| Discussion of Financial
Condition of the Boulder’s Stadium Needs Real Numbers July 28, 2011 An article in today’s Journal News attempts to present a balanced analysis of the financial state of the Boulder’s and the baseball stadium. (See Rockland Boulders So Far: Rock-solid or a millstone?) A fatal flaw at the center of the discussion is that many of the numbers could not be vetted by the reporter because these key figures have not been made public. In fact, some of them have been kept from the public. When St. Lawrence offered numbers about how much money the team is going to make this year he offered specific projections. Preserve Ramapo submitted a Freedom of Information Act request for "copies of all records, accountings, notes, and emails relating to ticket sales and parking revenues at the Provident Baseball Park since the commencement of the 2011 baseball season on May 26, 2011" earlier this month, and there was no reply. The records are public records and St. Lawrence’s Ramapo Local Development Corp. is required by law to answer these requests within five days or provide in writing the legal reasons for denying the request. We received no response, and have taken the second step of filing an appeal that goes to NYS Committee on Open Government. If the ticket sale and parking revenue records are not provided, there’s the final option of suing the RLDC to get these records. This was not the first attempt to get the financial records of the ballpark. There is a section of the contract between St. Lawrence’s RLDC and Bottom 9 Baseball that requires both sides to keep a set of financial records. It reads: "6.4 Audit. B9B shall maintain books and records with respect to all receipts and expenditures relating to the sale of tickets, food and beverage, parking revenues, merchandise sales, broadcast rights, naming rights revenue and licensing of suites at the Ballpark as provided in this Agreement, consistent with generally accepted accounting principles. RLDC shall maintain books and records with respect to all receipts and expenditures relating to its rights and responsibilities hereunder. The parties agree that their respective books and records shall be open for inspection by the other party at any mutually agreed time." The public does not have the right to FOIL Bottom 9 Baseball, but it has an absolute right to the RLDC records. That’s written into the law that charters Local Development Corps in New York State. Consequently, on June 28, Preserve Ramapo FOILed a copy of those books and records. On Friday, July 8, we were sent this email: "In response to your request for "books and records with respect to all receipts and expenditures relating to its rights and responsibilities" pursuant to Article 6.4 of the lease agreement between the Ramapo Local Development Corporation and Bottom 9 Baseball, LLC, please be advised that no such record exists at this time." We have since sent a request for a formalized certification of the claim that these records do not, in fact, exist anywhere within the Ramapo Local Development Corporation’s records. We are waiting for a response to that request. If St. Lawrence and the Ramapo Local Development Corp have entered stonewall mode concerning specific financial data on the operations of the team and the ballpark, then the next obvious question is Why? Until the RLDC becomes more forthcoming, or this matter gets settled before a court, the numbers floated by the Supervisor whenever he discusses the financial stability of his enterprise at Fireman’s Memorial Drive should be met with the question: Will you make those numbers, all of them, available to the press and public? And we expect the local radio station to ask this question since they afford the Supervisor a platform every week to propagandize his effort. And as this dialogue over the airwaves enters into the political season of the fall Supervisor’s Election, this obligation on the part of the radio station becomes a legal requirement defined by their current licensing. What follows is an updated version of Bob Rhodes’ analysis of the long-term taxpayer liabilities related to the Stadium.
A Second Financial Analysis of St. Lawrence’s Stadium Boondoggle
Robert I. Rhodes, Chairman, Preserve Ramapo June 22, 2011 On March 28th I published a financial analysis of St. Lawrence’s stadium boondoggle in this forum. At that time I analyzed both the business plan submitted to justify the stadium, the "Fishkind plan", and the twenty year lease Ramapo signed with Bottom 9 Ball. In my attempt to be fair I accepted many of the estimates used in that business plan. This analysis will continue to use some of these overly generous estimates. But now that we have had quite a few games I can use more realistic attendance figures and provide a more accurate look at the stadium’s financial outlook. I expect that the stadium will lose almost $4 million a year! Readers will recall that the Fishkind business plan for St. Lawrence’s stadium was based on a construction cost of only $20 million, not the $70 million we are predicting. It also assumed attendance the first year would be over 166,000. Attendance at games is slowly sinking as the weeks go by. I think we can assume that attendance of perhaps 75,000 will be a more realistic figure. We know that free tickets are now being distributed like Halloween candy, but we do not know the exact number because the Ramapo Local Development Corporation has illegally refused to open its books for our inspection. Recently supervisor St. Lawrence stated that the total cost of the stadium was $38 million. That is a lot more than the $20 million predicted in the Fishkind report, but it still looks much too low. Recall that in my analysis I suggested that the total cost of the stadium would be about $60 million. I also suggested that because St. Lawrence is his own Director of Finance and seems to have taken funds from every bond issue and tax anticipation note containing the words maintenance, park, or road it will be impossible to arrive at a truly accurate accounting without having access to all of the town’s financial records. A that time I did not know, for example, that in February there was a secret and illegal board meeting at which a $25 million dollar bond resolution was passed. It was illegal because we were entitled to at least one week’s notice and the only public announcement was a fax sent out to the media only 52 minutes before the meeting. Moreover, despite the fact that two different members of our organization had asked for all resolutions of the town board, the resolutions of these meetings were kept from us. We finally learned about them after a legal notice was published that said the 30 days for a petition to challenge a bond resolution had passed. This outrage illustrates both the arrogance and dishonesty of the current administration and the difficulties we have faced in our efforts to follow these events. Based on what we have been able to discover I am raising my estimate of total stadium costs to $70 million. Now let’s take a look at the costs and revenues from stadium activities using both St. Lawrence’s $38 million figure and my $70 million figure.
Optimistic Revenue Model Base Rent $175,000 Attendance Revenue for first 75,000 $75,000 Attendance revenue for number in Excess of 150,000 0 Cars Parked/game 1500/3 x 2 x 50 $50,000 Commission on 10% of Concession .1 X $10 x 1500 x 50 $75,000 Commission of 20% of merchandise .2 X $6 x 1500 x 50 $90,000 Suite Sales Revenue $250,000 (?) Naming Rights $125,000 Nontraditional Revenue $200,000 __________ Total $1,040,000 Note: We are still assuming, as in our earlier analysis that, following St. Lawrence’s own analyst, that the average patron will spend $10 on food and drink and $6 on souvenirs. We are also assuming 50 games at home as before. Since suite sales revenue has not been announced I am taking half of the St. Lawrence estimate which is consistent with attendance of only half of what his analyst projected.
Capital Cost $1,814,000 Variable Cost 525,000 _________ Total Yearly Cost $2,339,000 Note: My figures are based primarily on St. Lawrence’s own analyst’s costs including a 4% interest rate. See my earlier review for further discussion.
Yearly Loss Cost $2,339,000 Revenue $1,040,000 __________ $1,299,000
We can see that if we accept St. Lawrence low ball estimate for his total construction costs we will lose "only" an estimated $1,299,000 a year. But what do the numbers look like if we go with my estimate of total construction costs of $70 million. Here, quite properly, I am including the cost of road construction, traffic lights, and improvements to the "park" and all of the other costs that St. Lawrence ignored or stripped out of his estimate. Capital Cost $4,309,000 Variable Cost $525,000 _________ Yearly Cost $4,834,000
Yearly Loss Yearly Cost $4,834,000 Yearly Revenue $1,040,000 ______________________________________ Total Yearly Loss $3,794,000 So now we see a yearly loss of almost $4 million. And this is probably low because we have accepted his analyst’s undocumented assertion that non police costs will only be $400,000. This low ball figure apparently includes all maintenance (including upkeep on the huge stadium grounds) and utilities! Recall that St. Lawrence first assured us that his stadium would be paid off in ten years while later, under heavy criticism, he assured us that it would be paid off in five years! To pay off the capital costs alone in five years would require revenue of about $8 million a year even using his own "modest" estimate that the total construction cost would be only $38 million. But, as we see, his revenue is only about one-eighth of the revenue required. Now we have to ask a most important question: Who will make money? Under the outrageous lease that St. Lawrence signed it looks like ALL revenue from catering 12 months a year may well be retained by B9B or its designated caterer.(1) We now have a designated caterer, Ovation Food Services. The catering should be highly profitable because as far as we can tell from the strange lease it will be operating without having to pay any rent, percentage of gross revenues or utilities! Will Ramapo choose to operate the stadium at a huge loss each year? Alternatively, will it decide to break the lease at a cost of about $1.5 million, turn the stadium into a ball field for local residents and run its own catering operation? In either case Ramapo will continue to lose millions of dollars a year. We could be using the money invested in this stadium to fix our sewer systems and prevent flooding in Ramapo, We could be using this money to fix the terrible traffic congestion in Monsey, or we could be using this money to provide 3,000 poor kids with a wonderful day camp experience every summer. Instead we will be pissing it away to feed St. Lawrence’s massive ego and to enrich the caterer who may be getting the use of this huge facility for nothing. What a scandal and what a shame. We should also note that this stadium is a terrible burden that must be tolerated by its residential neighbors. Moreover, when they go to sell their houses they will find that St. Lawrence and his rubber stamp board have destroyed a major part of their life savings. (1) 5.4.2 (page 12 of lease) "RLDC may be required [emphasis added] to make payments arising from use of the Ballpark’s exclusive [emphasis added] food and beverage concessions or ticketing operations during RLDC events." Why this extraordinary vague language is inserted in the middle of lease that otherwise spells out the obligations of the RLDC in great detail? I believe that it will be interpreted by our very generous supervisor as a giveaway to B9B.
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