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Baseball warning from former Fresno mayor - El Paso Inc.: Local News

Baseball warning from former Fresno mayor

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Posted: Sunday, August 26, 2012 6:00 pm | Updated: 1:54 pm, Tue Sep 4, 2012.

Bringing in a Triple-A team to play at a new stadium in Downtown El Paso is the centerpiece of a now controversial plan for revitalizing the heart of the city.

While downtown baseball has kick-started successful downtown revitalizations for some cities, the concept touted by El Paso supporters hasn’t worked everywhere.

Two California cities hit hard by the recession and the collapse of home values – Fresno and Stockton – followed the model of building new downtown stadiums for Triple-A ball teams.

Earlier this year, Stockton declared bankruptcy for many reasons in addition to its stadium gambit.

Fresno, which built a 13,500-seat stadium in 2001 for the Grizzlies at a cost of $50 million, is struggling.

“We are making headway with downtown revitalization,” Fresno’s assistant city manager, Bruce Rudd, said. “The stadium itself has not generated the economic impact that was hoped.

“The challenge for the Grizzlies and Triple-A baseball has to do with the dynamics of our community, its economic base and maybe the popularity of baseball.”

Former Fresno Mayor Jerry “Jim” Patterson strongly opposed his city’s downtown stadium plan and vetoed it in 2001 as one of his last acts in office. But the incoming mayor and city council overrode the veto and put the stadium project back on the road to completion.

Before the boom years of the mid-2000s, Fresno’s unemployment rate hovered around 15 percent. When home values soared and construction along with them, that rate fell below 10 percent.

In 2006, the price of the average home in Fresno was just over $300,000.

Then came the recession in 2008. Housing prices plummeted, construction stopped and jobs. Fresno’s economy and unemployment rate are back where they were before the boom, Rudd said.

“That makes it difficult for activities and franchises like Triple-A baseball to do very well in a market where there’s very little disposable income,” he said.

With a population of 501,000, Fresno is three-fourths as large as El Paso and growing half as fast. The poverty levels of the two cities are virtually identical at just under 25 percent.

And household incomes last year were comparable, $37,428 in El Paso and $43,124 in Fresno.

“Given what we’ve gone through and with hindsight being 20-20, we probably would not have built the size of the stadium and the type of stadium that we built,” Rudd said. “It’s probably one of the best Triple-A stadiums on the West Coast, but to some extent, it may be overbuilt.”

Rudd said Fresno’s debt level is a problem, but the owners of the Grizzlies have done a lot to cover part of the bond payments on the stadium through the lease.

Originally, the team had to pay $1.5 million a year, but it has lost money and been unable to cover that in recent years.

The team, which ranked fifth in attendance in the Pacific Coast League for 2011, paid the city $690,000 in April for last year under a reduced payment agreement with the city.

In El Paso, according to the proposed stadium lease with the city, MountainStar Sports Groups it would pay the city $200,000 a year, plus a 10-cent surcharge on tickets that would go toward a long-term maintenance fund.

Doing debt

El Paso’s stadium project is to be paid for through the issuance of revenue bonds, provided that voters approve a 2-percent increasing the city’s hotel occupancy tax in November. The city has a back-up plan if the proposition fails.

Also on that ballot will be two major bond propositions totaling $473.3 million for a long list of quality-of-life projects.

Patterson, the former Fresno mayor, had words of warning for El Paso on hearing that the stadium and quality of life projects would add more than $500 million to the city’s debt.

Patterson, who served eight years as mayor, is now running as a Republican for a seat in the California House.

“I think I would have a lot to say if El Paso is using a lot of public money and not very much private money and if those who want the stadium are using a lot of political effort to spend public money,” Patterson said.

He conceded that El Paso and Fresno may not be an apples-to-apples comparison.

The recession had little impact on El Paso, but California’s housing crash had a huge impact on Fresno.

Patterson didn’t see the sense in borrowing heavily to build a stadium when times were better, and he thinks his dire predictions have pretty much come true.

“There was a strong political desire to have a stadium, but common sense and looking out for the taxpayer simply went out the window,” he said.

If El Paso wants a downtown stadium, he said, there are cities to look at, including Oklahoma City and Louisville, Ky., that pulled it off with little or no public debt.

“When I left office in 2001, we had a $20-million surplus and a Triple-A credit rating,” Patterson said. “We had approved over $1.5 billion in new business in the city.

“Now, 11 years later after reckless spending, borrowing and economic collapse, if you will, in California, the city of Fresno is in very serious financial straights. Financing the baseball stadium is part of the problem – not the single reason, but part of the reason.”


 

Email El Paso Inc. reporter David Crowder at dcrowder@elpasoinc.com or call (915) 534-4422, ext. 122 and (915) 630-6622.

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1 comment:

  • Dante2810 posted at 4:35 pm on Mon, Aug 27, 2012.

    Dante2810 Posts: 19

    I wonder how many of the people that read this and make the claim "well you can't compare El Paso to Fresno because they are not similar cities" are the same ones that tell us to "look at the success in Oklahoma City" as justification for ballpark.