By Stephen Young
By Stephen Young
By Stephen Young
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
Lease negotiations continued through January, and the Round Rock City Council is scheduled to vote on the 20-year agreement this week. The lease requires the team to contribute $6 million toward a $15 million stadium that the city will own outright. The city's part is to issue $9 million in bonds that are to be paid back over time through the 7 percent hotel-motel tax and the rent the team will pay the city.
The team incurs all expenses related to the maintenance and operations of the stadium, including utilities and security. But it also gets to pocket the millions of dollars in profits related to concessions and parking--even for non-baseball events such as concerts that might take place there.
In effect, the city will make no money off the stadium. But it shouldn't lose any either. The team is paying the city $1.725 million in rent over 20 years, with all but $225,000 of it being paid in the first five years. (Rent for each of the last 15 years is a mere $15,000.) The city, however, must use the rent money to help pay off bondholders instead of spending it on city services. As city officials see it, the fact that only the team benefits if the stadium makes money is outweighed by the city being protected if the stadium loses money. And they love the intangible economic benefits of the stadium, which should be a magnet for new commercial development and the tax revenue that comes with it.
The Ryans love the stadium's magnetic appeal too, since they stand to benefit tangibly from it. After the election, the Ryans announced they were purchasing from the city a 48-acre tract adjacent to where the new stadium is being built. City officials had said the tract would be used to expand a city park, but now say their previous pronouncement was in error. Nothing more than a cornfield today, the land almost undoubtedly will escalate in value over the years for the Ryans as the stadium becomes surrounded by suburbanesque strip malls.
The city is responsible for paying for future stadium upgrades, such as a new scoreboard, but city officials think corporate sponsors could help defray those kinds of costs. Overall, city officials are pleased with the lease and point to an independent study by consultant KPMG Peat Marwick, which said the Ryan group's investment in the stadium exceeds what other AA baseball team owners pour into similar projects. Reid Ryan, of course, agrees with those assessments. But as he roosts inside the offices of the team he hatched, he becomes defensive as he contemplates a question about whether the deal also is very good for the Ryans.
"Are we going to have a chance to make money off this project? Yes, we are, if we run our business right," he says. "But we're also having to put in several millions of dollars that we are giving to the city of Round Rock to build a facility that they are going to own."
Then, Reid Ryan compares the deal to a tenant helping a landlord pay for building an apartment that the tenant has to pay rent on for 20 years. He sounds like a sports team owner with experience far beyond his years.
The election now over, Nolan Ryan has withdrawn behind the scenes, letting his son call the shots, although the two chat at least every other day. The younger Ryan has surrounded himself with an experienced team, including Jay Miller, who left his job as general manager of the Astros' Triple-A affiliate in New Orleans to assume the same post with the Express. The architect for the new stadium is the same firm that designed the majestic Ballpark in Arlington. The publicity campaign for season tickets has not even begun, and the team already has sold about 1,200 full-season and 500 half-season packages.
At long last, Reid Ryan is playing in the big leagues. And winning.
"This really is my deal to run," he says, as if he's been trying to convince people of something similar his entire life.