Tuesday, October 24, 2017

Cost of Sports Complex--$5 million?, $20 million? Or what?

The City is requesting our feedback on the  Germantown Preliminary Master Park Plan

Your comments are to be made hereThe City, in its non-transparent, hurried way, wants us to comment on the Master Parks Plan, and only gives us until Friday to do it. The problem is that we are lacking complete financial projections and also lacking basic data on the need for sports fields in the city.  

We don’t know the projected cost of any of the elements of the Draft Recommendations of our Comprehensive Parks Master Plan. I am not sure how the public is expected to be able to give commentary without any idea how much each improvement will cost. Although the entire plan and its component parts should at least give us ballpark cost estimates for each part of the master plan, I am concentrating in this post on the proposed sports complex, because the PowerPoint emphasized its economic impact. As you will later see, the case for the economic impact is weak, at best. Since the City's presentation did not include an estimated cost of the facility, I put pencil and paper to it and came up with a ballpark figure of about $15 milion. I will explain how I came up with that figure later. 

I am a huge supporter of public parks, and I do not mind paying higher taxes for amenities. I also love kids' sports. What I do mind is paying for a costly tournament level sports complex in the southestern part of the city which has no impact on the vast majority of Germantown residents, and may become a financial burden to the City in the future. While there very well may be a need for more sports fields to serve the youth in Germantown, there does not seem to be any statistical analysis of how many fields are needed and for what sports. No discussion is given to whether or not land needs to be acquired to support the current and future expected level of sports participation. Instead there is emphasis on the supposed economic benefit of tournaments that are hosted. If there is an economic benefit, a formal cost/benefit analysis should have been done. If the proposed sports fields are really for the participants and youth in Germantown, the case should have been made for that.

The “economic impact” we are given has some problems--it is not translated into City revenue projections, and it does not seem to take into account the fact that the location of this proposed sportsplex is in the far southeastern portion of the city, and the economic impact is likely to be spread among Shelby County, Collierville, Memphis and Germantown.   

The plan details some possible economic benefits due to the number of participants in various sports within a region. It shows the Mike Rose complex in Shelby County as a competitor of our complex. At another point, they point to a little synergy, because 3 of 17 regional events held at Mike Rose have to rely on other sports fields. Just as any fields we build would have an economic effect on surrounding areas, the Mike Rose fields already have an economic impact on Germantown, due to their location. If our Sports complex means fewer tournaments at that sports complex, there would be little net economic benefit for Germantown. 

How much in fees will this sports complex generate? How much incremental tax revenue will this sports complex bring Germantown? The amount of spending per person attending tournaments is estimated for the six or seven tournaments we expect to host per year, but we were not even told how this affects our tax revenues. I did some preliminary calculations and if the expectations are met in terms of tournaments, and if all the revenue from people attending the tournaments is spent in Germantown (unlikely), the tax benefit in total for five years for the City is around $700,000. Yes, there can be a multiplier effect for total revenues, but the two to three million dollars that people would spend per year here while attending these tournaments does not justify the high cost of the fields. We need a complete cost/benefit analysis, and a needs assessment for the youth and other sports participants in Germantown before we can consider such a complex. 

My main question is, do we need new fields for the players we have living in Germantown? A good argument may be able to be made for that, although it was not made in the presentation.  Do we need land acquisition to accommodate those needs? I don't know. The emphasis on building fields capable of tournament hosting drives our costs up, and puts the needs of youth and other sports participants on the back burner. The economic impact of tournament hosting is too slight to justify the costs. The City could likely have given us a good argument to build more sports fields for our youth--that our current fields are insufficient in number. Instead it decided to make the specious argument that six to seven regional sports tournaments a year in the southeastern part of the city would be a driver of economic growth. And if we want the project to be economically viable, will we charge high prices for access to the fields, which could eliminate a lot of recreational teams, in favor of the competitive teams?

Does our administration badly want this part of town developed? Yes it does. Two projects for the area just came before the BMA this past Monday (that is another story). And who can forget the way the administration tried to railroad the Crestwyn/Winchester site for the new school? Even after that site was ultimately rejected by the site selection committee, they persisted in trying to shove it down our throats. That effort failed, although the location eventually selected is in the the same general area on Forest Hill-Irene. 

As you can see, I have serious doubts about the economic case for building the sportsplex. Will it mean more tax breaks such as PILOTs or even TIF given to new hotels in the area, based on “pie in the sky” type economic projections?  I cannot definitively answer that question, I can simply pose it.  

Contrast Germantown’s preliminary Master Plan to that of New Braunfels, TX, a fast growing city of 70,000, just north of my hometown of San Antonio. 

New Braunfels Preliminary Master Plan for Sports Fields

I note the following things different between the New Braunfels study and that of Germantown: 

1. The New Braunfels plan only concentrated on athletic fields, and there were 65 pages of specific information on that alone. I feel that a separate athletic fields survey would have been appropriate for Germantown.  On our survey, there was very little about the needs for individual sports. We really have no idea from the information collected how many new sports facilities are needed for each sport.

2. A recreational trend analysis was given for each sport in the New Braunfels report. Do we even know how many kids in Germantown play various sports?  If we do it wasn’t included in the information the public was given. No national trends in sports was noted in the Germantown plan, as was done in the New Braunfels plan.

3. There is much greater detail given in the New Braunfels plan on the deficits in the current fields, including giving various grades for different aspects of each current field.   

4. In New Braunfels, in a referendum, voters agreed to purchase property for a new sportsplex.  Germantown does not seem to want that level of community input. No referendum is planned. 

I could go on, but I don’t really have time for that. This has to be published before the comment period ends on Friday. I therefore turn to the New Braunfels cost projections for a proposed complex, as a guideline to what the Sports complex could cost Germantown. Keep in mind that I would not have to use New Braunfels projections for Germantown fields if our draft recommendations had included them.   
The bottom line is that $25 million is the estimate for the development of a 100 acre sportsplex in New Braunfels, with various types of athletic fields. The emphasis for New Braunfels seems to be for local use rather than sponsoring tournaments, so their cost  per acre may be lower than ours would be.The $25 million does not include land acquisition.  

The conceptual plan for Germantown shows a 45 acre site. If our costs are in line with those of New Braunfels, we are talking about $11,250,000 in development costs. We spent upwards of $3 million for a school site in the same area, and the acreage was about 20% less than our proposed sportsplex.  My estimate therefore is that more than $15 million dollars will be required to acquire land and complete our sportsplex. We are not talking about the entire plan for all the parks-- this is for the sportsplex alone.

How is this to be funded?   

Do the residents of this City want and need this? Here are the priority rankings that were given in the by the 700 people (out of 39,000 residents) in Germantown that answered the survey: 

Development of tournament level athletic facilities and parkland acquisition are both in the bottom half of the priority rankings.  I remember being a bit frustrated filling out this survey. I want to support kids' sports, and I want them to have the appropriate facilities. How could I respond positively to that without the "tournament level" attached to the idea? I don't believe that was possible. The survey was flawed in the way it was constructed. The plan does not make the case for athletic fields either due to the community needs, nor is a solid case made for the economic benefit to the City. I am frustrated by both the survey and the recommendations.