Following up on Phil's post about the shortfall in revenues at the Braves' minor league stadium in Gwinnett, here is a tale of financial folly that's about to unfold in Birmingham:
City leaders last week approved agreements and incentives to lure the Birmingham Barons back to town after a two-decade run in Hoover. Mayor William Bell called the publicly funded project an engine for private development around it.
The city's costs include nearly $60 million to build the stadium and an accompanying Negro League museum and more than $600,000 to buy out the team's lease in Hoover if the Barons begin playing downtown as expected in 2013.
The revenue from the stadium itself won't begin to pay those costs, and it's not expected to, leaders said.
The Barons could gross $3.7 million a year from a contract that gives the team control of concessions and most of the ticket revenue and suite revenue, estimates Jason Klein, a California-based baseball marketing expert. Klein, of 88 Marketing, made his estimates by analyzing terms of the Barons' lease as well as average attendance numbers for the team.
The city stands to earn about $315,000 annually from the revenue-sharing agreement with the team, according to Klein's estimates. The city also will receive $400,000 a year in rent.
As the article notes, the projected cost for Birmingham's stadium is $60 million, substantially higher than the typical minor league ballpark, and about the same as the stadium for the Gwinnett Braves. JC Bradbury predicted the outcome in Gwinnett before the ground was broken. Is there any reason to believe the outcome in Birmingham will be any different? I don't think so.