New baseball complex subcommittee created

June 21, 2009
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Kent County Commissioner Dean Agee, who also chairs the Finance Committee, named the members of a new subcommittee last week that will look into leasing 90 acres the county owns to the West Michigan Sports Commission for a new baseball and softball complex.

Agee said Commissioners Jim Talen, Richard Vander Molen, Art Tanis, Carol Hennessy and Gary Rolls will make up the subcommittee. Tanis will chair the group.

The acreage is on Ten Mile Road in Rockford near the county’s North Kent Transfer Station — a landfill that is owned by the county’s Department of Public Works.

Tanis told the Business Journal the subcommittee will have to work out the legal details involved with offering a long-term lease — likely for 25 years — to the sports commission. One hurdle the subcommittee will have to clear is making sure a lease appropriately compensates DPW, which bought the property.

DPW is an enterprise department, which means it doesn’t get taxpayer dollars and has to raise its own revenue from the services it provides. DPW used revenue it received from its ratepayers, mostly other municipalities, to buy the property on Ten Mile. So any agreement the county makes with the sports commission, whether it’s a lease or sale, has to consider the department’s customers and adhere to its contract with the ratepayers.

“When it is sold or leased or otherwise conveyed out, the ratepayers need to be considered and the asset needs to be added for their benefit. In other words, if we were to have somebody walk in and want to buy it for an astronomical sum, that money would go back into the DPW and it would affect rates, because then we would have more money to work with within the system,” explained Linda Howell, assistant corporate counsel at the county.

Because the DPW has to manage the property for the benefit of the ratepayers, it’s very unlikely the county can lease the property to the sports commission for $1 a year, as that nominal amount wouldn’t lower charges for the ratepayers.

It’s also too early to put a price tag on an annual lease because the county needs more information on what WMSC will do to the property and whether the project will make improvements to the site. Having the sports commission upgrade the property at its cost would qualify as a benefit to the department’s ratepayers.

“If they wind up leasing the property but improving the property in some way so that at the end of the lease, the DPW still has control over the property and then can sell it in its improved situation, that counts, too. That gets factored in,” said Howell.

“It’s so early in the development of this project that I can’t tell you how it will turn out as far as whether it’s a lease or a purchase or what those terms will be, because until the sports commission more fully develops its proposal and its plans, we just don’t know how it’s going to be structured at this point. We just have to acknowledge that the use of this asset has to be done in the context of the ratepayers.”

The sports commission wants to build the complex, which would have a dozen fields, to increase traffic for the local hospitality industry. The goal is to draw more youth and amateur softball and baseball teams and their families here for tournaments and bring more revenue to outlying hotels, restaurants and shops in the county and to the county’s lodging-excise tax.

CVB President Doug Small said last week hotel occupancy in April in the county was only 47.6 percent, down by nearly 5 percent from April of last year.  County Fiscal Services Director Robert White said May receipts to the tax fund were down by 26.6 percent from the previous May.

“This was doing well up to this month,” said White.

The sports commission estimated the baseball complex would bring $49 million in revenue to the hotels and $2.4 to the lodging-excise tax fund over its first 10 years of operations. WMSC has estimated the cost of building the complex at $5.6 million and county dollars aren’t being counted on for construction.

Tanis said the new subcommittee plans to meet after every Finance Committee meeting, which means they could get together twice a month.

“It’s just figuring out the appropriate level of compensation,” said Howell of a potential agreement with WMSC, “and that all depends on what the project ends up looking like.”

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