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It's quiet at ballpark work site
Loan that is being negotiated will need OK from state commission
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Published: July 3, 2009
Updated: 07/03/2009 12:25 am
City officials last month rushed to consider and approve $15.7 million in assistance for the downtown baseball stadium, partly because they said they needed to move quickly to secure the loans that would complete a critical project.
But the loans that were at risk were the ones taken out by the team owner, not the city.
Now, city officials have delayed a vote by a state agency that must approve the city's own loan. The city is borrowing the money, which it will then turn over to Winston-Salem Dash owner Billy Prim, who is to pay the money back over 25 years.
It is not clear how the delay will affect construction.
The Local Government Commission, an arm of the state treasurer's office, is charged with approving loans taken out by local governments to prevent local governments from borrowing more money than they can pay back.
The commission's July meeting is scheduled for next week, but Winston-Salem's stadium-loan request is not on the commission's agenda.
City manager Lee Garrity said yesterday that city officials did not ask the commission to put the stadium request on the July agenda because they are still negotiating the terms of the city's loan with BB&T.
"We just want to make sure we get the best interest rate for the city," Garrity said.
Mayor Allen Joines, who served on the Local Government Commission, said the closing documents for the city's loan are not ready. Joines' appointment to the commission expired Tuesday.
"When you go to the Local Government Commission, you lay out the rate, the term, fees -- things like that," Joines said. He said that Denise Bell, the city's chief finance officer, was still completing those terms.
Joines said he did not know if the city's decision to wait to ask the commission for approval would affect construction.
The city's additional financial involvement has been a sensitive issue for voters. More than 200 people showed up at each of two public hearings last month about the bailout. The city already had given $12 million to help build the stadium at the corner of First Street and Peters Creek Parkway.
Team owner Billy Prim, who also owns the development company that is building the stadium, said in June that he hoped construction would begin again before the end of the summer. He said then that the loans had to go through closing before construction could resume.
Prim could not be reached for comment yesterday.
When the council approved the additional financing, the city put several caveats on the deal -- the stadium would be open to city residents for two free events each year. The city would get a percentage of the profits of an office building to be built behind the ballpark. And, because the city intended to borrow the money it would lend to the ballpark developers, the Local Government Commission had to approve the plan.
The week of the decision and public hearings, Joines said that the deal had to be approved quickly because the banks that were lending money had put a time limit on their loan offers.
Joines said yesterday that those time limits applied to the loans that Prim's development company and other private investors were taking out from a group of banks. The loan the city is taking out, he said, had no time limit.
Joines said that the banks loaning Prim's development company money likely would not have approved the loans if the city had not agreed to contribute more money.
Joines and Prim have both said that without the city's additional involvement, the stadium would not be finished, putting the city's initial $12 million investment at risk.
The city could still ask the Local Government Commission to call a special meeting in July to consider the city's loan.
Though Joines' appointment to the commission expired this week, Heather Franco, the deputy director of communications for the state treasurer's office, said that members of the commission typically continue serving until their replacement is appointed. She said that so far, no replacements have been appointed.
Joines said that if he was on the commission when Winston-Salem's request came up, he would remove himself from the vote.
Construction on the stadium has been stalled for months as Prim negotiated a buyout with his former business partner and brother-in-law, Andrew "Flip" Filipowski. Prim and Joines have each said construction cannot resume without the city's help.
The stadium would cost $40.7 million and have 5,500 fixed seats. It would become home to the single-A Winston-Salem Dash, an affiliate of the Chicago White Sox.
■ Laura Graff can be reached at 727-7279 or at lgraff@wsjournal.com.
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