Exactly how the owners of a proposed $250 million sports complex in Chesterfield County plan to pay for the project has yet to be disclosed publicly. But independent consultants who studied a strikingly similar proposal in 2002 concluded the complex wouldn't fly without a significant infusion of local tax dollars.
As SportsQuest moves to begin construction on an increasingly controversial sports complex — ultimately consuming 250 acres near Genito Road and state Route 288 in western Chesterfield — the study completed seven years ago offers a sobering conclusion. The earlier project is nearly identical in size and scope, sitting on more than 200 acres in the footprint of the current SportsQuest proposal.
“Based on the facilities' projected demand and operations, as well as preliminary capital cost assumptions, it is expected that neither facility will generate sufficient revenues to pay for both annual expenses and debt service,” reports C.H. Johnson Consulting, a Chicago-based real estate consulting company that specializes in convention centers and sports facilities.
The study, paid for in part by the county and the project's developers, concludes that the cash flow generated by a $50 million, 9,000-seat sports arena and a $10 million soccer complex over the course of 30 years would be in the neighborhood of $1 million to $3 million a year, falling considerably short of the projected $3.9 million yearly mortgage payment.
During that 30-year period — the projected life of a planned tax-exempt bond issue in 2003 — Johnson estimates the funding gap at $51 million.
There are notable differences between the earlier sports complex and the current proposal by SportsQuest. One is professional sports anchors. The earlier proposal died in part because it hinged on relocating the Richmond Renegades minor-league hockey team, which was struggling financially. The earlier complex would have been anchored by other minor league sports teams, including an arena football team and possibly the Richmond Kickers.
The current proposal includes an existing minor league football team owned by SportsQuest, the Richmond Revolution, but no professional hockey or soccer teams have been announced.
Steve Burton, chief executive of SportsQuest, has stated publicly that he has the private capital and financial backing to make the project fly, but hasn't released details. In late May he struck a deal with the county to secure a key piece of funding. The county agreed to pony up $4.3 million — $2.3 million to lease nine of the planned 17 soccer fields off Genito Road for 20 years with a $2 million economic development grant. The money comes from the current parks and recreation capital improvement budget, delaying field and gymnasium upgrades elsewhere.
The earlier study, completed in February 2003, recommends several possibilities for public funding, including a county meals tax, reallocation of the excess lodging taxes being generated for the Greater Richmond Convention Center downtown, tax-increment financing (using increases in property taxes to pay off the bond debt), an admissions tax and sales tax rebate, among other possibilities.
But one thing is clear in the earlier study: The report says the project wouldn't fly without long-term public financing. “Despite the availability of private investment in this project, public funding is seen as necessary in order to make this project truly viable.”