As I read/heard about the city of Springfield’s potential purchase of the Fieldhouse Sportscenter, several questions came to mind. First, please understand that I generally believe that if demand exists for a product or service, the private sector will meet that need. Capital flows to investments that generate positive returns. With that in mind:
- Why is the city determined to spend $7.5 million of taxpayer money to acquire a private business? Presumably because: There’s an economic benefit to the city and therefore to its citizens and the alternative would create a material negative impact to the local economy and citizens. The city benefits economically from all successful benefits located in its tax district, including those that drive traffic into the city such as Bass Pro, Costco, the Cardinals stadium, BigShots Golf, etc. Does the city intend to eventually invest in those businesses? That’s intentionally sarcastic as clearly that’s not the plan. So, where does the city draw the line? Let the private sector make those investments. This isn’t a park. It’s a business that generates revenue and presumably positive cash flow by selling court time and concessions.
- Has the city hired a consultant to study competitive venues and the advantages Springfield would offer over those competing venues and markets? The city has stated that this purchase will drive national tournaments and bring hospitality revenue. If the plan is to compete for national tournaments, then the city is competing against arguably every city in the U.S. that has a field house and hotels. I can’t help but think back to the investment in the convention center, which was expected to drive meaningful convention and hospitality revenue, even though Springfield is not a typical “convention” market. How has that turned out?
- Is the city required to provide financial statements for a business that it intends to acquire? If so, it would be helpful to understand the financial details that support the business valuation. Related to that, did the city hire an independent valuation consultant to provide an expert valuation analysis? If so, has it produced that analysis? If not, why not? The city should be extremely transparent when acquiring a private business. It’s a slippery slope.
- What happens to the Fieldhouse if the city declines to buy it? I suspect another buyer will acquire it and continue to operate it as is. It is hard to imagine one paying $7.5 million (or potentially much more as the city’s statement about a discount would suggest) only to raze the building and erect something else in its place. That site consists of a little more than 8 acres. By comparison, there is a 42-acre site on South Campbell north of the James River for sale for $3.9 million. But, if the highest-valued and best use of that property is not a sports complex, that means there’s insufficient economic value to justify the purchase price as a going concern.
- If City Council determines that the city must invest in this sector, how much money would be required to purchase land or use existing city property and construct something similar? Have these options been researched in earnest? If not, how can the stewards of our taxes be allowed to make such a decision? If so, please report those findings, and interview the Realtors, construction contractors, etc., that the city relied upon.
- Bob Belote told City Council that the Fieldhouse is one of the nicest indoor gyms in the Midwest. First, that’s irrelevant when it comes to determining who should own the business going forward. Second, that’s a subjective statement; on what basis was it made? The new facility that just opened in Mount Vernon is larger and offers more court space. Another recently opened in Strafford that’s 75% the size of the Fieldhouse. Those are two new, privately owned facilities within very close distance of Springfield. Now, open up the geography of the “entire Midwest.” … I question that statement’s relevance to City Council’s decision.
- What alternative uses for $7.5 million can the city find? I urge City Council members to drive around Springfield and try to see it through the eyes of a visitor. We have seemingly endless amounts of trash littering our highways and roads, crumbling curbs and sidewalks, abandoned and neglected homes, weeds growing in concrete medians, homeless tents and campers adjacent to East Kearney (and perhaps elsewhere), an unattractive route into downtown on East Trafficway. In addition, we experience crime rates much higher than the national average and those statistics are deteriorating. We know of the need to repair/daylight streambeds ... it seems there are a myriad ways this money could be better deployed into the community.
Again, the private sector exists to fill an economic need in a particular sector or market. The public sector exists to support the needs of a community that cannot be reasonably provided by private business. In other words: police, fire, justice department, public education, libraries, roads, trails, community health, etc. I don’t see a for-profit Fieldhouse on that list.
—Michael Homeyer, Springfield