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Risky business?
By NATALIE TORENTINOS
Pearland City Council members will vote Sept. 8 on whether to support a proposed sports and recreation complex in the Shadow Creek Ranch area, one that could prove to be a financial risk.
The current schedule calls for construction to begin in 2012 and be completed by 2013, but an accelerated funding plan would allow work to begin four years earlier, with both phases starting construction simultaneously.
Included in the proposed complex are five softball, five baseball and two field used for either sport, as well as an indoor facility.
USA Partners Sports Alliance, a network of sports organizations and consulting firms chosen by the City to start the funding process, proposed a mechanism to issue bonds that will fund phases one and two of the park, providing for repaying bonds through a combination of sales tax, sponsorships and hotel residuals.
Sponsorship revenue is estimated to reach $860,000 yearly. The sponsorships are renewable, some being multi-year and others annual.
USA Partners anticipates that the project will fund its own debt, deeming it unnecessary for the City to repay $8 million in property tax debt. The facility’s estimated cost is around $17 million.
According to representatives of USA Partners, sponsors or hotels could opt out of the agreement if the project is not successful, and the City would have to make up any lost revenue.
USA Partners President and CEO JD Daniel said he is “confident in partnership commitments,” adding they could enhance the package.
Councilwoman Felicia Kyle expressed concern with the agreement, saying the “concept is unique, but the structure is gray.
“The big question is, how much of a risk is Pearland bearing? We have the risk, and [USA] Partners is bearing the reward. I want to see risks shared by both sides.”
Mayor Tom Reid said he was interested in seeing the project proceed in future meetings.
The facility will likely be named the George and Barbara Bush Sports Complex.
The current schedule calls for construction to begin in 2012 and be completed by 2013, but an accelerated funding plan would allow work to begin four years earlier, with both phases starting construction simultaneously.
Included in the proposed complex are five softball, five baseball and two field used for either sport, as well as an indoor facility.
USA Partners Sports Alliance, a network of sports organizations and consulting firms chosen by the City to start the funding process, proposed a mechanism to issue bonds that will fund phases one and two of the park, providing for repaying bonds through a combination of sales tax, sponsorships and hotel residuals.
Sponsorship revenue is estimated to reach $860,000 yearly. The sponsorships are renewable, some being multi-year and others annual.
USA Partners anticipates that the project will fund its own debt, deeming it unnecessary for the City to repay $8 million in property tax debt. The facility’s estimated cost is around $17 million.
According to representatives of USA Partners, sponsors or hotels could opt out of the agreement if the project is not successful, and the City would have to make up any lost revenue.
USA Partners President and CEO JD Daniel said he is “confident in partnership commitments,” adding they could enhance the package.
Councilwoman Felicia Kyle expressed concern with the agreement, saying the “concept is unique, but the structure is gray.
“The big question is, how much of a risk is Pearland bearing? We have the risk, and [USA] Partners is bearing the reward. I want to see risks shared by both sides.”
Mayor Tom Reid said he was interested in seeing the project proceed in future meetings.
The facility will likely be named the George and Barbara Bush Sports Complex.
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