Narrowly, Charles Decides Stadium Is Worth Risk
Sunday, July 1, 2007
In signing the contract to build a minor league baseball stadium last week, the Charles County commissioners agreed that the government will finance the team owner's share of the construction costs under the county's low-interest bonds.
The commissioners voted, 3 to 2, to adopt the new financing structure, under which the county assumes the team owner's debt of about $8.5 million and receives annual payments for 15 years from the company. The arrangement gives the owner -- Maryland Baseball -- access to lower-interest bonds than those available on the commercial market.
In exchange, Maryland Baseball will make a one-time payment of $1 million to the county to cover potential construction-cost overruns for the $25.6 million ballpark, which is set to open in May.
"In our view, that's a very responsible and prudent way to make sure that there's an adequate cushion that would protect us from any unanticipated or unexpected cost," said Commissioner Gary V. Hodge (D-St. Charles), who introduced the motion to approve the financing arrangement.
The commissioners discussed the agreement during a lengthy closed-door session Wednesday night with staff, including a lawyer. The 3 to 2 divide marked one of the few times the board has split on a high-profile issue.
Commissioners President Wayne Cooper (D-At Large) and Commissioners Vice President Edith J. Patterson (D-Pomfret) voted against the financing plan because they said assuming the team owner's debt over 15 years would be too risky.
Although Cooper said he supports the stadium, he said, "the financial risk would not be worth the financial gain."
Cooper said the county asked Maryland Baseball to provide copies of tax returns, independent audits or fiscal statements to verify the company's financial stability and long-term ability to make the bond payments. He said the company declined to provide such documentation.
"They would not do that," Cooper said. "I didn't feel like I had been supplied enough backup or enough collateral for a bond."
County Attorney Roger L. Fink said Maryland Baseball was not required to provide financial records.
"They're a small, limited liability company, which is not publicly traded, so their obligation to reveal their finances is less than for publicly traded companies," Fink said.
Under the approved agreement, Maryland Baseball will give the county one annual payment as well as profits from box seats, concessions and naming rights in the event that the company defaults on its loan.