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BWA Stadium Finance Team
- BWRA-Structuring Agent and Transaction Advisor/Coordinator
- Rubin, Winston, Diercks, Harris & Cook - Transaction Counsel
- LCOR - Stadium Developer
- Lehman Brothers - Debt Placement Agent
- Capstar Partners - Equity Placement Agent
- Marshall & Stevens - Project Appraiser
- Shaw Pittman LLP - Tax Counsel
- PricewaterhouseCoopers - Accountants
BWRA Financing Model
Unique leveraged lease structure that:
- Joins public entities with private capital markets to enhance
benefits for both
- Produces low-cost, fixed-rate, long-term financings for sports
franchises
- Substantially reduces level of public financing required
Issues Facing Municipalities
- Limited capital budgets for 100% financing
- Uncertain political support for public financing
- Need to capture benefit in exchange for expediture of public money
- Uncertainty of revenue streams generated by new facilities
BWRA’s Benefits for the District of Columbia
- City's contribution limited to $125MM for land, environmental
cleanup and RFK improvements
- Ultimate ownership of Stadium by The District
- Financial burden/risk shared with private owners
- Minimzed the amount required from gross receipts taxes
BWRA’s Benefits to Team
- More up-front cash than provided by traditional debt financing
- Construction of Stadium without encumbering Team's other assets or
requiring Team's capital infusion
- Operating leaseback providing attractive, long-term, fixed-rate rent
with renewal options
- Full control of Stadium during the lease term
Transaction Structure: Construction of a New Baseball Stadium in The
District of Columbia
- D.C. Government entity leases ground to Private Stadium Owner for 65
years
- Rent accrues for first 25 years
- Primate Stadium Owner raises debt and equity on credit of
Stadium-generated taxes and other credit support
- LCOR constructs new Stadium to team specifications
- Insured construction contract with on time/on price delivery
- Stadium leased to Team at attractive fixed-rate rent with operating
lease treatment for Stadium Lease
What Happens When the Accrued Ground Rent Must Be Paid After 25 Years?
- Ground Lease ends at 25, 50 or 65 years or whenever Private Stadium
Owner fails to pay ground rent
- Ground and Stadium then belong to D.C. Government
Strategy A: Private Stadium Owner Surrenders Stadium
- Private Stadium Owner forfeits remaining term of Ground Lease and
Stadium to D.C. Government
- D.C. Government may lease Stadium to Team for an additional term(s)
- D.C. Government owns Stadium free and clear of other interests and
can realize future appreciation
Strategy B: Ground Rent Accrual Payoff
- Private Stadium owner pays D.C. Government the accrued ground rent
and interest in cash
- Private Stadium Owner pays new FMV ground rent currently to D.C.
Government
- Private Stadium owner will offer to re-lease Stadium at FMV to Team
- D.C. Government receives Stadium at end of Ground Lease (50-65
years)
Team Options on 25th Year
- Team extends Stadium Lease with Private Stadium Owner or D.C.
Government
- At D.C. Governement's option, Team may share in future appreciation
(under Strategy A) or FMV ground rent payment (under
Strategy B)
BWRA’s Role as Transaction Advisor
- Structure Transaction to maximize results for all parties (D.C.
Government, Team)
- Coordinate with Major League Baseball
- Coordinate transaction financing by working with D.C. Government and
all Finance Team members
- Oversee legal and documentation process
- Manage transaction closing
BW Realty Advisors LLC
Richard A. Gross, Manager, rgross@bwra.com
Sandra Spalletta, General Counsel, sspalletta@bwra.com
Ross A. Pascal, Capital Markets, rpascal@bwra.com
D.R. Dugan, Finance, ddugan@bwra.com
915 15th Street, NW
Washington, DC 20005
(202) 347-4900
Michael Sununu, Manager, mcs@jhsassociates.com
24 Samoset Drive
Salem, NH 03079
(603) 890-1630
Back to top of page
An Innovative Approach to Financing Sports Facilitites
Financing Details
Project Costs and Sources of Funds
Ballpark Hard Cost |
244,100,000 |
Hard Cost Contingency |
19,500,000 |
Total Hard Costs |
263,600,000 |
|
|
Ballpark Soft Costs |
35,300,000 |
Soft Cost Contingency |
1,800,000 |
Total Soft Costs |
37,100,000 |
|
|
Land Purchase |
65,000,000 |
Land Remediation |
35,000,000 |
Total Land |
100,000,000 |
|
|
On-site Parking |
45,000,000 |
Capitalized Interest |
35,000,000 |
|
|
PROJECT |
480,700,000 |
Project Fees |
24,035,000 |
TOTAL PROJECT |
504,735,000 |
|
|
Private Financing |
404,735,000 |
|
|
Private Bonds |
330,000,000 |
Equity |
74,735,000 |
Private Funds |
404,735,000 |
|
|
City (Land) |
100,000,000 |
|
|
Total Funds |
504,735,000 |
Revenue Assumptions
Ticket Tax |
4,384,000 |
Player Payroll Tax |
4,950,000 |
Parking Tax |
1,446,000 |
Concession Tax |
3,411,000 |
|
|
Game Day Parking |
6,318,000 |
Non-Game Parking |
3,949,000 |
Primary Revenue |
24,458,000 |
|
|
Team Rent |
5,500,000 |
Total Revenue |
29,958,000 |
|
|
Finance Lease Payment |
29,916,000 |
Surplus/(Deficit) |
42,000 |
Revenue Assumption Notes
- Ticket Tax - Assumption based on 41,000 seat stadium, 66% capacity,
league average ticket price of $19,82 and 10% DC ticket tax. (Source:
2004 Fan Cost Index)
- Player Payroll Tax - Assumption based on $55 million player payroll
(on par with Minnesota Twins and Oakland Athletics 2004 player salary
- ranks 19 out of 30 teams) and 9% DC payroll tax. (Source: MLB)
- Parking Revenue/Tax - Based on 5000 pace parking facility, $20 per
game parking, 100% capacity for games. Game day parking revenue
assumes first 1,100 spaces of parking goes to team as per current
"Baseball Stadium Agreement". Non-game parking assumes 30%
capacity for 270 days/year and $9.75 per day. Tax assumes 12% DC
parking tax.
- Concession Tax - Assumes $15.57 of concessions per person per game
and 10% DC concession tax. (Source: 2004 Fan Cost Index)
- Rent - Assumes fixed rent payment with no escalation over the life
of the lease.
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