Deal to buy baseball team is dead

The current deal for the Richmond Baseball Club to buy the Connecticut Defenders is going to expire, the investor’s spokesman told the Norwich newspaper The Day:

Peter Boisseau, spokesman for Richmond Baseball Club LC, which had a deal to purchase the Defenders for $15.4 million and move the team to Richmond, said this morning there is no way that deal could be saved by the Sunday deadline for closing the sale.

“That deal is going to expire,” Boisseau said. “The deal could not be consummated.”

Boisseau said financing and the current slow economy “played a role” in the business group’s inability to complete the deal.

The sons of Nolan Ryan are scouting Richmond today as the company co-founded by the pitching legend considering a stake in the team, but Boisseau told the paper even if they jump on board it is too late to get the financing together in time to meet the deadline.

According to a previous report from The Day, current team owner Lou DiBella said the Richmond investor group will lose a substantial deposit if a deal isn’t reached in time.

From the article:

DiBella said he has not heard from Bostic’s group in two weeks, and added that the prospective buyers would lose a substantial deposit come Monday if the deal is not concluded.

”Clearly these guys don’t have the means to close on their own and are looking for a partner,” DiBella said.

Ryan-Sanders Baseball owns and operates two minor league teams in Texas, and has made no commitment as of yet to assist with the Defenders deal.

Local media has reported the investor group led by businessman Bryan Bostic is short of the estimated $15 million needed to buy the team. News broke this week that Ryan’s company, co-founded with former Houston Astros owner Don Sanders, is considering potential ownership of the franchise and possibly investing in the ballpark planned for Shockoe Center.

Eastern League president Joe McEacharn is also in town visiting the Diamond and Shockoe Center site with the Ryans. McEacharn has previously said he is committed to bringing a team to Richmond to play next season, whether it is the Defenders or another team.

Richmond Fed on southeast stadium growth

The Richmond Federal Reserve’s quarterly magazine about the Fifth District economy, Region Focus, came out this week with an article about the surge of baseball stadiums being built or proposed in the region.

The article, “Ballpark Boom,” mentions the Highwoods Properties proposal to build a stadium in Shockoe Bottom. It also brings up points on both sides at to whether stadium complexes are good economic generators.

From the article:

Winston-Salem and Richmond are following a path Cleveland State University urban affairs professor and sports economist Mark Rosentraub advocates. “In more cases, these mixed-use developments have produced success,” he says.

“A sports facility is a very large capital asset,” Rosentraub says. “No one would buy or place a large capital asset in a specific location without a strategy.”

And on the other hand:

There are other ways to develop downtown areas than by stadiums, says Dennis Coates, an economics professor at the University of Maryland, Baltimore County.

There are numerous examples where promises about stadium-related development weren’t met, Coates says. … Typically, stadium advocates approach debates about subsidies by saying the venue will generate tax revenues and create new jobs, Coates says. There’s no evidence any of that happens, but that doesn’t mean the ideal stadium subsidy is necessarily zero.

The article also highlights the impact of recently built stadiums in the southeast, which Richmond decision makers should note as they consider the Shockoe proposal.

For example, the Class A Greensboro Grasshoppers have set attendance records in the last three years that they’ve played in their new stadium. While the stadium has been a success for the team, it hasn’t sparked development. The article states the stadium has several vacant properties nearby, including an empty Chevrolet dealership. A more-than-$60 million project proposed next to the stadium fell apart in 2006.

Fluor Field in Greenville, S.C., opened in 2006 and has attracted condos and restaurants around the ballpark. The Class A Drive have also set attendance records at the new stadium.

The PDF version of the article by David Van Den Berg is available here.

The Fed magazine also has a  article about corporate bankruptcies and whether the current system is the most efficient way to determine the viability of a distressed company. You can read that one here.

Braves’ new turf under scrutiny

The Gwinnett Braves, formerly known as the Richmond Braves, have played their first game at their new digs in the suburbs of Georgia.

While the team may be happy with their new home, an editorial in the Atlanta Journal-Constitution suggests that taxpayers may have gotten the short end of the baseball bat.

According to the article, the publicly-funded stadium in Gwinnett County was originally slated to cost $45 million to construct, but the most recent (and not final) construction tab was $64 million. Furthermore, the county has been unable to sell naming rights to the stadium, which was projected to cover 20 percent of the stadium’s debt service.

Author J.C. Bradbury echoes many of the similar complaints about the proposal to build a stadium in Shockoe Bottom.

From the article:

It is quite simple: money spent at the ballpark has to come from somewhere, and that somewhere is other entertainment options within Gwinnett. The county isn’t getting any richer, it’s just shuffling its existing wealth around. And to make matters worse, the bulk of the spending will be transferred to Liberty Media shareholders (who own the Braves) outside the county.

Richmond Baseball Club set to take over Defender’s lease

Last month, Bryan Bostic of Richmond Baseball Club LC announced they planned to buy a AA baseball team in Connecticut to replace the AAA Richmond Braves.

Their plan to buy  the Connecticut  Defenders is closer to becoming a reality, despite no guarantee that the stadium slated for Shockoe Bottom will be built.

According to local newspaper The Day, Norwich City Council will consider a resolution next Monday that would assign the lease of Dodd Stadium to Richmond Baseball Club.

The Defenders’ current owner Lou DiBella said the team could be sold to Richmond by early April, according to The Day.  The sale is still awaiting approval from the Eastern League, which will likely require either a new stadium or an upgraded Diamond as a condition of the sale.

The Times-Dispatch previously reported the expected purchase price will be $15 million.

The Defenders current lease in Norwich ends in 2012, but there is a buyout provision that allows the lease holder to terminate early for a penalty of $140,000.

According to previous statements, the investors would move the team to Richmond for the 2010 season. The team would play at the Diamond until the new stadium is finished in 2011 or 2012.