P-Nats aim to build home with private funds

The 2014 season saw new Minor League ballparks open in Charlotte and El Paso. These will be joined in 2015 by brand-new facilities in Nashville, Biloxi and Morgantown. The cities of Hartford and Columbia are expected to join the mix in 2016, as construction is now underway in both locales.

The specific mechanisms for funding the construction of the above seven ballparks are as diverse as the cities they represent, but one key aspect unites them all: public money. Whether it's via the implementation of a new sales tax or the issuance of municipal bonds, public funding has been a crucial -- and controversial -- component of the current Minor League Baseball landscape. The "stadium boom" that has helped revolutionize the industry over the past two decades would have been impossible without it.

Constructing a ballpark strictly with private funds, while rare, is not unprecedented. Lew Chamberlin and Dennis Baxter, owners of the West Michigan Whitecaps, funded the team's home of Fifth Third Ballpark after assembling a consortium of local investors and securing a commercial loan. That facility opened in 1994. And now the Potomac Nationals -- Washington's Class A Advanced affiliate -- are also attempting to build with private funds. Their process will be quite different, however.

A work of Art

Art Silber has owned the Potomac Nationals -- P-Nats, for short -- for the last quarter century. He is perhaps best-known within Minor League Baseball for his hands-on and enthusiastic attitude toward the sport. Silber served as the P-Nats' first base coach through the 2011 season -- retiring from that position at the age of 71 -- and he will still occasionally take batting practice with the team while in full uniform. Silber, who grew up in the shadow of Ebbets Field in Brooklyn, also holds the distinction of being the last individual in Minor League Baseball to wear uniform number 42.

"I have a long background with Jackie Robinson," he said. "From age seven through 15, I used to walk to the player's entrance with him. I lived half a block away. He was a truly extraordinary man. I wore [42] playing high school ball and in college, and after I bought the ballclub I knew I wanted to wear that number while coaching first base."

Silber's boyish enthusiasms are complemented by a sharp business mind. He bought the P-Nats (then known as the Prince William Cannons) in 1990, a time when he was the president and CEO of Sterling Bank in Baltimore. The team has played at Pfitzner Stadium, located in the town of Woodbridge, Virginia, for the entirety of Silber's tenure as owner. The no-frills facility opened in 1984, and more than three decades later it is certainly showing its age. Uncovered bleacher seating predominates, and in recent years the club has had to renovate the playing field in order for it to meet Minor League Baseball specifications. The question is not if the stadium should be replaced, it's just a matter of how.

"We didn't feel that we wanted to be guided [by previous stadium funding efforts]," said Silber. "Not that anyone else did anything wrong by any means, just that the uniqueness of our location and the size of our market meant developing our own financial plan.

"In order to do it independently, you have to believe that you're going to have a very high attendance, and in a market where the price points are higher than other teams can do. That depends on the income level of where you are. As a suburb of Washington, D.C., we are certainly in one of the largest population markets in the United States. And, four of the top 10 counties in the country, as far as family income, are in the greater Washington area."

Such demographics, rare within the small market world of Minor League Baseball, are obviously favorable to the creation of large and reliable revenue streams. The conditions become more favorable after considering the ballpark's proposed location within Woodbridge's Potomac Town Center, a massive shopping center highlighted by a 138,000 square-foot Wegman's Supermarket visited by an estimated two and a half million people annually. Roadside Development, the real-estate firm behind this project, wants the P-Nats to be a part of it.

"They looked at us as a signature piece that they would be able to add to this project, in terms of increasing its value," said Silber. "Consequently they were able to structure a long-term lease for the land at what were really very favorable terms for us."

Improving the situation even further, the state of Virginia is adding a commuter parking garage to the area that will be able to accommodate stadium visitors.

"So we're in a position where the parking isn't costing us anything and land is available on a favorable basis," said Silber. "Now, we have to cover the cost of building a top-notch stadium with all of the bells and whistles."

If you sponsor it, they will build

In most cases, a team builds a stadium and then attempts to sell the naming rights. The P-Nats are doing it the other way around. Silber intends to sell four naming rights deals -- or "founding partnerships" -- which would generate enough annual revenue to exceed the debt services on an estimated $35 million facility. These partnerships, therefore, establish the solid financial base from which the whole project can proceed.

The first such partnership, with HVAC service company F.H. Furr, was announced in December. As the team described in a press release, "F.H. Furr will be privy to prominent brand exposure through the conduit of P-Nats marketing assets."

"The critical thing is the location of our ballpark, as our ability to sell naming rights is tied in with our visibility," said Silber. "In our particular case, we're on a major road. The ballpark will be built on [Interstate] 95. A couple hundred of thousand cars go by, north and south, and there's a crosswalk where 40,000 cars pass by in traffic.

"So, for our sports marketing people, it wasn't a question of how much [other Minor League naming rights deals] had sold for," he continued. "It was a question of 'How many times are our naming rights partners going to be seen?' That has been a driving force in terms of our believing that this is something that we can make happen."

Details regarding a second "founding partnership" should be made public at some point in the near future, and Silber reports that the team is in the process of securing a third as well. If and when all four are obtained, then construction should follow shortly thereafter.

"As a banker, I spent my whole career analyzing the financial viability of things. We're not about to do something that won't work," said Silber. "I'm extremely optimistic."