One man's disagreement with the Richmond (Va.) City Council over decisions regarding a new baseball stadium for the Double-A Richmond Flying Squirrels could deny the project $24 million in funding.
As reported by NBC affiliate WWBT, activist Paul Goldman filed a lawsuit immediately after the city council approved the plan to pay for the stadium's $110 million cost by issuing bonds. Goldman believes it should not be up to the city council to make those decisions. In counties outside of Richmond, voters get to decide. He says there should have been a referendum on the ballot instead, as he believes the money in the project could be better spent on schools.
One man's disagreement with the Richmond (Va.) City Council over decisions regarding a new baseball stadium for the Double-A Richmond Flying Squirrels could deny the project $24 million in funding.
As reported by NBC affiliate WWBT, activist Paul Goldman filed a lawsuit immediately after the city council approved the plan to pay for the stadium's $110 million cost by issuing bonds. Goldman believes it should not be up to the city council to make those decisions. In counties outside of Richmond, voters get to decide. He says there should have been a referendum on the ballot instead, as he believes the money in the project could be better spent on schools.
A law expiring July 1 says localities can use revenue made at projects, such as a stadium, to pay for it. If the city filed those bonds before July 1, it could get an additional $24 million to help cover the project's construction within the Diamond District.
The dilemma is that the city’s chief administrative officer, Lincoln Saunders, says his team cannot file the bonds because Goldman's lawsuit creates a hold-up in getting the money in time.
A judge dismissed the lawsuit May 9, but Goldman has until July 1 to appeal. This date falls on the same day as the city’s deadline to file the bonds to receive the stadium revenue.
“You can’t do a tax exempt deal for a baseball stadium, they know that. If you look at the chart they gave City Council it’s at 4 percent. How come that when they had to issue the bonds just this month, it costs 5.1 percent? That’s a big difference,” Goldman said. “It doesn’t sound like a lot, but when you’re talking over $100 million, 1 percent over 30 years, that’s a lot of money. That’ll fix up a lot of schools, that’ll clean up a lot of mold, and that’s what this fight is all about,”
The city assures residents that the rate that has been discussed with its legal and financial team would be 3.92 percent, which is shown as the ‘true interest rate’ in its bond summary. The city showed those documents to WWBT, according to reporter Madison McNamee.
"Goldman says 5.1 percent comes from the rate for taxable bonds," McNamee reported. "Saunders says that does not apply to this situation."
“We’ve structured it to comply with all IRS regulations regarding private use; we are 100 percent confident that these bonds will be sold as a non-taxable bond,” Saunders said. “We work with our financial advisors and bond counsel. We have projections of what the sale will be, and we’ve clearly known that we’ll be able to do this, and it was a non-taxable bond.”
Per McNamee's reporting:
If the city cannot raise the additional money, Saunders assures people that the stadium’s future is not jeopardized, though it could impact other projects.
“There’ll be less surplus revenue coming back to the general fund that the city can use for roads, sidewalks, community centers, schools,” Saunders said.
The hope is that the Diamond District project will bring in even more money to fund those other projects once it's built. Goldman wants all of the money to go to schools now, but Saunders says they will have more money to do that in the long run.
