(April 24, 2015) Site plans, cost arrangements, feasibility studies and, not to be overlooked, a location are still all questions without answers concerning a proposed sports complex in Worcester County.
Hat Trick Consultants, the Texas-based firm that approached the county last year with the idea, appeared before the Worcester County Commissioners this week with few new details in the venture.
The first magic number is $15,000, which is the county’s share to fund the phase I study. The total cost of the study is close to $75,000 — a little higher than average since the county is contemplating installing outdoor athletic fields to accompany the project.
The Maryland Department of Business and Economic Development is contributing $25,000, Hat Trick is putting up $5,000 and the Maryland Stadium Authority is contributing about $30,000.
The second magic number is 130. That’s how many events the venue would need annually to remain financially viable, according to Michael Barack, president of Hat Trick. The AA-league hockey team Hat Trick proposed to house at the arena would be good for about 34 of those dates, he said.
“Without at least 50 dates, you’re starting behind the eight ball,” Barack said.
Another professional sports team, apart from the proposed “Warblers” team, be it arena football, basketball or lacrosse as examples, would need to be lined up to carry the arena during the hockey off-season, Barack said. He continued by saying his organization would be willing to provide that team before or after the contracts are signed.
“That would be before,” County Attorney J. Sonny Bloxom interjected.
Barack said the calendars generally fill up fast, with events double or even triple-booked from nearby venues such as the Wicomico Youth and Civic Center and Ocean City’s new Performing Arts Center. Both of these venues are generally considered to be competing with the new arena, as the Maryland Stadium Authority, which has a financial interest in both existing facilities and is expected to fund a portion of the new complex, will study the issue as phase II of their review.
Barack told the commissioners of a similar arena in Texas that he said receives $80,000 per week in rent from a church to use its facilities. Concerts, youth leagues or business conventions could all make use of the stadium, Barack said.
The arena could also be a hub for development, Barack said, supporting hotel or retail businesses.
Commissioner A. Chip Bertino asked about the structure and what role Hat Trick plays in the operation of the arena, since the county has said it isn’t “going into the stadium business.”
“We’d be the conduit for the county. We’d be the operator on the county’s behalf, and bring in the sports franchises and events,” Barack said.
No site has been identified for the placement of the arena, but Economic Development Director Bill Badger said the West Ocean City area was a strong contender. Commissioner Merrill Lockfaw requested, because of the available infrastructure and inexpensive land prices, that the Southern end of the county gets serious consideration. Badger said he would be glad to show the consultants around that part of the county.
Overall cost estimates from the consultants are based on a $40 million price tag, but Badger previously increased the estimates to between $40-$50 million, emphasizing that Worcester County would not provide that amount towards the arena. Badger said there are a number of funding opportunities available, such as a public/private partnership.
Projecting revenue and expenses based on $40 million at 3.5 percent interest amortized over 20 years, Hat Trick forecasts about $312,000 in net revenue annually.
Using revenue sources such as merchandizing, club seats and suites, naming rights and rent, Hat Trick projects $7.5 million in gross revenue offset by $3 million in operating expenses and $1.3 million in staff. Debt service is estimated at $2.8 million, leaving about $300,000 left over.
These numbers will be verified by the MSA study.