For professional sports teams, making a bad deal can lead to a disappointing season or two (witness the Bills' decision to trade a first-round draft pick next year for the abysmal Drew Bledsoe). But when a municipality makes a bad deal on a sports stadium, the disappointing results can play out for years.
That's the situation in Monroe County, where outstanding debt on Frontier Field poses a long-term expense.
The facility, which opened in 1996, cost roughly $41.5 million to build. The state pitched in a $16 million grant toward construction costs, but the county covered much of the rest of the expense with county-backed bonds. The county still owes $24 million on the stadium, and servicing that debt costs county taxpayers about $1.7 million a year.
In early December, County Executive Jack Doyle decided to redirect roughly $700,000 in annual income generated by an increase in the hotel occupancy tax toward debt payments on Frontier Field (the money was initially earmarked for PaeTec Park). But even with that money, "It still leaves us with a million dollars that the county has to pick up every year," says Tom Frey, a member of the Greater Rochester Sports Authority, the body set up to oversee operations at Frontier Field and, initially, the construction of PaeTec Park.
The problem isn't that the Rochester Rhinos plan on leaving Frontier when PaeTec Park is completed in 2004, though that move doesn't help much, either. The Rhinos presence "never contributed an awful lot toward the Sports Authority itself or the operation of Frontier Field," Frey says.
"The ones that probably lose when [the Rhinos] move are the Red Wings," says Frontier stadium director Jim LeBeau.
That's because the Red Wings keep most of the revenue from non-baseball events at Frontier. (The Wings fork over 12 percent of concession proceeds to the county, which in turn gives the Rhinos 5 percent, according to the terms of the Rhinos' most recent lease. Negotiations on a new lease agreement with the Rhinos --- most likely a one-year deal with a one-year option --- are scheduled for January, but the concession revenue split is unlikely to change.)
Without revenue from concessions sales at Rhinos games, the Wings stand to lose between $150,000 to $250,000, according to Red Wings President Gary Larder.
The Rhinos "don't provide any revenue" to Frontier Field, LeBeau says, because even the few thousand dollars the stadium kept from concessions sold at Rhinos games last season was used to defray costs associated with the Rhinos' presence at Frontier, such as reconfiguring the field for soccer and more intensive maintenance of the grass.
"The real problem," says Frey, "is that the county just signed awful agreements when they first started [Frontier Field]." In particular, Frey says attendance estimates for Red Wings games were over-inflated.
Under the terms of the Wings' 20-year lease, the team gives the stadium a higher percentage of the income it receives from selling advertising space and concessions if its season-long attendance tops 300,000. "That might have happened the very first year," Frey says, "but it's never happened since."
Naomi Silver, who chairs the board of Rochester Community Baseball, defended the Wings' lease agreement with the stadium, saying it's "the most expensive lease for a baseball team that we are aware of in professional sports."
"We signed what we thought would be a fair lease," Silver says. "In years when we weren't drawing huge numbers, the county would get less of a cut. And the fact of the matter is that, like in all stadium situations that I'm aware of, the municipality has to pay the yeoman's portion of the cost of the stadium. That's how stadiums are built. If it was up to the private sports franchise to pay for the facility, there would be no new facilities. You can go to any city in our league and find that to be the case."
Silver says "most teams get all their suite revenue and get all the parking revenue" from their games, but in this case, those funds go directly to the stadium. Larder adds that the stadium --- and, thus, the county --- gets $125,000 in advertising revenue from the team regardless of attendance, in addition to a 50-cent facility-use fee on Red Wings tickets, which amounted to about $112,000 last season.
Silver hopes, even expects, that the Wings' new affiliation with the Minnesota Twins major league franchise will boost attendance --- and, as a result, revenue for both the team and the county --- next season. "I think people are as excited about this new affiliation as I've ever seen fans get excited about anything --- second only to the opening of a new stadium," she says.
On the down side, Silver says the presence of PaeTec Park will tighten an already-squeezed market for corporate sponsorship in the region, as teams vie for revenue from stadium advertising and suite sales. And in these tough economic times, fans will be all the more choosy when it comes to buying sports tickets.
In short, a good season for the Red Wings would alleviate some of the county's debt. If season attendance tops the 300,000 threshold, the county gets more money, and if more fans come from out of town and stay overnight in a hotel after the game, the county's occupancy tax revenue gets a boost.
But that all depends on how well the players swing the bat.
Essentially, "the county is stuck," Frey says. The Wings' lease won't be up for negotiation again for another 14 seasons.
"I don't think there is a solution," Frey says.
Doyle has made the case that the state should help the county pay off the debt on Frontier Field, and has brought up the state's forgiveness of a loan it authorized to help build Buffalo's Dunn Tire Park baseball stadium as precedent.
The two counties' situations, however, are not analogous. In Erie County's case, the state forgave a $22 million loan it made to help construct Buffalo's baseball stadium. Monroe County's debt is to the bond holders, not the state. And, according to Monroe County's chief financial officer, Gerald Mecca, the state cannot legally take on the county's obligation to those bond holders.
The state could, in theory, provide the county with a separate funding stream the county could then use to repay its debt on Frontier Field, but that would take the agreement of the governor's office and both houses of the state legislature, a situation that's "not a very common occurrence," Mecca says --- an understatement, to say the least.
Plus, as Mecca, Frey, and some local state representatives note, the state's facing a fiscal crisis that could reach $10 billion next year.
Democratic State Assemblyman David Gantt and Republican State Senator Michael Nozzolio have both pushed for state help with the county's debt on Frontier Field. Incoming, newly Republican State Senator Joe Robach says he's also willing to look into that prospect.
But as local Assembly Dem Joe Morelle points out, the state may be less willing to take on more of Frontier Field's costs given its previous grant to the stadium. "What Doyle is basically saying is that the state paid for half of the construction of Frontier Field, and now we wants them to finance the rest of it."
"That is asking an awful lot of the State of New York," he continues. "Given the state's financial situation, and given the fact we paid for half the construction to start with, it seems unlikely."