MUSEC funding Q&A

The Herald-Mail recently posed a number of questions about the proposed downtown multiuse sports and events center (MUSEC).

The following are the questions and the answers provided by city staff members — Administrator Bruce Zimmerman, MUSEC Project Manager Jill Estavillo, Finance Director Michelle Burker, Engineer Rodney Tissue and Communications Manager Erin Wolfe.


Q. What properties would be acquired for the stadium/parking deck project? Provide specific locations please.
A: Properties to be acquired: Car wash — 32 W. Baltimore St.; Washington County building — 80 W. Baltimore St.; Laundromat — 140 Summit Ave.; Herald Mail parking lot — 100 Summit Ave.; Columbia Bank parking lot and West Antietam Street properties — 25, 29, 31-33 and 37 W. Antietam St.

If sufficient funding is received, the West Antietam Street properties will be acquired to create a plaza and entranceway to the stadium. We’re hopeful of being able to complete the plaza to provide an attractive entrance to the MUSEC, an actively programmed public space and a significant improvement over the deteriorated condition of several properties along West Antietam Street.


Q. What is the projected cost of total property acquisition? Please list property by property and the total.
A: The total estimate for acquisition of properties is projected in the range of $5.5 million to $6.5 million in the Preliminary Funding Plan. Publicly stating estimated acquisition costs for the individual properties could undermine the acquisition process.


Q. Are owners being offered assessed value?
A: Acquisitions are currently being discussed and negotiated with some property owners. A combination of property appraisals, assessed values and related property information will all go into the determination of acquisition prices. Publicly discussing potential purchase prices could undermine the acquisition process. All real estate transactions must be approved by mayor and city council in public session.
 

Q. Is that assessment office assessed value or are properties being assessed privately by someone hired by the city or hired by someone else?
A: The state assessment values are being used along with appraisal information provided by an appraiser hired by the city.


Q. If properties are being reassessed, who pays for that?
A: Assessments are conducted by the state every three years. This project does not involve reassessments by the state.
 

Q. What are the assessed values of the properties to be acquired?
A: The assessed value for all properties identified (above) is $5.3 million based on information provided by the state assessment office.   


Q. What is the projected cost of the parking deck?
A: We used $8,150,000 as reflected in the funding plan presented on Oct. 9. This includes real estate acquisition, design and construction. This is a preliminary cost estimate, which is based on industry standards, not a specific design.


Q. What is the projected size of the parking deck? How many floors, how many spaces? How does parking deck compare in cost and size to A&E and Potomac decks?
A: The parking deck is proposed to be approximately 400 spaces, three to four floors with approximately 127 parking spaces per floor. This compares to the North Potomac Street Deck which is 440 spaces and five floors and the A&E Deck which is 185 spaces and 4.5 floors.

The A&E Deck cost $3.2 million and has approximately half the spaces as the proposed parking deck. It was built in 2005. The North Potomac Street Deck was built in 1986 and the figures for its cost were not readily available.


Q. What is projected cost of razing the buildings? What is projected annual loss to tax rolls of losing those buildings?
A: Our Preliminary Funding Plan includes an estimate of $275,000 for demolition of properties. This is only a staff estimate, and the work has not yet been bid. The project will generate a net increase in property tax revenue from surrounding redevelopment and reinvestment. As projected in the Ripken Group’s most conservative model, the project could generate new city property tax revenue of more than $4 million over 10 years within a quarter-mile radius of the site. Using current assessed values, the properties potentially to be acquired generate approximately $31,000 annually in city property tax revenue.
 

Q. What’s the status of environmental studies? Cost?
A: The Phase 1 Environmental Study is complete and the city paid $3,775 to ECS Mid-Atlantic LLC for this work. The Phase 2 Environmental Study, which is not yet complete, was awarded to Triad Engineering on Aug. 24 at a cost of $8,345.

Q. Once the stadium is built, who pays for maintenance?
A: The current lease negotiations contemplate the Suns will be responsible for and fund all routine facility and field maintenance expenses, including but not limited to cleaning, general repairs and replacement of concession or other equipment. The city will contribute no funding for stadium operations or maintenance, but will be responsible for maintenance of the field lights. The Suns will also pay for the utilities.

Currently, as reflected in the Ripken Report, the city pays $274,037 per year for maintenance and utilities at Municipal Stadium. The Preliminary Funding Plan for the MUSEC as presented on Oct. 9 includes $85,000 in annual city operating expenses. This is primarily for security and traffic control. In addition, the Oct. 9 Funding Plan includes $50,000 in annual city expense for a capital reserve fund the city will establish and use at its discretion for future upgrades at the MUSEC as it ages.


Q. Who pays utilities?
A: The Suns, as described above.


Q. What is the annual amount the Suns will pay to lease the building?
A: The business terms of the lease project the Hagerstown Suns will pay $300,000 for 20 years. Including a proposed inflation clause, this amounts to $6.2 million over 20 years.


Q. How will that lease money be used? To pay down debt on stadium, maintenance, etc.?
A: The Oct. 9 Funding Plan shows that the Suns lease payments of $300,000 are included as a portion of the annual operating revenues for the project. These operating revenues in turn will fund the city’s operating expenses as shown in the plan and also contribute toward funding of project construction contingencies and downtown redevelopment initiatives. Please refer to Section 2 of the Funding Plan.


Q. Who will pay to keep grounds playable for baseball?
A: The Suns, in accordance with terms of the lease, which are still under negotiation.


Q. Who will be responsible for day-to-day operations at the stadium?
A: The Suns, in accordance with terms of the lease, which are still under negotiation.

 
Q. How much can the city borrow without adversely affecting its credit rating?
A: The city has and will continue to consult our financial advisor related to borrowing. Credit ratings are determined by bond rating agencies.