Did a consultant shuck and jive Biloxi into falling for a bad bond deal? The city of Biloxi is paying $600,000 per year for bonds that were used to pay for the construction of a stadium to host the AA minor league Biloxi Shuckers. A Johnson Consulting "study" projected attendance to average 4,300 per game. Unfortunately, the Shuckers have averaged 2,530 per game, a far cry from the home runs promised by the consultants. Posted below are some highlights of the "study."
1. That Biloxi-Gulfport market is attractive for baseball and that the projections used are reasonable to conservative. We actually expect the attendance to be among league leaders, as the casinos can unleash their marketing prowess to market attendance. We also see the special event and concert market having greater potential than projected, if the Stadium evolves into the “Town Square” we expect can happen.
2. The proposed project creates a destination/district in the downtown, as opposed to an isolated stadium development. The chosen site is excellent and can lever new hotel, retail and residential development.
3. The $34 million direct, induced and indirect spending volume created by the attendees will help existing gaming, retail and restaurant establishments. This volume can help justify residential, hotel and retail in the future.
To remain conservative in our approach, Johnson Consulting has assumed attendance will remain consistent over a ten year period. Beginning in 2015, average paid attendance at regular season baseball games is projected to be 4,300. Attendance projections are based largely on the recent historical average for the Southern League and all of AA baseball, which is shown in Figure 3-1...
Meanwhile, here is the actual attendance provided by the Southern League's website:
2019: 2,353 (30,585)
2018: 2,430 (160,364)
2017: 2,572 (167,151)
2016: 2,692 (180,384)
2015: 2,604 (164,076)
AVERAGE ATTENDANCE PER GAME: 2,530
A far cry from the projected attendance of 4,300 per game. Chalk one up to the CON-sultants. WLOX reported earlier this week:
The city borrowed $21 million and each year owes $1.2 million for bond payments. The problem is the stadium and ball club only generate about $600,000 in revenue for the city. It was supposed to be much more than that.
That leaves the city making up the rest of the payment out of the general fund.
When the Shuckers first came to town, a feasibility study predicted attendance to be more than 4,100 people per game. But it’s never come close to that, and neither has the dollars coming to the city.
The bonds have a remaining life of 17 years.
12 comments:
I just returned from a week long trip to the Gulf Coast. The Shuckers played a mid week game within a stones throw of my hotel but I could not find the time to go to a minor league baseball game even though I had nothing else to do. It just doesn't seem attractive enough. I would go see State or Ole Miss if they were playing there, and I might catch a Braves game next time I go to Atlanta, but the Shuckers? They intentionally overestimate the interest visitors have in minor league baseball. Biloxi city officials should have taken a trip to another minor league city for a convention or leisure and judge the attraction of minor league baseball before they buy the consultants bullshit. It ain't all that.
How many luxury sky boxes were the city "leaders" promised? You know, the ones with plush seats, free drinks, free food, sexy servers, free shirts/hats, etc.
Yawn.
I know nothing about consulting for this type of project I do however in my last lets say 45 years of retail consulting know one thing for sure static number are a lie. If you are doing any kind of long term projection (1 to 15 years) numbers change up or down but never static. Any consultant worth their beans knows cycles are inbreed into the system. Having said that what city or county official would look at those projections and say; what a deal they never lose attendance the number never go down, this is a winner. If they have a bad year and suck the attendance never goes down, wow, what a deal, we can't lose.
Unless they know some magic that I don't how the hell can you sell these numbers with a straight face?
Like ALL consultants they build fences around their words like,as expected, approximately, conservative, assumptions. I did not read the entire report. Here are my highlights
The balance of this report supports our conclusion that this investment by the City is low risk.
The deal structure is conservatively low risk
Attendance should be very competitive
AND drum roll please
Moreover, some of the estimates and analyses presented in this study are based on trends and assumptions, which can result in differences between the projected results and the actual results.
saw on a earlier post that dr bill walker and his pretty boy son had season tickets right behind home late. walker is the former director of the ms dept of marine resources who stole about a half million taxpayer dollers. i think that guy infects everything he touches.
Mississippi has the best Socialism, don't we folks?
IF YOU BUILD IT THEY WILL COME is a smooth line that many cities fall for. Tupelo spent $14million in bond money for a heated olympic pool. I haven't heard anyone at city hall bragging about how great that investment was.
Have easily dropped $1500 since 2015 on hotels, restaurants, shopping and fuel in Tupelo attending swim meets. Hopefully none of that benefit goes to assisting sour pusses like Rod Knox.
Sour pusses like Rod Knox exist in every community. They constantly criticize from the sidelines, and never step up to bat themselves. This type person made great grades in school, feel they are owed something, but have never succeeded in any walk of life, because they are not confident, good with people and are bitter....some people refer to them as "losers". They love commenting from afar.
If your surmising of me is indicative of your insight into business and finance I hope that the GOP doesn't trash Social Security before you can enjoy your golden years 4:31. But thank you 10:10your generosity will be of some help to cover the operating costs of that monument but the tax payers here will almost certainly be paying off that bond issue.
It is good to know that some visitors here are happy to pay their taxes knowing that every dollar will be applied to worthwhile uses. But I doubt that I am alone in the state or even on this forum in my disgust of state and local Waste-Fraud & Abuse of what is stolen from me.
6:53 got ahold of some pretty good dope....
Have you checked the bond offering documents? I'm wondering how the projections used in the Official Statement compare with the projections in the consultant's study. Were the consultant's projections used or were different projections used in the official statement.
A yes or no suffices and no need to publish this comment.
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