IN-DEPTH |
Editor's note: This story, originally posted at 3:01 p.m., was updated at 5:20 p.m. and at 6:20 p.m. with added details and photos from the press conference.
The Springfield Cardinals are staying at Hammons Field, and the city is spending $16 million to buy the ballpark and upgrade it, pending Springfield City Council approval.
On Wednesday, the city announced a proposed deal with the John Q. Hammons Charitable Trust, the current owners of the ballpark built in the early 2000s to lure a minor league team to Springfield. The proposed deal includes $12 million for a package of properties of interest to Cardinals fans — the ballpark, as well as two parking lots that serve Hammons Field. Parking prices in recent years have been controlled by an out-of-town holding company that acquired many Hammons properties after his trust filed for bankruptcy in 2016, and even the Cardinals have publicly complained about fans being gouged by them.
Along with paying $12 million for the properties ($6.5 million for the ballpark and $5.5 million for the parking lots), the city has committed to funding $4 million worth of improvements as part of the deal, and the Cardinals have agreed to extend their lease through 2038 if the proposal is approved, according to a news release prepared for a celebratory joint press conference hosted by the Cardinals in their training facility at Hammons Field.
The city would use unrestricted savings from its general fund and money designated for “economic vitality” from its level property tax fund to make the purchases if the council approves it.
“This is a great day for the city of Springfield,” an emotional Springfield Mayor Ken McClure said at the outset of his press conference remarks. “As mayor, there are very few things that frankly, send my heart soaring. The announcement we are about to make today is certainly one of those.”
After the press conference, McClure said the culmination of the yearslong process to acquire the ballpark brought him to tears.
“The realization hits you that it's done,” he said. “There's still some steps to take. But it's such a community investment, and I always get choked up with that.”
Ever since Hammons, a well-known hotelier and philanthropist, died in 2013 and his estate filed for bankruptcy several years later, it has been inevitable that the Springfield baseball stadium named for him would find a new owner.
Both assets were built atop city-owned land tracts as part of a 2002 deal with Hammons that soon drew the Cardinals to Springfield. But the team has threatened to leave the city in recent years if a stadium owner didn’t invest in facility improvements that Major League Baseball has mandated across the minor leagues.
Hammons Field is now home to both the Cardinals and Missouri State Bears baseball teams. The team’s current lease expires in 2030, but the Cardinals held an option to opt out of the lease as early as January of 2025, which attorneys for the team have said was likely if the ownership situation remained unresolved.
While council members have been briefed on the lengthy negotiations, the deal requires several steps, starting with approval by the city’s Planning and Zoning Commission on Feb. 6, and then introduction of a resolution at the council meeting on Feb. 6. The Council could then give final approval at a special meeting on Feb. 14.
After the City Council vote, the global agreement will need to clear federal bankruptcy court to effectively close the case, and then the city of Springfield will be able to close on the property and deed the land for both the stadium and for the parking lot.
Proposed agreement would end city’s involvement in massive federal bankruptcy case
According to the news release announcing the proposed deal, the agreement would end the city’s yearslong involvement in the Hammons Trust bankruptcy case. The city’s news release says a separate settlement agreement resolves issues between the Cardinals and JD Holdings and owner-investor Jonathan Eilian. In early 2020, the Cardinals sued JD Holdings and three Hammons trustees, claiming a breach of contract due to a lack of stadium improvements. The case remains open, but two Cardinals attorneys filed to withdraw as counsel in January.
The city has been intrinsically tied to Hammons Field ever since it issued taxable bonds in 2002 to lend to Hammons and provided the land under the stadium. Hammons Field sits on two parcels of city land. The one that most of Hammons Field sits atop is owned by the city’s Public Building Corporation, which helps finance city projects. The other parcel, which includes parts of right field, some stadium seating, parking areas and entrance gates, is owned by the city. The ballpark sits across from Jordan Valley Park in an area targeted for revitalization in the 1990s and early 2000s. The original ownership agreement is a unique one in the Texas League, where eight out of 10 stadiums are owned by the home cities where they play.
The city has held onto the stadium deed since its construction, and the plan was for Hammons to pay off the bonds he used to finance stadium construction, and then for the city to sell him the stadium and some of the land beneath it for $1. The city would also enter into a 50-year ground lease with Hammons for the remaining city-owned land under the ballpark. But after Hammons died in 2013 at age 95, the plans changed.
Ultimately, a federal judge ordered the John Q. Hammons Charitable Trust to pay off a $6.1 million bond and exercise a $1 purchase option with the city to buy the stadium and start the lease, and then sell the team. The bond is paid off, and the proposed sale agreement with the city would resolve the rest of the ownership uncertainty around the future of Hammons Field.
Under the proposed agreement, the city is purchasing the trust’s rights to obtain the 50-year ground lease and its right to purchase the stadium and land under the stadium.
The city’s ownership of two parking lots surrounding the stadium, as well as its proposed commitment to fund $4 million in upgrades, address two major issues brought up by the Cardinals in a state lawsuit. The Cardinals had sued JD Holdings, the JQH Trust and its representatives, accusing them in state court records of neglecting their duties to maintain and improve the stadium.
Along with stadium conditions, the parking lot prices, set by the holding company, drew the ire of the team.
The 2021 season began with a press release from the club specifying that the $20 cost of parking next to the stadium — set by JD Holdings and its hospitality wing — was an “outrageous price” intended to gouge fans. (Many have risked parking at the nearby University Plaza, one of the hotels now under JD Holdings ownership. Visitors bureau leaders have said the holding company’s neglect of the hotel and convention center has driven away major events.)
Financial forecast: A rainy day
The proposed $16 million commitment is the latest city investment in the stadium, which was a key element of the Vision 2020 community planning process. Last May, when the Hauxeda examined the uncertain future of Hammons Field, McClure only offered one comment: “It is imperative that the Cardinals remain part of the community.”
To keep the Cardinals downtown, the Springfield City Council will use reserve funds that have built up steadily with sales tax gains in recent years. Springfield’s reserve fund also built from payments in lieu of taxes, called PILOT funds, some entities pay the city. Prior to the adoption of the 2023 budget, Springfield Director of Finance David Holtmann broke down the reserve funding amounts for the Springfield City Council.
“Currently, that rainy day fund is $17.4 million,” Holtmann said. “Because of all of the additional revenue that we have received due to higher sales tax, PILOT revenues and other city revenues that we have received throughout the year, that will grow to about $19.6 million for the upcoming budget. We’ve gone from about an $87 million budget to almost a $100 million budget, as we do, we increase our reserve capacity to make sure we have funds set aside.”
In 2020, Springfield took about 57 percent of its total revenue from sales taxes, a reliance that bond rater Moody's notes in its independent assessment of Springfield's financial well-being and credibility. In the 2023 fiscal year, which started July 1, 2022, sales tax revenue is expected to make up about 60 percent of Springfield's general revenue fund.
From 2020 to 2022, sales tax generation in Springfield climbed from about $47 million per year to $55 million per year, a gain of about 8 percent.
Springfield is also projected to take in $9.98 million in level property taxes by July 2023, and another $10.18 million in level property taxes by July 1, 2024, based off 2-percent adjusted growth estimates. The level property tax revenue is used to fund police, fire and public works projects, but also has an “economic vitality project pool” line item built into its budget sheets. When the City Council adopted the city’s budget for 2023, the projected fund balance by July 1, 2023, was $5.9 million, with $2.19 million set aside as a required reserve fund, and $3.76 million that could be used for projects.
The city uses Moody’s as its independent investment and financial rating agency. Moody’s assigns ratings to government entities based on their ability to borrow money and repay it, assigning an overall rating for creditworthiness. The city of Springfield has an “Aa1” rating from Moody’s, the second-highest rating on the scale.
Cardinals GM: This is second-most important day in franchise history
At the podium during the announcement, Cardinals General Manager Dan Reiter promised he’d join the mayor in crying, and he did. Knowing that the Cardinals will be Hammons Field tenants through his preschool son’s high school graduation was one of several moments that moved him to tears. Reiter, one of four current Cardinals employees who has spent his entire career with the organization, said the team exists for two reasons, to help the St. Louis Cardinals win the World Series, and to make the community better.
The uncertain ownership situation did not prevent the Cardinals from giving away tickets to every Springfield public school child last season, or from hosting the biggest blood drive in minor league history, but it did hamstring staff over the years, Reiter said after the press conference.
“We were absolutely affected by the previous lease in terms of what we could do,” Reiter said. “You know, and no business can go out and do events knowing you're going to lose money. And to be honest, we are looking more at how we can break even but provide entertainment. So I do think on the forefront: Yes, we want to get concerts booked. Yes, we want to end up having more festivals at Hammons Field. Yes, we want more Little League teams coming here and practicing when the bears aren't. The answer is yes, we want to start offering events and activities year round.”
Reiter said that during his tenure as GM, which began in 2017, he and his staff developed a mantra: maximize your controllables. The price of parking was out of team control. Going public and telling Cardinals fans it was “outrageous” to charge $20 to park at a minor league game wasn’t.
“It's a great day for fans,” Reiter said. “And the reason we tried to be transparent was we wanted to make sure fans knew that it was not the Springfield Cardinals controlling those prices. And even now, there's a lot to be worked on between the Cardinals and the city on how it's going to run. But I would say that pricing will be 33 to 50 percent cheaper this year compared to last. And I think for a family that's coming, whether it's one time or 10, that's a really big difference in their experience. And that may be the difference in getting a kid a souvenir or paying more to park. So I think the fact that the city was able to negotiate the parking with the agreement, I think that's a critical piece for our fans.”
As well-wishers came up to shake Reiter’s hand after the event, he took stock of the importance of the day’s announcement.
“I view this as the second-most important day in the history of the Springfield Cardinals,” he said. “I think the day that our franchise was announced, it was a day that meant a lot to a lot of people and took a lot of work. To me, this is the second-most important day in the history of our organization. Being able to have the new landlord and relationship with the city, it's going to open up avenues for this community that people may have not thought possible. And I think it's going to be excited to dream big, to bring new levels of entertainment and, as the mayor said, to make this the people's stadium.”
STORY CONTINUES BELOW:
RELATED COLUMN
Opinion: Springfield's boys of summer changed sports psyche here — what did we do before the Cardinals?
Hammons Field opened in the spring of 2004 as the cornerstone of Jordan Valley Park and the St. Louis Cardinals moved their Double-A team here the next year. More than the physical landscape changed. So did the sports psyche of Springfield.
Hammons co-trustee says all sides agreed on stadium’s future ownership, even through numerous legal battles
Among the speakers on Wednesday was Gregg Groves, a Springfield attorney and a co-trustee with the Hammons Revocable Trust.
“On behalf of the John Q Hammons Revocable Trust, I am thrilled — probably as much as anybody — to be standing here, knowing that the city of Springfield is about to become the owner of Hammons Field and glad to hear that there's going to be a long-term relationship with the Springfield Cardinals and the Cardinals organization,” he said.
There were knowing laughs in the audience as Groves emphasized how thrilled he was. The stadium’s future has been part of multiple prolonged, at times acrimonious legal battles. As recently as a June 2021 hearing in federal court, Nick Zluticky, an attorney representing both the Hammons Revocable Trust and the Charitable Trust, alleged the city and the Cardinals were conspiring to sandbag the stadium sale process in order to let the city buy it for well below market value, which the attorney said would tarnish the Hammons legacy. In federal court in 2018, Zluticky said the trust’s appraised value of the stadium was just under $19.6 million, and the city was trying to force the trust to sell it “at a bargain basement price of $6 million.”
But Groves said on Wednesday that he and co-trustee Jacqueline Dowdy wanted the same goal as the team and city leaders he shared a stage with on Wednesday. Dowdy was not there and had a prior engagement, Groves said.
At one point Groves sat one seat away from the GM of the Cardinals. The sides are technically still on opposite ends of a civil suit filed in Greene County Circuit Court. The deal, if it is approved by the city council, will end that.
“Those will go away,” Groves said afterward. “And we all have the same goal. It was just how to get there. So when you have people wanting the same goal … you find a way to accomplish that goal, and that's what happened here.”
During his remarks, Groves said the movement toward a deal with the city started about five years ago with a passing conversation outside a courtroom with City Councilman and attorney Craig Hosmer. The conversation grew to include the mayor, attorneys, Missouri State officials and numerous other players, he said.
“The day would not have happened had he not been very much involved,” McClure said of Groves after the press conference. “Very pleased that he was here.”
In court filings, attorneys for the charitable trust have said money from the stadium sale will go toward preserving Hammons legacy through charitable endeavors. Groves said the specifics aren’t finalized.
“It'll go to the John Q. Hammons Foundation, and those decisions have not been made yet and will not be made until after everything is approved,” he said. “But those proceeds will help.”
Terms of lease allow birds to name their nest
According to a press release from the city of Springfield, there are no immediate plans to rename Hammons Field, but the Springfield Cardinals do hold the right to market and sell the naming rights to the stadium to a potential sponsor under the terms of the new lease. Any proceeds would go to a new capital improvement fund for the stadium.
The lease agreement between the city of Springfield and the Springfield Cardinals calls for the Cards’ rent money to be split into two pots: operating funds and capital improvement funds. The Cardinals will pay $650,000 per year for 15 years to lease the stadium. The team paid $500,000 a year to lease the stadium, according to a copy of the original lease filed in court records. The team also agreed to pay $1 per ticket price to the owners up to 200,000 in ticket sales.
The Cardinals are scheduled to play 69 home games in 2023.
The agreement spells out that the city of Springfield will set up a $4 million capital improvement fund for some immediate work to bring Hammons Field into compliance with Major League Baseball’s guidelines for minor league stadiums. There will be new lights for the field, facilities to accommodate female staff members, and improvements to the visitors’ clubhouse dining area.
The Cardinals have an incentive to keep their operating costs low. Operating costs are spent on what the stadium needs to run day-to-day. Reiter gave the example of the material used to condition the grass on the baseball field. At the end of every year, any surplus operating revenue the Cardinals have in their budget can be directed toward stadium improvement projects.
“We are motivated to keep expenses low so we can keep improving,” Reiter said. “We want to make sure there is a plan for 15 years of improvement, and I’ll tell you we have big dreams.”
The Missouri State Bears also will continue to rent Hammons Field and clubhouse space beyond the right field wall, at a cost of $250,000 per year, with adjustments for inflation. The Bears have 26 home dates in 2023, starting Feb. 24 and ending May 20.
Attendance figures improved in 2022
Double-A baseball’s Springfield Cardinals bring fans from all over southwest Missouri and beyond to see games at Hammons Field. While attendance has declined since the team’s establishment in 2005, it rebounded in 2019 to 328,217 fans in 69 games, an average of 4,757 fans per game. With the 2020 season wiped out due to the COVID-19 pandemic, the Cardinals returned with 172,134 fans in 59 games in 2021, an average of 2,869 fans per game that ranked ninth in the Texas League.
Back to full strength in 2022, the Cardinals won 68 games and lost 70. They brought a total of 259,044 fans into Hammons Field over 69 home games, an average of about 3,754 fans per game. It marked a 29-percent increase in attendance.
According to Ballpark Digest, the Springfield club ranks 62nd of 120 minor league baseball teams in average fan attendance per game.
Ballpark Digest’s data showed the Tulsa Drillers led the Texas League in average attendance with 5,495 fans per game, followed closely by the Amarillo Sod Poodles at 5,493. The Cardinals ranked seventh of 10 teams in average attendance.
The data shows Springfield had the highest attendance of four clubs in the St. Louis baseball organization, outpacing its Triple-A counterpart, the Memphis Redbirds, by an average of 379 fans per game in 2022.
