Sports Complex Presents Fiscal Curveball

The City Council ended 2012 with a vote supporting the exploration of building a new softball complex at either the former Singleton Landfill site or at the County Fairgrounds. The Singleton property is located within city limits and is owned by the city of San Jose, while the fairgrounds site is located within an unincorporated pocket and owned by Santa Clara County.

The Measure P bond money that was approved in November 2000 by 78 percent of voters would fund construction of the proposed sports facility. The usage of these funds is restricted by state law, which stipulates that Measure P funds can only be spent on purchasing land or the construction of park facilities. In other words, Measure P funds cannot be used to operate and/or maintain the proposed softball complex. This is important to note, because any new or expanded facility funded by bonds may require ongoing financial support that would be drawn from the city’s general fund.

Since the 90-acre Singleton property is a landfill, options for development of the site are limited. Landfill sites are seldom utilized for farming or housing and rarely support tall buildings due to geotechnical considerations. Such land use proposals would face legal challenges and are unlikely to move forward. A new sports complex, on the other hand, would be a legally acceptable use for the land and the resulting facility would add to San Jose’s recreational offerings.

The clear advantage of choosing the Singleton site over the county fairgrounds site can be seen when one follows the money: Revenue from sales tax and the ground lease at the Singleton site would go to the city of San Jose. Unfortunately, no revenue would flow to San Jose if the county fairgrounds site were selected. For this particular reason, I am hopeful that the Singleton site is chosen if the project moves forward. 

Regardless of which location is selected in the end, the city needs to approach the proposal review process in a comprehensive and diligent fashion. Legislators must look towards a positive outcome that is notable not only for its overall success, but also for its fiscal prudence.

The softball complex needs to be self-sustaining, and the projections provided by city staff need to be realistic. I say this because advocacy from staff along with some councilmembers threw the city a financial curveball in the not too distant past. This curveball contained flawed projections and led to the approval and subsequent spending of tens of millions of dollars subsidizing both the Los Lagos and Rancho Del Pueblo golf courses, as well as the Hayes Mansion.

The city continues to pay millions of dollars each year from the general fund to subsidize these facilities, instead of using this money to hire police officers or repaving streets. 

The city should lease the Singleton property to a private company rather than having city staff operate the complex. The 60-acre Twin Creeks Sports Complex located in Sunnyvale operates in a similar fashion. The private company should manage the sports complex by assuming responsibility for their own human resources and procurement needs, without involving the city.

In addition to revenue collected from the ground lease, the city should derive a portion of the facility’s net income. The complex will have on-site food and beverage sales and a retail center. The council should also allow opportunities for advertising revenue.

In order to ensure that the city has adequate visibility, our finance department should have real time access to the private company’s accounting software. (This is similar to the arrangement currently in place between the city and Team San Jose regarding the management of the San Jose Convention Center.)

I prefer net income to gross receipts, because the city should experience first hand the impact of any city ordinance or policy that may limit profit margins on private business.

A state of the art sports complex has the potential to become a destination in and of itself. Such a facility would draw more people to the area and lead to greater consumer spending for local business. However, we cannot be blind to the fiscal liabilities that new facilities may create for the general fund.

Softball requires that players follow the rules of the game. The city should also be required to follow the rules of fiscal pragmatism when this item comes up for a final vote in approximately six months.

Pierluigi Oliverio is a councilmember for San Jose’s District 6.

7 Comments

  1. Appreciate your comments but another lose / lose development.  I have played on many teams playing in and out of the state.  Twin creeks is good because of local hotels and restaurants.  This site puts teams staying in poor areas of SJ or traveling far to safe hotels restaurants. How will this generate income other than entry fees?  How much will local teams pay for a weekend touney? Because that is about all you will get.

    Great site for local teams.  Is gas still venting from the land fill?  This project will never pay for itself, just like the golf course across the street.

    Golf courses, Hayes Mansion, airport, all money losers.  Hide funds but this is a no winner.

    Just because this is a wasted land do not waste good money because it is fading.

  2. “, Measure P funds cannot be used to operate and/or maintain the proposed softball complex. This is important to note, because any new or expanded facility funded by bonds may require ongoing financial support that would be drawn from the city’s general fund”

    And that my friends is the end of this hair brained idea. Luigi, stop wasting time on this and get to work making sure we’re safer than Oakland.

    • Actually , all it means is that the City of San Jose will continue with its shell Game of blaming city employees , all while dispensing monies where ever they wish . Remember the airport is supposed to be self sufficient , But we give them Millions of dollars a year . Doesnt really sound self sufficient does it. There are many examples of san jose doing this. but lets continue t blame public safety for all our issues

  3. PLO , as always you only discuss things that trulely dont matter ! If you have the monies for a Softball facility …………..then why dont you have money for public safety???? I would think that that San Jose residents safety is more valuable than a ball park . Why not use the Monies wasted on trying to defend The ILLEGAL ” Measure B” that is Guaranteed to lose . That money could /should be used to shore up our insanely decimated public safety !

  4. Some of us have been waiting 13 years for this! Measure P (about $230M) passed in 2000 by 78% of the voters.  The eight-field softball complex was a centerpiece of the measure and it is the ONLY item not completed. It is ridiculous that in 13-years, the staff has not even put a plan on the table for an Eight-Field complex; nor did they reserve any money for purchase of a site, even though land purchase was part of the measure.  The article states ” Measure P funds cannot be used to operate and/or maintain the proposed softball complex. This is important to note, because any new or expanded facility funded by bonds may require ongoing financial support that would be drawn from the city’s general fund.”  This is, and has been, the case for all measures and one would expect the Council and City Staff to be aware of this and appropriately plan for operational fudning. 
    Softball tournament play is a money-maker for many cities across the USA.  If done right, and I would recommend an outside sports-contractor, it would raise revenues here.  There are more customers for Twin Creeks than they can support.  Check with the County with respect to Twin Creeks supporting itself. 

    The County wants to talk with the City about a Fairgrounds site; and that would be the best, I think.  There should be a discussion about cost and fund-sharing.  Any and all projects require operational considerations.  Many community centers were completed via this measure; should we close them all down and hire “essential services”?? 

    Of the 78% of voters that passed this measure, few will be playing softball out there; or golf at Rancho del Pueblo, or San Jose Muni; and only a small fraction will be attending Family Camp this summer. So what??!!  The consideration of quality of life requires this type of service from a City Government.  Let’s not get carried away with the pinch of ‘essential services’.  The situation was brought about by inadequate planning, little thought and too enthusiastic support in the good times; and now we are feeling the pinch.

    San Jose has a climate for year-around recreational play.  The weather and amenities are here to draw big tournaments.  It is time to fulfill the promise of Measure P!  patrick p. pizzo

  5. In light of the move to fulfill the promise of Measure P, I thought I would share this formula by a gentleman in Georgia ( by Bill Slaughter) for determining the potential income from Softball Tournaments.  The South Bay would be a huge draw for a National Tournament.  I know staff probably has this type of data, but I wanted to share this back-of-the-envelope calculation with the interested public.  As an example, consider the Las Vegas World Masters Championship for 2012 (http://seniorsoftball.com/?event=650):  446 Teams Entered and the Fee was $695 per Team.  Try the formula!    pppizzo

    ps:  some combination of youth and adult tourneys
    is actually the best formula for optimizing the financial gain of such complexes . . . since youth teams normally bring
    families (more people, more activities and money spent) with them.  This would necessitate the “softball” complex having
    a portable mound, alternate base anchors, etc., to be functional for youth baseball, too. Easy enough to do if planned for.
    And then, there are collegiate tournaments.  The women’s softball team at SJSU, for example, held a tournament in recent
    years at Pleasanton as they had no local venue, suitable for their needs.

    http://softballcenter.com/tournaments/2012-tournament-reports/1270-2012-usssa-las-vegas-major-report.html  Shows 6-field complex and reports results with photos and such.

    Begin forwarded message:

    From: Jim Batterson
    Date: January 20, 2013 9:10:24 AM PST
    To:
    Subject: Re: economic impact of softball tournaments

    Pat,

    Attached find a document that may help paint the “economic
    impact of softball tournaments” picture.

    Jim B.

    Google:  Economic Impact “Bill Slaughter”  URL, listed below, and it is a long one!

    https://docs.google.com/viewer?a=v&q=cache:5CEGVWZlhAMJ:o3.aolcdn.com/hss/storage/patch/c2a7ffa1addfc7dbd2f5ff9fee6d2981+economic+impact+“Bill+Slaughter”&hl=en&gl=us&pid=bl&srcid=ADGEESjKxdlKX52ryd8spedFfuvWHW2FPf6u5VH535mtZBtXGjJKOz3v5tBuWQYeH4OsOQyRN59KoqWN9YWSf71GrP9u25udwT-VMZj9L7hraCWbGI8ZW_ehwvzwiUqd1c-4ouomifn7&sig=AHIEtbQtnBtnBAhZF0Gkr494zhl_73964Q