A decrease in the annual rent amount on Dickey-Stephens Park that the Arkansas Travelers paid to North Little Rock this month wasn’t unexpected, Mayor Joe Smith said last week, but he predicted that officials may soon tweak the payment formula to ensure a set amount each year.
The Arkansas Travelers Baseball Club paid the city $800,350 earlier this month, based on net proceeds from the 2012 season. The annual payment goes toward the city’s remaining construction debt on 6-year-oldDickey-Stephens Park, the $40.4 million, minor-league ballpark the city built with mostly taxpayer money.
The Travelers paid $981,572 last year, based on the 2011 season in which the Travelers reached the Texas League championship series. The amount paid in 2011 was $837,662, based on 2010 net revenue.
This month’s payment would have surpassed the 2011 payment, but the Travelers held back $120,000 for “operation reserves.” Keeping some of the payment for the ballclub’s reserves is allowed in the 2007 contract between the city and the baseball organization, but it’s the first time the ballclub has exercised that clause in its six seasons. The ballpark opened in April 2007.
Russ Meeks, president of the Travelers executive committee, said Friday that the ballclub is setting aside money for major purchases involving repairs and upgrades to the stadium, now into its seventh season. Some of the “bigger projects,” he said, include the batting cage, bathrooms and bathroom fixtures, refurbishing of luxury suites, plus the general aging of the facility.
“We’re finally reaching a point with that beautiful stadium where we’ve got to be aware that it’s aging,” Meeks said.
Smith said he wasn’t concerned about the $120,000 that was kept back this year.
“I’m pleased with the $800,000 payment,” Smith said. “We are slowly but surely paying that loan off.”
North Little Rock built the ballpark using the bulk of revenue from a two-year, 1 percent city sales tax that North Little Rock voters approved in August 2005 . The stadium had a cost overrun of $6.3 million by the time it was completed because of an increase in the price of construction materials and additional features meant as upgrades to the original design, city officials said at the time.
The city now owes $2,503,647 on the ballpark debt, North Little Rock Finance Director Bob Sisson said. The payment, due by each April, is regarded as a combination of “basic rent” and “additional rent” - the latter being double the “basic rent” amount and to be included until the construction debt is paid. The operations reserve comes out of the “additional rent” portion.
Having a set amount to be paid each year, or possibly a simpler formula for figuring the payment, could be beneficial to both sides, Smith said.
“Probably in the next couple of weeks we’ll sit down and visit with them, do some tweaking to the contract we have with them a little bit,” the mayor said. “We have some ideas in our minds to where the rent might be easier to figure. Maybe have strictly a flat rate and then maybe so much per attendee. Then we don’t have to get into a discussion over their financial statements or anything.
“We’ll get together and see if there’s a better way that’s good for them and good for us,” he added.
Meeks said that such discussions have been approached over the past two years and that “everything is on the table” between the city and the Travelers.
“The agreement that we have in place is very good, very workable and is very fair to both,” Meeks said. “There’s nothing specific at this point.”
The drop-off in the payment amount, Smith said he believed, is because the ballpark “had some suites that were not sold” for this baseball season that began earlier this month.
“It’s a pretty good chunk, about $35,000 per suite,” the mayor said of the revenue drop. “If they get those suites leased or sold, I expect to get that money back.”
Meeks countered that “vacancies” in some season-long suite agreements aren’t unusual.
“A lot of that is economics,” Meeks said. “That really is not an issue. The issue for the suites and the reserve fund is we need to update those, repaint, refurbish. But the suites are an important part of the overall operations.”
Northwest Arkansas, Pages 17 on 04/28/2013