SkyscraperPage Forum - Spurs Consider Managing Alamo Stadium

First, you guys all need to subscribe to Plaza De Armas. Awesome, in depth journalism on issues we care about (such as the Friedrich/SAISD deal today).

Here is their piece on Hartman/Soccer. It is lengthy but worth the time to understand why the city/county is trending towards SS&E:

http://plazadearmastx.com/index.php/...mue-diligience

Quote:

Due diligence, schmue diligence

Gordon Hartman’s minor-league soccer plan, the aim of which is to financially safeguard Morgan’s Wonderland, is looking dodgy. Considering the losses already piling up at the Northeast Side park for special-needs kids, it’s fair to say the developer and philanthropist needed a sturdier financial framework way before now – like maybe closer to 2006, when he dreamed up the destination.

And considering the City’s major stake in the project, it’s also fair to say the City flubbed it by failing to notice such a plan was MIA. It looks like a public-private partnership in which the public deferred too much to the private.

The City has already poured $7.25 million into the development of Morgan’s Wonderland and the adjacent STAR Soccer Complex, with most of the money coming from bond sales that voters OK’d in 2007. And the City will take ownership of the property no later than July 2012 under an agreement with the Hartman-backed nonprofit SOAR (Sports Outdoor and Recreation, which stretched just to get that acronym).

SOAR operates and manages the 25-acre park and 13 fields, and would continue to do so under a long-term lease with the City. But if the losses became too much for the nonprofit, the City could find itself in the position of having to run the facility, find a third party to do it, or sell the property. Yet with Morgan’s Wonderland catering to a sympathetic and under-served population, the last option looks downright draconian, while the other two would be merely difficult.

In a much more likely scenario, the City Council would agree to cut annual checks to the nonprofit to keep the doors open.

The park doesn’t charge admission for special-needs kids; those accompanying them pay $10. General admission is $15. The facility opened in April 2010 and seems to have fallen into the red almost immediately. Hartman says the park lost $750,000 last year, or about $850,000 if you include one-time start-up expenses.

“The only way a Morgan’s Wonderland makes sense is if there’s an external funding source,” says County Commissioner Kevin Wolff, whose precinct includes the Longhorn Quarry, home to the park and the STAR soccer fields. “It wasn’t looked at, from the City’s standpoint, as closely as it shoulda, coulda been. Unless they said at some point this will be a city park.”

But Deputy City Manager Pat DiGiovanni says Hartman insisted that the park should be run by the nonprofit in order to avoid the ups and downs of municipal funding.

A little more than four years ago, San Antonio voters gave their blessing to the biggest bond package in the City’s history. Totaling $550 million, it set aside nearly $80 million for 69 parks, open space, and athletics-related projects. The second biggest on the list, at $6.2 million, was the STAR complex and Morgan’s Wonderland.

In 2009, the City Council chipped in another $1 million at the urging of Councilman John Clamp, whose district includes the Longhorn Quarry. The money came from a pot of about $30 million in bond savings.

Meanwhile, the County kicked in $5 million in venue-tax proceeds for development of the soccer fields — not Morgan's Wonderland — and the state contributed another $5 million.

Going with DiGiovanni’s figures, public dollars covered nearly 51 percent of the project’s $34-million cost, leaving $16.75 million to be covered by fundraising in the private sector. Hartman said he contributed as much as $2 million of his own money to the effort.

SOAR originally was supposed to hand over the title in July 2010, but Hartman asked for and received a two-year extension, according to DiGiovanni. Hartman set up a line of credit to build the park and soccer fields, but the fundraising effort had sputtered, coming up $6.5 million short. Hartman worried that City ownership would stymie his efforts to entice donors — and apparently also worried about being on the hook for that much money — so he asked for the extension.

Hartman says he's still got roughly $4.5 million to go. Would he seek another extension? "I don't know," he says. "I hope not."

City Manager Sheryl Sculley has assigned DiGiovanni to vet Hartman’s pro-soccer plan. Last week, DiGiovanni also asked Hartman for information on Morgan Wonderland’s financial condition.

DiGiovanni said the burden of developing a sustainability plan for Morgan’s Wonderland fell on Hartman, and he referenced a letter the developer sent to the City in 2008 saying that revenue from STAR naming rights, concessions, and admission could pay for maintenance and operations of the park and soccer fields. That, of course, would have been the year after the bond election.

“That was Gordon’s charge — to come up with a viable plan to operate the park,” DiGiovanni says.

Maybe it didn’t work out as originally planned because the park’s amenities grew grander and costlier as the development progressed. Its financial problems started with a post-2007 explosion in the park's scope, when its construction budget shot from $14 million to $34 million.

“Morgan's Wonderland became much bigger than it was [in the early stages] — and I'm glad about that. It's a great, awarding-winning park now,” Hartman says. "It was going to be a much more simplistic park." The plan's major overhaul, he adds, occurred after the City's 2007 bond election.

That begs a couple of questions. If the project was so unsettled, how did it make it through bond-committee vetting and onto the final list? And did the City really have no say over the matter after voters had their say?

Hartman's pro-soccer scheme to close the funding hole continues to run into obstacles. In addition to the question of whether Hartman could turn a profit as quickly as he projects (within two years), the Express-News reported last week that the business plan he turned over to the City and County calls for building the stadium atop two of the 13 fields paid for with taxpayer dollars. That is, a for-profit professional franchise would take away fields paid for with City bond proceeds and County venue-tax revenue for youth and amateur soccer — which seems likely to violate bond covenants and voters’ understanding of what their money would be spent on.

And Hartman’s asking the City and County for $8 million to build that stadium. Hmm.

The E-N also reported this creepy detail: The County has a non-compete pact with SSE that bars it from helping finance stadiums for pro-sports franchises that would compete with the Spurs owner. In an interview with Plaza de Armas, Hartman said, probably reasonably: “I think the Spurs are trying to control every aspect of professional sports in this city.”

Hartman obviously is not in this predicament now because he’s grubbing for a buck for himself. He’s desperate for public funding for a soccer stadium so he can field his team, the San Antonio Scorpions, next year and eventually start channeling its net income to Morgan’s Wonderland — inspired by his daughter Morgan, who’s autistic — to keep it going.

“I don’t think Gordon wanted to do this as his personal project,” DiGiovanni says. “He’s trying to do this as a community project.”

Indeed, Morgan’s Wonderland seems worthy of some kind of public support. San Antonio voters just should’ve had a much better idea of what that might mean before casting their ballots for the 2007 bond.