McHenry County Blog

McHenry County College's baseball stadium has gotten most of the attention of people interested in college expansion plans.

That has irritated those pushing the baseball stadium to no end, because they think the nursing program part of Health, Wellness and Athletic Complex is most important.

The MCC board majority would probably be surprised that, when they learn about it, most people agree.

“Why are they even talking about a baseball stadium?” is a typical reaction.

But, Economics Research Associates do not break out the revenue streams for the baseball stadium from those for the fitness center.

How strange.

As if ERA had been instructed not to do so.

My guess is that it's because the baseball stadium will provide 36% (or something in that range) of the revenue, while its cost exceeds that.

For almost the entire debate prior to the city council vote, the public was led to believe that the baseball stadium would bring in 64% of the project revenues. That's what the Northwest Herald reported MCC President Walt Packard said in early June, 2007.

But, he admitted to me that he misspoke in that interview.

64% is significantly more than what the expansion would cost.

Now the question is whether the baseball stadium will pay what it costs.

The first ERA report seemed to say the answer was “No.”


I couldn't find an updated answer in the 2nd ERA study.

One should be able to find that cost-benefit ratio.

It tells whether the taxpayers can expect to be forced to subsidize baseball promoter Pete Heitman's and Mark Houser's little game.

Now the question is whether the baseball stadium will pay what it costs.

I couldn't find that answer in the ERA study.

One should be able to find that cost-benefit ratio.

Labels: Baseball Stadium, Economics Research Associates, ERA, HWAC, MCC, McHenry County College, Pete Heitman, Walt Packard

In my Fantasy Baseball article in late February, re-printed Tuesday, McHenry County Blog examined McHenry County College's Economics Research Associates' second feasibility study on its baseball stadium.

First attendance projections were analyzed and found to be woefully inadequate.

A college professor would label that section “INCOMPLETE.”

Secondly, the ERA naming rights analysis was examined.

Despite the reported fact that the team in Schaumburg gets $200,000 a year from Alexian Brothers, a hospital group, the consultants think the junior college could get $250,000 a year.

Today, let's look at non-baseball events at the stadium.

Concerts, amateur baseball games, etc.

Here's the developer's project on non-baseball events:

”The developer has projected net revenues of $275,000 per year from non-baseball events (such as concerts, other sporting events, civic events, and others). This line item is considered separately from other team and ballpark items, as it would not contribute to rent or ticket surcharge payments. The only details provided to support this forecast is an assumption of 50 to 60 events with a total of 25,000 to 35,000 attendees.”

Isn't that special?

Economics Research Associates brags that it did work on all of Disney's parks.

Somehow I doubt such non-fact based analysis would have been found acceptable by Disney, even in Fantasia mode.

In the first year stadium revenue is listed as $732,837.

The non-baseball share is $275,000.

That's a big chunk of the $733,000 to accept on faith.

“According to conversations with the developer, this estimate is based on a generic operating model for a Frontier League ballpark that has been supplied by the league office, and could likely be aggressive.”

Talk about understatement.

No specifics provided.

No specifics requested.

Perhaps Economic Research Associates does not deserve the reputation it projects.

“The eventual amount of non-baseball revenue will be largely dependent on the type and number of the events that are allowed to be held. Events such as concerts would have the ability to generate more revenue, but if only civic events such as high school baseball games can be held at the stadium, these revenues would be significantly lower.

“Without performing a market analysis or having a completed agreement on the number and type of allowable events, it is not possible to analyze this projection in further detail.”

Consider also that a week ago Hoffman Estates has just announced an outdoor concert venue where Poplar Creek used to be, right on the tollway.

This announcement appeared in the Chicago Tribune before ERA's February 26, 2008, feasibility study submission date.

Sounds like it might draw McHenry County residents and be relevant to any market analysis on non-baseball team use of the new baseball stadium.

Oh.

I forgot, ERA did no market analysis.

Labels: Baseball Stadium, Economics Research Associates, ERA, MCC, McHenry County College

I know that MCC President Walt Packard announced the baseball stadium proposal is dead, but I still want to critique Economics Research Associates' second analysis on Mark Houser's and Pete Heitman's McHenry County College baseball stadium proposal covers naming rights of the stadium and inside recreation facility.

Just in case, it comes back again.

On page 16, $250,000 is again reported as the annual price for naming the stadium. It assumes a 20% increase every five years.

ERA's Dave Stone doesn't say much about this early expected revenue.

Maybe that's because there isn't a lot of support for that very important number.

In Bridgeport, the largest city in Connecticut has been trying to sell naming rights for ten years and have failed to do so.

“As the data shows $250,000 per year is achievable for an independent ballpark, and in fact has been exceeded, but is toward the high end of completed deals in independent baseball,” the report reads.

Fargo got $300,000 to name its stadium Newman Outdoor Field; Camden, NJ got $300,000. Camden's is named Campbell's Field.

Neither are in the Frontier League.

The highest naming rights--$125,000--cited in the Frontier League is Florence, Kentucky, across the Ohio River from Cincinnati.

And, that's in a TV media market, which Crystal Lake definitely is not.

GMC Park in Sauget, Illinois, where Gateway Grizzles play, was $100,000. It's now called GCS Ball park, but no payment is listed.

Twenty-one teams (five Frontier League teams have no figures) are listed, but naming rights payments are listed for only thirteen.

And, there is no indication of the comparability of any of these teams to Crystal Lake's market.

In Schaumburg, the team gets $200,000; in Joliet the amount is $150,000.

And ERA says $250,000 a year is achievable.

Competitive area naming rights are not $250,000.

Menard's like flags, so maybe it will be interested.

Or, perhaps, Blain's Farm and Fleet will bite. I noticed it is flying American Flags on in Woodstock.

Tinker Bell, where is your magic wand?

Labels: Baseball Stadium, Dave Stone, Economics Research Associates, ERA, Mark Houser, MCC, McHenry County College, Pete Heitman, Walt Packard

For the second meeting in less than a month, I left the room whistling,

“Ding, dong the witch is dead. Which old witch? The wicked witch...”

And, this time I even came up with appropriate words before I got home from the McHenry County College Board meeting.


The reason that minor league baseball promoter Pete Heitman's pitch was dead?

After an embarrassingly inadequate 3rd party analysis by Dave Stone of Economics Research Associates of Heitman's and his buddy Mark Houser's projected figures and probing questions by MCC Trustee Donna Kurtz, MCC President Walt Packard read the following statement:

“The presentation we just heard makes a case that this project was put forward on a sound basis. It suggests that if the Board choose to move forward with just the Health Wellness and Athletic building it has potential for supporting itself.

“That being said, I am recommending that we not move forward with this project in its current form.

“Furthermore, I would propose that we take formal action to sunset this specific project at our April Board meeting.

“The Board should be proud of the fact that it has successful(ly) taken action that will allow us to purchase the Gilger property. It should not be lost on any one that this is a major step for our college. And the Board should be applauded for having made an historic, forward thinking sound business decision.

“The Board also took our Facilities Master Plan and made a valiant attempt at implementing a portion of it in a manner that we believed might very well have allowed us to add much needed facilities to our campus without going to the tax payers as the source for funding.

“For a variety of reasons, this does not appear to be a time when we can bring that plan to fruition.

“Therefore, I am recommending that we

• terminate the combined HWAC stadium project;


• take a fresh look at our Facilities plan and


• aggressively commit ourselves to identifying a sound fiscal approach for making needed facilities become a reality.”

The statement was evidently put together at the last minute. President Packard was kind enough to provide copies after the meeting. I tried to correct the typographic errors.

It was evident long ago, of course, that the Frontier League baseball stadium proposal was melting, just like the wicked witch.

The unanimous rejection of MCC's re-zoning proposal by the Crystal Lake Planning and Zoning Commission during our supremely wet summer gave a clue.

So did the public defection of two articulate board members—Donna Kurtz and Scott Summers--at the Crystal Lake City Council meeting.

And the subsequent rejection by the Crystal Lake's City Council of Mayor Aaron Shepley strongly stated support.

Plus, the public reaction of the MCC Board majority's 4-3 censure of the two trustees who announced their change of opinion at the re-zoning meeting.

Then, Geraldine Cowlin made known that she thought the junior college had gone so far off target by involving itself in minor league baseball that she withdrew a $1 million pledge of scholarship money.

After the statement, several trustees made comments.

“For a number of months,” Summers said, “I have had misgivings and anxieties about this project. I will spare the public (my reasons, considering President Packard's announcement). Candidly, (I remember) with bitterness six months ago (when) two trustees were censured for taking a position not dissimilar from the recommendation (by our own) president.”

“I take umbrage with Mr. Summers (remarks),” MCC Board President George Lowe interjected. “You had an opportunity to vote on this and you did. Then, you changed your opinion at the last minute.”

Committee of the Whole Chairwoman Frances Glosson said that the lesson to be learned was to get community input first.

“Thank you for all of your passions,” she said to those in the audience who had taken part in the debate.

“I think we need to prove ourselves to the public when it comes to the HWAC,” Kurtz added. “To try to get it done without community input (won't work),”

“I'm glad you're coming to this late to the table,” Lowe said with a raised voice.

“I want respectful comments,” Glosson chided Lowe.

“Do you want me to leave?” Lowe replied. “I'm fed up!”

The next item on the board agency was “non-violent communication,” which Glosson thought was appropriate.

I stood up, turned around and shook Rosemary Kurtz' hand. Then, I went out to talk to the Harvard baseball team promoter, whose stadium will be privately financed.

The pitch had melted.

Oh, yes.

The other meeting where I left whistling, “Ding dong the witch is dead,” was the McHenry County Republican Central Committee convention. The analogy was not as good a fit as last night, but I assure you it wasn't completely irrelevant.

= = = = =
On top, the man taking a picture of me taking a picture of him is baseball promoter Pete Heitman. Next comes Economics Research Associates analyst Dave Stone explaining how ERA agrees with Heitman's projections. Dr. Walt Packard is the man with his left arm outstretched. Under his picture are EquityOne's Mark Houser, Pete Heitman and Frontier League Commissioner Bill Lee being led from Packard's office last spring to a secret meeting. The three Crystal Lake City Councilmen who put the kabosh on the McHenry County College's appear next. From left to right, they are Ralph Dawson, Brett Hopkins and Jeff Thorsen. Below, in descending order, are MCC Trustees Scott Summers, George Lowe and Donna Kurtz.

And, who should show up after the meeting but my father.

True he was only on a plaque, but the new Board Secretary found his picture in a drawer and brought it out for me to see. He was elected to the original MCC Board and served from 1967-70.

Labels: Dave Stone, Donna Kurtrz, Economics Research Associates, ERA, Frances Glosson, George Lowe, Mark Houser, MCC, McHenry County College, Pete Heitman, Rosemary Kurtz, Scott Summers, Walt Packard

Since the McHenry County College Board is meeting tonight to hear the woefully weak (because there is no market analysis, among other reasons) so-called 3rd party critique, I am r4priting this article of how the McHenry County College Board majority could start over with their baseball stadium campaign.

The meeting is at 6 PM.

I see no indication that anything will be different from before, except they are making the report public a lot sooner than they did the devastating first one by Economics Research Associates.

At the McHenry County Economic Development Corporation dinner Thursday night, Northwest Herald General Manager and Executive Editor Chris Krug inspired some thoughts about how McHenry County College might gain consensus on building a baseball stadium in Crystal Lake.

1. Start over.

2. Allow competition, that is, don't freeze out the competition before deciding on a baseball promoter, as was done last year.

3. Have the promoters make public pitches at a hearing at which both the public and board can ask questions. Put the people testifying under oath. College board members and officials have experience with such a process. It occurred when they appeared before the Crystal Lake Planning and Zoning Commission. If they would like to avoid the appearance of a conflict of interest, who knows, Tom Hayden, the man who conducted the eminently fair hearings on the MCC zoning request, might be willing to act as a hearing officer. And, if the college would be willing, the hearing could be probably be conducted at the city council chambers where it could be filmed for broadcast on cable television throughout the district.

4. Require all petitioners to reveal everyone who has beneficial interests in their teams. Krug agreed with that.

5. Require a conflict of interest certification that none of the college trustees or officials or members of their immediate families have any beneficial interest, including, further consulting contract(s), etc., with immediate disclosure of any such contract on the part of any of the applicants. Forfeiture of the lease would be the consequence.

6. Require the the promoter to pay for the stadium and ground rent that does not amount to a sweetheart deal. The Economics Research Associates re-do, corrected after read by McHenry County College President Walt Packard reports on page 22 that the team in Lincoln, Nebraska, “contributed $10 million towards the construction of the stadium, which was considered prepaid lease payments for 35 years, or an average of $285,000 per year.”

7. Require the quantification of any public subsidy, including, but not limited to road improvements.

There is one other idea that Economics Research Associates consultant Richard Starr came up with out in the hall. He suggested building condos surrounding the stadium so people could watch the games from their porches and windows.

Read Part 1 of “If I Supported a Baseball Stadium...”

Read Part 2 of “If I Supported a Baseball Stadium..."

= = = = =
On top is a rendering of what the front of Pete Heitman's baseball stadium would look like. At the bottom is an aerial view of the proposed Harvard stadium. The head shot is of Crystal Lake Planning and Zoning Commission chairman and former city councilman Tom Hayden.

Labels: Baseball Stadium, Economics Research Associates, ERA, MCC, McHenry County College

If you attend the McHenry County College Board meeting tonight at 6 PM or read a story about it, see how many of the questions that I asked to be answered and handed to the Economics Research Associates folks get answered.

Saturday, November 17, 2007

Questions to MCC Board and 3rd Party Reviewer of MCC Baseball Stadium Promises

Since the McHenry County College Board minutes bear little if any relationship to what I say to the board, here's what I passed out and summarized at Thursday night's meeting.

More time was spent discussing minutes, by the way, than was spent discussing the baseball stadium and other desired additions to the MCC campus.

Besides the following, I passed out a copy of this article with Steve Stanek's questions. Here's are the questions I passed out.

Some Questions Cal Skinner Would like Economic Research Associates to Answer

I'd certainly like to see the costs and benefits--financial ones, not ethereal "quality of life" benefits--quantified and specified for the educational component of the project and the entertainment side. I'd like to know if my rough calculations showing that the construction cost to be 38.5% of the total for the baseball stadium, while its revenues are only 36% are correct or not. In other words, will the taxpayers be subsidizing the baseball stadium or vice versa. What are the estimated numbers?

I'd like to know if the extra cost of the taxable bonds for the baseball stadium (because it is a for-profit addition) has been added to the stadium side of the cost-benefit study.

I'd like to know if cost of paying interest on interest because of the predicted delayed payback of significant money from the baseball stadium is included on the stadium side of the ledger.

I'd like to know if the opportunity cost of the use of the acreage that cannot be used for educational purposes has been calculated and added to the stadium side of the cost estimate. The estimated value, according to MCC Board President George Lowe was $300,000 per acre, unless I misinterpreted what he said.

I'd like to know if the risk that tuition will have to rise or other expenses cut or a request made for a tax hike to bail out the project can be quantified and, if so, what that risk is and the estimate amount tuition would have to be increased at various levels of shortfall in stadium revenue.

I'd like to know if attendance figures have been cut because of the announced privately- financed minor league baseball stadium in Harvard (seen above with windmills).

I’d like a quantification of the risk to baseball team investors compared to the risk to MCC and its taxpayers/employees/students.

In addition, I distributed the following, sent in by a friend of the blog who prefers to remain anonymous:

“ERA wants to know what we want them to do in their 3d party review.” When I read that, I wondered “about what?” How can ERA do any more at this point in time unless the feasibility study is revised. Otherwise they are just reviewing the same information all over again. Are they asking if MCC wants them to change their report? Does MCC have a revised feasibility study for Plan B already put together for ERA to review? Get your FOIA forms ready Ladies and Gentlemen. If three or four people can generate 150 FOIA’s in a couple months, think how many FOIA’s five or six of us can generate. Or ten of us –just imagine.

Here are some things that jump out at me just in the ERA Review. I haven’t begun to crack the actual studies:

ERA clearly notes that MCC needs to verify expenses, attendance, capacity for non-team events, health-wellness center attendance projections, financing, parking conflicts, and much more. How can ERA then state that it’s a good business plan after noting that there is so much information missing?

How can birthday parties account for $70k in revenues?

How can $2.5 – $3 ml in start-up costs not be included in the financial summary?

Note that the capture rate would be the most aggressive rate of all Frontier League teams. How realistic and what is this based on?

This one really is great. ERA: “It is not traditional to attempt to lock in the team to a definite term. Typically teams are able to leverage their position and move at will.” This is a reference to the 20-year team in the license/lease hybrid agreement. Would this lock in be enforceable if they decided to just move? MCC could sue on basis of the agreement. And get what? And how useful would it be to keep them if they are losing money anyway? We’ve known all along they can walk when they want to.

What is supposed to be on page 12?

Interesting note about the restaurant. This is the first I have heard about one being included. Is a restaurant included? Note all the restaurants listed in the comps on page 13.

And finally, the notation “will be amended” on the pages by hand. I know why it’s there because it is part of the agreement to release it. It is so we all realize that it is a flawed report, please don’t take it seriously, it will be fixed. I can’t wait to see the fixed report. I’ll start getting my FOIA ready.

Labels: Baseball Stadium, Cal Skinner, Economics Research Associates, ERA, MCC, McHenry County College, Steve Stanek

Doing some filing this past weekend, I found McHenry County College President Walt Packard's October 25, 2007 “Information Report” entitled,

The project would require a reported 38 acres, I have been told.

= = = = =
MCC President Walt Packard is seen in the top picture and the middle one. Behind Packard in the second photo is MCC Board President George Lowe. Economics Research Associates David Stone in the bottom shot.

Labels: Baseball Stadium, David Stone, Economics Research Associates, Equity One, EquityOne, ERA, Mark Houser, MCC, McHenry County College, Walt Packard

Economics Research Associates staffers Richard Starr and David Stone sent a February 26, 2008, introductory letter to McHenry County College President Walt Packard.

It asserts they will expound on the “reasonableness and achievability” in something they allege is a 3rd party analysis of the baseball stadium and Health, Wellness and Athletic Center proposal.

However, the ERA analysts admit no market analysis exists to show that using characteristics of Camden, New Jersey, and Fargo, North Dakota, baseball stadiums are even a tiny bit reasonable.

Remember geometry?

Accept the assumption, even if they are false assumptions, and everything flows from them.

With the wrong premises, logic will lead to incorrect conclusions.

It happened in city X, in city Y, so it could happen in Crystal Lake.


And when the bonds can't be repaid, the board members will say,


In ERA's initial 3rd party review, the authors talked about projected attendance in terms of “capture rate.”

On page 9 of the first review, it says ERA recommends further verification of the projected 52.3% capture rate.

I can't even find the term in the second report.

So what is a “capture rate?”

If the population of the market area is 300,000, a 50% capture rate would mean than annual attendance is estimated to be 150,000.

The first report

“..assumes the team will achieve capture rates comparable to the highest captures in the Frontier and Northern Leagues.”

There is no reference to “capture rate” in the second report, but it is still a relevant concept.

The first report puts it in terms of the market place, but the second ignores the market.

Five teams in Chicago market have capture rates ranging from 5.9% to 52.6%, according to page 9 of the first report.

When you take the market out, use of the terms “reasonable and achievable” in nonsensical. Just because it is reasonable and achievable somewhere else doesn't mean it will happen in Crystal Lake.

In ballpark feasibility studies, all revenue streams flow from attendance.

ERA looks at other teams, but, as ERA points out, “It is not known if the other teams' reported figures represent paid or actual attendance.”

Remember, it is common practice for teams to give away tickets as promotional items.

So, ERA is reporting unaudited numbers. No one, except maybe the investors, look at gate receipts.

Take ERA's minor league attendance figures with a grain of salt, maybe piles of salt the size that should have been stockpiled for this winter.

Likewise, ERA's comments on audience attendance growth from year to year need to be closely examined.

In the last paragraph on page 6, ERA states,

“The assumed 30 percent attendance growth over the first five years...is fairly aggressive, but achievable, particularly considering the relatively low projected attendance rate for 2009.”

What team has achieved that attendance growth rate without expanding its stadium?

River City's Rascals, located in suburban St. Louis on the Missouri side of the river, had a stadium built specifically for the Frontier League team. It has been around the longest.

River City's average daily attendance in the first year (1999) was 3,611. In 2007, the comparable figure was, 2,095. (The 2007 figure is right in the table on page 5.)

That's a 42% decrease.

So, where's the growth found?

How does this fit into the “reasonableness and achievability” predicted by Economics Research Associates?

It doesn't.

It isn't even mentioned.

Let's examine three of the Frontier League teams that ERA considers comparables. Look at the attendance figures for 2005, 2006 and 2007 on page 5.

Not one team cited in the ERA report is shown growing at the rate projected by MCC baseball promoter Pete Heitman.

It's not even close. No wonder the table isn't lined up so one can easily figure that out.

Here are daily attendance figures for 2005, 2006 and 2007 for three of the teams listed.

Suburban St. Louis Gateway Grizzles went from

3,619 to
4,235, then decreased to
4,086.

In Washington, PA, Wild Things attendance for the three years were essentially flat:

3,197
3,251
3,317

Suburban St. Louis River City Rascals:

2,379
2,387
2,095

Obviously none increased 5% a year over the two-year period.

How about Rockford?

That's close by.

You should know that a new stadium for Rockford was financed completely with private money, opening in 2006.

One would assume that the incentive not to lose money (or make money) would be stronger for entrepreneurs than for elected officials. Elected officials, of course, can keep coming back to the taxpayers to get non-referendum taxes; investors can't...or maybe they can, if they are Pete Heitman.

Average daily attendance that first year in the new stadium was 2,463, higher than 2,065, an increase of 398 per game.

The stadium cost $7 million. It cost $17,588 to garner each new fan (on a daily basis).

The second year in the new stadium, attendance did not go up much—twelve fans per game.

In any event, that's not support for an increase of 5% per year by Heitman...

Let alone EquityOne's Mark Houser's forecast a 10% increase in attendance during its second year. (See page 5.)

At least Rockford's new stadium was financed completely with private money.

They weren't using other people's money, like the MCC team.

No wonder ERA didn't emphasize Rockford's problem.

There is no example of any team anywhere (unless major, major capital improvements have been put in) that has the attendance growth and, therefore, the revenue growth as sustainable as the promoters' plan suggests.

Taxpayers have a 20-year repayment obligation, so why do the ERA consultants concentrate on the first five years' performance, which history shows are a team's best years?

Why has ERA ignored the next 15 years?

ERA does conclude,

“...we would not expect for this to continue indefinitely, as attendance would stabilize and potentially decrease (after the five-year projection period). This would directly affect the growth of team and facility revenues” (see top of page 7).

Heitman has attendance increases every year for 25 years, a minimum of 5% per year.

ERA hints that a 5% attendance increase is unrealistic--even as soon as the 6th year--but refuses to point out how this will negatively affect the ability to repay the bonds...which it will.

In fact, ERA doesn't address anything beyond fifth year as far as financing goes, other than to say that attendance might decrease (see top of page 7).

Internet fantasy baseball would cheaper and probably as much fun.

More tomorrow and the days to follow.
= = = = =
Senior Economics Research Associates staffer Richard Starr appears on top. Below is associate David Stone.

Below, baseball promoter Pete Heitman appears above his buddy Mark Houser in the pictures in this article.

Labels: Baseball Stadium, David Stone, Economics Research Associates, Equity One, EquityOne, ERA, Fantasy Baseball, Mark Houser, MCC, McHenry County College, Pete Heitman, Richard Starr, Walt Packard

“If you fund it, they will come,” is the first sentence in the article that popped up from a search engine yesterday entitled,


Naturally, the McHenry County College Board’s 4-vote majority’s insistence in subsidizing baseball promoter Pete Heitman’s minor league baseball scheme to make money for investors, which he refuses to identify, led me to read the story by John Estus.

The article in NewsOK, the internet version of the Oklahomian, has more links than I have ever seen in a newspaper web site story.

But the Oklahoma City Council is being straightforward.

It is asking for a 15-month sales tax hike to raise the $121 million for stadium improvements to lure the Seattle SuperSopnics southeast.

Nothing like the non-referendum bonds that the MCC board passed 7-0 without any voluntary public notice before three members--Scott Summers, Donna Kurtz and Frances Glosson--saw the light.

"That's really a step the public and the people should be happy about. The power is in their hands. In a lot of places, they would be able to railroad it through without having some sort referendum where the public actually would get to vote,”

CNBC sports business reporter Darren Rovell told the Oklahomian.

In an indirect quote he also noted that voiding a public vote often happens in cities where opposition is expected.

The Oklahomian points out that supporters of the plan point to intangible benefits that a sports team brings an area.

Sounds like the pitch Economic Research Associates' pitchman Richard Starr made to the MCC board after the Crystal Lake City Planning and Zoning Board and the City Council turned thumbs down.

Rovell points out the opponents’ rebuttal to such non-quantifiable benefits:

”…the only reason why the proponents put out these intangible statements like this is because they have to find some way to fill up the gap where the math doesn't make sense.”

The article looks at how the Dallas Cowboys couldn’t get what they wanted in Dallas, but succeeded in gaining voter approval for $75 million less in suburban Arlington.

It also tells how Memphis built a basketball stadium with revenue bonds to be paid back by ticket holders.

A similar financing scheme is being touted by the MCC board majority.

= = = = =
In front of the vending machine at McHenry County College is minor league baseball team promoter Pete Heitman. Economics Research Associates spokesman Richard Starr points to the MCC mission statement etched in glass in the MCC board room.

Labels: Baseball Stadium, Dallas Cowboys, Donna Kurtz, Economics Research Associates, ERA, Frances Glosson, MCC, McHenry County College, Pete Heitman, Richard Starr, Scott Summers

In the category of “If a tree falls in the forest and no one hears it, did it make a noise?” comes last Thursday night’s McHenry County College Board meeting motion to declare the baseball stadium proposal dead.

Then again, the Northwest Herald didn’t report on the devastating 3rd party analysis of the baseball promoter’s predicted revenues and expenses and I know that exists, even though McHenry County Blog is the only source that wrote a story.

Declaring the contract with the baseball promoter a nullity may not have been exactly Scott Summers’ motion, but that was its goal.

Summers pointed out that since Crystal Lake re-zoning approval for the Health, Wellness and Athletic Complex (or baseball stadium, as I have referred to its most prominent part) was one of the terms of the contract with baseball promoter Pete Heitman had failed that the contract does not exist and the board should declare it a dead. Fellow censured board member Donna Kurtz seconded the motion.

Summers argued that purchase of the 57 adjacent acres between the current college property and the train tracks should be considered on its own merits.

In any event, three MCC board members—Summers, Donna Kurtz and Frances Glosson—voted together. McHenry County Blog first noticed the position switch on November 15th.

Newly elected MCC Board President George Lowe, Barbara Walters, Carol Larson and Mary Miller outvoted them.

But, there were fireworks, expression of anger, hostility and, as one observer put it, “denial” during the discussion.

Kurtz and Glosson argued for an objective 3rd party review of Heitman’s financial projections.

Lowe suggested (maybe that is too mild a word because another source said at one point Lowe “shouted” at one of the baseball stadium dissenters) that Kurtz should have read her board packet (about the baseball stadium) the first time.

Crystal Lake CPA Miller argued that the board did a good job, looking at the buildings, as well as the numbers.

Summers pointed out that those who stand to make money on the project could not be expected to be objective.

Larson explained that she did not see any conflict, that this was a public-private partnership in which the goal was to make money.

Kurtz’ retort pointed out that it wasn’t much of a partnership, with the private investors putting up $25,000 and the college the rest of the rest of the required $25 or more million.

My sources tell me that President Walt Packard tried to interpret the appearance of the Economics Research Associates as proposing to do a more "thorough" analysis.

That is, as I have reported in a fair amount of detail, not an accurate representation of what ERA’s presentation was about.

ERA was there pitching an entirely different role, telling college board members that it could put together a partnership to get the project off and running.

ERA's Richard Starr made a sales pitch to make the baseball stadium happen, plain and simple.

Erv LeCoque’s report of the withdrawal of a $1 million scholarship pledge was disputed by President Packard.

= = = = =
None of the pictures were taken at the meeting. The article is based on notes from two observers. Scott Summers is on the upper left with Pete Heitman on the upper left. A map of the Gilger property is below Heitman's head shot. George Lowe is below Summers and Mary Miller is under Heitman. Carol Larson is on the left below those two. Donna Kurtz is on the right. Economics Research Associates spokesman Richard Starr is beneath Larson. Walt Packard is on the bottom right.

Labels: Baseball Stadium, Carol Larson, Donna Kurtz, Economics Research Associates, ERA, George Lowe, Mary Miller, MCC, McHenry County College, Pete Heitman, Richard Starr, Scott Summers, Walt Packard

Since the McHenry County College Board minutes bear little if any relationship to what I say to the board, here's what I passed out and summarized at Thursday night's meeting.

More time was spent discussing minutes, by the way, than was spent discussing the baseball stadium and other desired additions to the MCC campus.

Besides the following, I passed out a copy of this article with Steve Stanek's questions. Here's are the questions I passed out.

Some Questions Cal Skinner Would like Economic Research Associates to Answer

I'd certainly like to see the costs and benefits--financial ones, not ethereal "quality of life" benefits--quantified and specified for the educational component of the project and the entertainment side. I'd like to know if my rough calculations showing that the construction cost to be 38.5% of the total for the baseball stadium, while its revenues are only 36% are correct or not. In other words, will the taxpayers be subsidizing the baseball stadium or vice versa. What are the estimated numbers?

I'd like to know if the extra cost of the taxable bonds for the baseball stadium (because it is a for-profit addition) has been added to the stadium side of the cost-benefit study.

I'd like to know if cost of paying interest on interest because of the predicted delayed payback of significant money from the baseball stadium is included on the stadium side of the ledger.

I'd like to know if the opportunity cost of the use of the acreage that cannot be used for educational purposes has been calculated and added to the stadium side of the cost estimate. The estimated value, according to MCC Board President George Lowe was $300,000 per acre, unless I misinterpreted what he said.

I'd like to know if the risk that tuition will have to rise or other expenses cut or a request made for a tax hike to bail out the project can be quantified and, if so, what that risk is and the estimate amount tuition would have to be increased at various levels of shortfall in stadium revenue.

I'd like to know if attendance figures have been cut because of the announced privately- financed minor league baseball stadium in Harvard (seen above with windmills).

I’d like a quantification of the risk to baseball team investors compared to the risk to MCC and its taxpayers/employees/students.

In addition, I distributed the following, sent in by a friend of the blog who prefers to remain anonymous:

“ERA wants to know what we want them to do in their 3d party review.” When I read that, I wondered “about what?” How can ERA do any more at this point in time unless the feasibility study is revised. Otherwise they are just reviewing the same information all over again. Are they asking if MCC wants them to change their report? Does MCC have a revised feasibility study for Plan B already put together for ERA to review? Get your FOIA forms ready Ladies and Gentlemen. If three or four people can generate 150 FOIA’s in a couple months, think how many FOIA’s five or six of us can generate. Or ten of us –just imagine.

Here are some things that jump out at me just in the ERA Review. I haven’t begun to crack the actual studies:

ERA clearly notes that MCC needs to verify expenses, attendance, capacity for non-team events, health-wellness center attendance projections, financing, parking conflicts, and much more. How can ERA then state that it’s a good business plan after noting that there is so much information missing?

How can birthday parties account for $70k in revenues?

How can $2.5 – $3 ml in start-up costs not be included in the financial summary?

Note that the capture rate would be the most aggressive rate of all Frontier League teams. How realistic and what is this based on?

This one really is great. ERA: “It is not traditional to attempt to lock in the team to a definite term. Typically teams are able to leverage their position and move at will.” This is a reference to the 20-year team in the license/lease hybrid agreement. Would this lock in be enforceable if they decided to just move? MCC could sue on basis of the agreement. And get what? And how useful would it be to keep them if they are losing money anyway? We’ve known all along they can walk when they want to.

What is supposed to be on page 12?

Interesting note about the restaurant. This is the first I have heard about one being included. Is a restaurant included? Note all the restaurants listed in the comps on page 13.

And finally, the notation “will be amended” on the pages by hand. I know why it’s there because it is part of the agreement to release it. It is so we all realize that it is a flawed report, please don’t take it seriously, it will be fixed. I can’t wait to see the fixed report. I’ll start getting my FOIA ready.

Labels: Baseball Stadium, Cal Skinner, Economics Research Associates, ERA, MCC, McHenry County College, Steve Stanek

Guess I was wrong as to why Richard Starr and David Stone of Economic Research Associates came to the McHenry County College Board meeting.

Starr said he had been invited by MCC President Walt Packard.

Since ERA did the devastating analysis of Mark Houser’s Equity One’s feasibility study of the baseball stadium, I figured the board majority was going to ask for a re-do.

You know, something that would make it look like a baseball stadium could pay for itself.

But, no.

The presentation by Starr was more a sales pitch on how ERA could gather partners together and make the stadium work. Partners like the real estate industry, the hospitals, the county, a city, etc.

“You have a complicated situation here because you’re on your own,” Starr said.

Then he quoted one of the senior members of the firm:

”Whoever benefits pays.
“Whoever pays benefits.”

He said ERA tries to merge interests to see “how can all (the players) benefit.

“You have a great market and there should be a lot of people interested in making it a better place to live…We do market research.”

But Starr still wanted to include not just the hard financial benefits of the project, but the unquantifiable “quality of life” benefits.

“How can (a community) be more competitive?” he asked, pointing to “sports facilities” as something that could cause a community to stand out from its neighbors and cause “someone to move there.”

So, I’d have to conclude that Starr and associate David Stone were in salesman mode, not analyst mode.

They seemed to be pitching for the job that EquityOne got. McHenry County College has committed to paying Houser’s firm $470,000 and untold amounts to the two firms he selected—Cornerstone Architects and FCL Builders.

And, the firm of Economic Research Associates is probably a good deal more qualified for putting together something that would work than Equity One.

It’s founding principals created the “world’s biggest carnival” for Walt Disney and have planned all of the other Disney theme parks.

Just to give you an idea of what ERA might bring to the table, Starr suggested out in the hall to reporters that apartments could be built along the edges of the ball field. They would make great seats for the few nights a year when games were played and, if a nightclub were nearby, they would be attractive to young singles.

Starr echoed the enthusiasm Crystal Lake Mayor Aaron Shepley had for the townhouses in the Barton Stream subdivision annexed across Route 14 from MCC. Shepley thought they would appeal to students.

Starr just put a more interesting twist on it.

Maybe Huntley can incorporate that idea into its plan for a baseball stadium.

Or maybe Barton Stream’s developer will change his plan to include a baseball stadium.

I still think any stadium should be put in a mined out gravel pit.

ERA’s Stone did mention “3rd party analysis. We are good at making interesting things boring…The bottom line for us is generally the bottom line.”

= = = = =
All the photos but the one on the bottom right are of Richard Starr of Economics Research Associates. On the bottom right is ERA's David Stone.

Labels: David Stone, Economics Research Associates, Equity One, EquityOne, ERA, Mark Houser, Richard Starr

I forgot McHenry County College was having a meeting on Monday.

A friend of McHenry County Blog attended and sent these notes:

It pays to stay to the bitter end of the performance.

You and Emily might have been entertained by Robbins, Schwartz et al. Howard Metz and Joseph Perkowski took the Board of Trustees through "What To Do When You Receive a FOIA Request."

[The two people would be Jane Collins seen below to the left of Sandy Kerrick and Marlene Kopola, plus yours truly.]

You would never have guessed that the reason they were invited to speak is that the Board had received dozens of requests when it tried to keep information from the public, except that Donna Kurtz [quoting Marlene] made that observation about how they had gone from no requests to over 150.

The attorneys' approach:

Freedom of Information Act is all about Competing Interests -- forget reading or citing the purpose of the Act, [tucked into the last pages of the handout].

Sandra Kerrick tried to talk about all the requests coming from only 2 people, but no one listened.

Also some Open Meeting discussion -- how, if 3 Bd. members met to discuss business -- even by Internet -- it would violate Open Meetings Act.

Barbara Walters: What if 3 of us met in FL, we wouldn't violate the law, would we?

Howard Metz: Well, it's pretty hard to notice up a meeting for your constituents in FL -- you can violate the Open Meetings in any state.

Scott Summers, at the end, stated that it is his understanding that any Health Wellness Athletic Center (HWAC, a.k.a the baseball stadium) plan is "now mooted," April action no longer holds.

George Lowe: We're going to talk about HWAC on Thus.

Sandra Kerrick: HWAC is not on Thursday agenda.

George Lowe: No, but ERA (Economic Research Associates) will make a presentation.

Donna Kurtz: Shouldn't that be on the agenda?

MCC President Walt Packard: It [ERA] was pulled from tonight's agenda; we changed it to Thursday. ERA wants to know what we want them to do in their 3d party review. (emphasis added) If you have not read the extremely negative summary of what this outside consultant wrote, please click here and do so. This was presented in April and the board members still proceeded.

Donna Kurtz: But we haven't decided what we want -- how can we ask them to review something we may or may not do?

George Lowe: It doesn't matter -- we should hear from a number of people [did not catch the end, but in my words: we should hear from a number of people, then maybe we'll know what to do!].

No action is being taken.

If Board Attorney Sandra Kerrick had not asked, HWAC would have been on the agenda -- without public notice, once again!@!

So, if you have desires from third party reviewed Economic Research Associates, come early to the meeting and tell the trustees during the public comment period. ERA's Richard Starr is early on the agenda. The starting time is 7 PM. (There are actually two meetings, so you could speak twice, if you have more than the three minutes worth of time allotted to say.)

I'd certainly like to see the costs and benefits--financial ones, not ethereal "quality of life" benefits--quantified and specified for the educational component of the project and the entertainment side. I'd like to know if my rough calculations showing that the construction cost to be 38.5% of the total for the baseball stadium, while its revenues are only 36% are correct or not. In other words, will the taxpayers be subsidizing the baseball stadium or--if the stars are all aligned as baseball promoter?

I'd like to know if the extra cost of the taxable bonds for the baseball stadium, because it is not a non-profit addition, have been added to the cost-benefit study.

I'd like to know if cost of paying interest on interest because of the predicted delayed payback of significant money from the baseball stadium is included on the stadium side of the ledger.

I'd like to know if the opportunity cost of the use of the acreage that cannot be used for educational purposes has been calculated and added to the stadium's cost.

I'd like to know if the risk that tuition will have to increase to bail out the project can be quantified and, if so, what that risk is.

I'd like to know if attendance figures have been cut because of the announced privately- financed minor league baseball stadium in Harvard, the one you see a drawing of with windmills.

And, those are my questions after only five minutes of thought.

Can you come up with others?

= = = = =
Obviously, all of these photographs were taken previously. Jane Collins, Sandy Kerrick, Marlene Kopola are in the top photo. In descending order, the rest are MCC Board members Barbara Walters, Scott Summers, George Lowe and Donna Kurtz. The head shot on the bottom left is McHenry County College President Walt Packard.

Labels: Barbara Walters, Baseball Stadium, Donna Kurtz, Economics Research Associates, ERA, George Lowe, Howrd Metz, MCC, McHenry County College, Sandy Kerrick

A 13-page evaluation of Mark Houser’s Equity One’s feasibility study of his buddy Pete Heitman's baseball stadium projections and other expansions of McHenry County College has been released.

It’s dated April 4, 2007.

I didn't even know it existed, but, after reading the very pessimistic summary comments, I can see why MCC officials kept it hidden.

Take a look at the Economics Research Associates’ report and send McHenry County Blog your comments.

Blogger is again giving me big trouble loading images, so let me type the summary comments:

Under “HWAC:”

“1. Our experience is that these facilities and programs usually have a difficult time generating positive cash flow and as a result are often public projects. Your upscale suburban market is probably the most feasible location to have a profitable program.” (emphasis added)

My comment: If that’s the most positive statement these consultants can come up with concerning the HWAC, there are real questions about more than the baseball stadium.

”2. There is very limited market analysis included in this (EquityOne’s) feasibility report. Information about existing competition, offerings, activity, fees, etc. would obviously help confirm the revenue projections.”

My comment: And Houser’s feasibility study was done before the possibility of a privately-financed minor league baseball park in Harvard was revealed by McHenry County Blog. If it opens, attendance would surely be cut in Crystal Lake.

Under “Minor League Baseball:”

“3. Again, most of ERA’s baseball market analysis / feasibility assignments have been for public clients since the programs generally do not generate enough revenues to cover their development and operating costs. The public sector gets involved using their borrowing power and justifies the project costs because of its economic and community benefits (i.e., quality of life, increased property values, new visitors to the area, community image, etc.)” (emphasis added)

My comment: If that’s the most positive statement these consultants can come up with, the baseball stadium should be Dead On Arrival (DOA, for those of you into acronyms).

“4. Our assessment reveals several areas where more clarification would be helpful including the need for budgeting the eventual facilities improvements and upgrades, further clarification on non-team activity and the indicated commitment from the League.” (emphasis added)

My comment: So, there are more improvements to come. I wonder if they will be as outrageously expensive as the ones down in Kane County. Bids just came in for such improvements and upgrades costing more than MCC’s initial baseball stadium will cost. There is no indication whatsoever that the Frontier League is providing any money to finance the stadium. The flow of money is in the other direction. Information I have received is that the league requires a $300,000 payment as sort of a franchise fee.

Having found no good news in the proposal except for the minor league baseball team’s being subsidized by the public, ERA adds these more positive comments:

“ERA also notes that in addition to your positive and growing market, the proposed programs have several additional potential assets:

“The combined programs maximize opportunities for financial benefits (i.e. college use, shared parking and infrastructure, possible sharing of staff, services, purchases, marketing, etc.)”

My comment: I hope MCC didn’t spend a lot of my money on this extremely vague wish fulfillment list.

“Two attractions that draw year round visitors are potential locations for a quality (revenue generating) restaurant or other development.”

My comment: There has been no proposal of a restaurant by MCC. Additionally, the best location for a restaurant is on Route 14 north of Tartan Drive. That land is not owned by MCC and there is no reason that the college would benefit financially.

“As mentioned earlier, the two programs will positively impact the local quality of life and economy and a case could be made for public support.(i.e. infrastructure, services, funding, etc.)”

My comment: Since this a duplicative evidence that the project will not pay its own way, why would a consulting firm even include it? It supports the opposition’s argument that this baseball stadium will most likely not pay its own way and have to be subsidized by the public. Consultants are usually paid to bring in the answer that the people who hire them desire.

My conclusion: This negative prognostication by consultant ERA should have led the MCC board to say “No thanks" to the baseball stadium proposal last spring.

The MCC Board meets at its Crystal Lake campus at 6 Tuesday evening.

Labels: Baseball Stadium, Economics Research Associates, ERA, Frontier Baseball League, Mark Houser, MCC, McHenry County College, Pete Heitman

Elise Bouc, a Republican precinct committeeman from Lake County, read McHenry County State Senator Pam Althoff's reply to an Equal Rights Amendment opponent and offers these rebuttals to the McHenry legislator's views.

If you have not read Senator Althoff’s reply to an ERA opponent, it probably would be well to do so before reading this refutation, so you can more fully understand the two positions.

The ERA Rebuttal

First, in regards to the legalization of same-sex marriages, several court decisions clearly verify that the Equal Rights Amendment (ERA) mandates recognition of same-sex marriages.

The Hawaii Supreme Court ruled that the denial of marriage licenses to same-sex couples is sex discrimination and unconstitutional under Hawaii’s state ERA (Baehr v. Lewin, 852 P.2d 44, 1993). The people of Hawaii had to pass a state constitutional amendment to overturn this decision. Recently Maryland’s marriage law was overturned due to their state ERA. The case is currently under appeal. Furthermore, at least one of the Massachusetts Supreme Court Justices used the ERA in the Massachusetts Constitution as the basis of the decision to overturn the Massachusetts marriage law.

Second, in regards to the military, current U.S. Supreme Court Justice Ruth Bader Ginsburg states in her book, Sex Bias and the U.S. Code, that the ERA would require women to be drafted equally with men (p. 202, 218), and women could not be exempted from combat (p. 26 and p. 218).

Third, in regards to the Social Security benefit for wives, Justice Ginsburg wrote that the wife’s social security benefit is a form of “sex stereotyping” that must be eliminated under an ERA (p. 211-212). These claims are independent of the current gender neutral language used in