning that taxpayers are paying for the new roof.
It is essential to keep in mind that public support for renovating John O'Donnell was as much for sentimental reasons - preserving a historically unique landmark - as it was for any keen interest in baseball. Otherwise, why would we have suffered years of the team owners' unreasonable terms, veiled threats to abandon the Quad Cities, and the open animosity that characterized the relationship between the city and Kevin Krause? Adding insult to injury, then, is the selling of "naming rights" for John O'Donnell Stadium, obliterating the community's display of esteem for Mr. O'Donnell reflected in what was thought to be a perpetual bestowment.
The contract between Krause and the city gives most of the financial control of the stadium to Krause, who pays an annual rent of $102,000. In turn, Krause gets all the concession sales, regardless if sales occur during a baseball game or an event outside of baseball (the city is able to rent the facility for various events that don't conflict with the team's play schedule); rents from the boxes and luxury suites; advertising revenues; ticket sales; and various other revenue-generating opportunities now available as a result of the renovation. The city participates in 10 percent of the operating profits from concession sales during city-sponsored events, Seventh Stretch Inning's annual rent, and any revenues generated from leasing the stadium for special events.
Keep in mind that if it floods and the stadium is wet or is inaccessible for 14.5 days or more, Krause does not have to pay his annual rent for that year. Obviously, Krause and company are protected and making money, while taxpayers are absorbing the lion's share of the risk. The renovation is but another example of taxpayers fronting the cost of development. In this case, while we own the facility, we don't participate in any financial gain.
In the final analysis, taxpayers are footing $8.1 million of the total $13.8 million, nearly 60 percent of the project. The $6.5 million that Davenport is responsible for does not include the interest on the debt it incurred for the project. The question is: To what degree does the community actually benefit? Taxpayers will own the building after the 15 year lease, but at what cost? Is the amenity worth the price tag?
