Politics & Government

Council Gives Full Support to Suns', Diamond Nation Proposal

Ron Rosner purchases stadium naming rights.

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City Council voted unanimously Tuesday night to move forward with the Baseball Negotiating Team's recommendations.  To advance the public hearing and approval process, the approved resolution directs the city to:

  1. Refer the committee recommendation to the Economic Development Authority for its study and response;
  2. Initiate an amendment to the Comprehensive Plan (2007) to provide for the construction of an 1,800 space surface parking lot in Celebrate Virginia South, adjacent to the stadium complex site; and initiate an accompanying amendment to the City’s Capital Improvements Plan for a $7 million expenditure for the surface parking lot and refer both amendments to the Planning Commission for public hearing and recommendation;
  3. Direct the City Manager and City Attorney to work with bond counsel and financial advisors to develop a proposal for the public financing of the parking lot and any other aspects of the proposal requiring such advice;
  4. Direct the City Manager to prepare an amendment to the City’s Tourism Plan, identifying the proposed stadium complex as a tourism deficiency for purposes of qualifying for the state sales tax entitlement under Code of Virginia §58.1-3851.1 and the City Attorney to prepare an ordinance adopting the amendment;
  5. Direct the City Attorney to prepare an ordinance increasing the City’s admissions tax rate from 6 percent to 7 percent and to schedule the increase for a public hearing;
  6. Direct the City Attorney to prepare a Tax Increment Financing ordinance and schedule it for public hearing;
  7. Direct the City Attorney to draft a Tourism Zone ordinance for the project;
  8. Direct the City Attorney to draft a Performance Agreement for the project;
  9. Direct the Clerk of Council to publish notice of City Council public hearings as required;
  10. Direct the City Manager and City Attorney to take such other actions as may be required to bring the committee recommendation back to the City Council for formal consideration and;
  11. Dissolve the City Council’s negotiating committee.
Baseball Project Report and Proposal

Under the proposal released by the City Manager last week, Hagerstown Suns ownership in partnership with Diamond Nation will invest an estimated $29 million to purchase property in Fredericksburg, then design and construct a multi-use stadium with at least 4,750 fixed seats.  The project will also include five artificial turf fields for amateur baseball and softball. The team will own the stadium and the property.

In turn, the City of Fredericksburg will invest an estimated $7 million to acquire land for, design and build a surface parking lot with approximately 1,800 spaces.

According to Cameron, the city will issue bonds for development costs related to the parking facility in order to leverage the State sales tax clawback authorized by Code of Virginia 58.1-608.3.  The city and team will share parking revenues 50/50.  "The city’'s share of parking revenues is estimated to be $150,000 annually," Cameron said.  The team will operate, maintain and clean the parking facility.

"Perhaps the most important concept of the deal package is the use of performance incentives through a Tourism Zone structure as permitted by State law and City Code," Cameron said.  "The proposed performance incentives represent payments back to the team based solely on the team’s economic success," he said.

Cameron said the proposed deal minimizes the city’s risk and places the burden of performance on the team.  “The performance incentives also incent the team to support City of Fredericksburg restaurants and hotels,” Cameron said.

“This is not a usual model,” Cameron said.  “From what we can tell, there is nothing like this elsewhere in the country.”

“The city will return a portion of the incremental meals and lodging tax revenues which are generated city wide,” Cameron said.  “But we’re not in complete agreement yet on how we would do that,” he said. 

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A Goal Achieved, Now Moving Forward

“The public said not to finance a stadium and we achieved that goal,” Councilman and Baseball Negotiating Committee member Fred Howe said during the work session discussion of the baseball proposal. He was referring to the July 9 public hearing when an overwhelming number of speakers told City Council to say 'no' to a financing plan for a stadium.

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“The city is looking at a deficit in two years, and we have to generate revenue,” he said. “This is new revenue and it represents a huge potential … to jump-start Celebrate Virginia South and bring-in more tourism –-- especially families,” he said.

"The team is very interested in concluding the proposal with the city in the next 30 days,” Cameron said.  “The key deadline for them is the need to start working post haste for a grand opening in the spring of 2015.”

Specific business terms of the incentive are incomplete, according to Cameron.  Further discussion is needed, for example, for agreement on the “Meals and Lodgings Tax Supplemental Performance Grant” and to ensure the parking lot is available to the city for other uses.  These details will be ironed out in coming weeks.

“There is a whole lot of work represented here,” Mayor Mary Katherine Greenlaw said.  “Our city manager and our negotiating team are to be complimented for this unique pubic private partnership,” she said.   “We appreciate the amount of work and the thoroughness this proposal represents.” 

Greenlaw also commended Ron Rosner, founder of Rosner Auto Group, for his investment in the the project to bring the Hagerstown Suns to Fredericksburg. Rosner has purchased the stadium naming rights.

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