Case Study Questions

1. What would have been the benefits if the city stuck to its original plan and only issued bonds to finance the Dillion Stadium renovations?
2. What were the benefits for the city if it chose to only privately fund the stadium?
3. What were the benefits the city saw when it decided on a privatepublic partnership to finance the stadium?
4. What are some of the disadvantages of the publicprivate partnership that the city decided on?
5. What could the city have done to make this project more successful?
6. It appears that Hartford has had no luck or is a dysfunctional city when it comes to sport facilities. If you were advising the mayor on what to do with the current and future facilities, what would you say?

Dunkin Donuts Park

The following timeline helps highlight some of the key dates and issues that impacted a multiyear saga that got several government officials fired, led to numerous probes and lawsuits, and left a team homeless in its inaugural season. June 4, 2014: The mayor of Hartford, Pedro Segarra, and Josh Solomon, owner of the New Britain Rock Cats, announce the team will move to Hartford for the 2016 seasonto a new state-of-the-art facility. June 16, 2014: Revenue projections for a minor league baseball stadium are released; the projections are for $8.1 million in the first yearputting the stadium and team in the list of the top 15 highest earning teams/stadiums for all of minor league baseball. June 20, 2014: The original financial plan is to relocate the team and issue bonds for the project. July 2, 2014: The city of Hartford issues a request for proposals for creating a new downtown neighborhood for mixed use, such as a stadium, brewery, stores, and apartments. July 20, 2014: City officials back off the original $60 million proposal and seek a private partner to finance the project. Taxpayers heavily oppose the project. The stadium is promoted as bringing in 665 full-time jobs, 900 construction jobs and up to 24,000 annual hotel room stays. Hartfords initial debt payments and contract terms for the project include the following: 20-year loan to finance the stadium $1.5 to $2 million in 2017 $4.3 million in later years Rock Cats to pay $500,000/year for the first 15 years $600,000 in the final year August 1, 2014: Bid proposals are due. At least 300 housing units and townhomes More than 100,000 square feet (9,290 sq m) ground floor commercial and retail space 220,000 square feet (20,439 sq m) baseball stadiumcost up to $60 million August 18, 2014: The contract is awarded to Centerplan and Downtown North, LLC. August 21, 2014: The town of New Britain and the Rock Cats agree on a tax payment of $164,000down from the original $300,000, after a new tax assessment. This was to settle outstanding debt associated with the old stadium in New Britain. September 1, 2014: This is the eviction date for the New Britain Rock Cats if a $164,000 tax payment is not paid by the team. September 14, 2014: A new plan is to have a private firmDowntown North (DONO)have a publicprivate partnership to finance the proposed $47.1 million stadium. Financing Options Lease to city for 25 years at $3.8 million Lease terms would increase throughout the contractual period Average of $4.1 million per year City to buy park for $4.7 million after 25 years Use tax-free general obligation bondsRock Cats are private, would add tax to bonds City pays $2.9 million per year for facilities over lease life AA bond basic borrowing rate of 3.66% At the end of the leasecity owns stadium September 25, 2014: City projections are released. Potential for $23 million in profit over 30 years Potential for $22.5 million in short-term lossesenvironmental remediation, capital improvements, and so on February 17, 2015: Groundbreaking is held on the baseball stadium, although the design is not finalized. February 21, 2015: Centerplan seeks $20 million in subsidies to offset building costs of income-restricted housing. April 18, 2015: A proposed Hartford Fund would grant tax revenue from a 10% ticket tax back to the stadium to pay off the debt, even though state law mandates the 10% tax go to the state. May 1, 2015: The state of Connecticut is called upon to finance the stadium. Governor Malloy and Connecticut lawmakers do not like the Hartford Fund proposal. A new plan calls for the state to issue general obligation bonds backed by Downtown North development and have taxpayers foot the bill. June 10, 2015: The stadium is named Dunkin Donuts Park after a sponsorship contract is signed. October 6, 2015: To keep up with cost overruns, $4 million needs to be cut from the project. December 24, 2015: Downtown North claims the city has been too involved in the design project and the city has delayed the project. Cost overruns could exceed $10 million. The developer informs the city it may not meet the April 7 deadline to finish construction. December 25, 2015: Centerplan hid cost and timeline problems until representatives showed up at the city treasurers office unexpectedly. There are issues with the city doing work both Centerplan and DONO are doing. January 7, 2016: State finances are in trouble, and Republicans (in a Democratic-leaning state) feel that taxpayer money should not be touched for this project; they are pushing for no state bailout. January 9, 2016: Developers were not sure when the stadium would open. Stakeholders blamed each other for problems. Centerplan and DONO blamed the city for not giving them full control over design and build. The Hartford Stadium Authority said the developers didnt raise red flags until too late and the developers did have the final say on work. The Yardgoats were stuck in the middle; the city is their landlord, so the team was more likely to side with it. The state is facing a $355 million deficit for the 2017 fiscal year, thus it indicates it cannot afford a stadium bailout. The project has $15 million left; to stop and go to court would cost even more. January 10, 2016: The cost has risen from $57.1 million to $60.8 million in just 6 monthsof $15 million left, $8 million is scheduled out for February invoices. January 21, 2016: A $10.4 million gap could be plugged if the team, city, and developers agree on paymentand they could finish the stadium by May 31 (the team would miss 17 home games). DONO offers to give up $2.3 million in fees and add $225,000 in annual tax payments to the city for 25 years. The Yardogats offer to contribute $2 million, give up $500,000 in designated team parking, and cover costs for miscellaneous stadium expenses. The city offers to use $5.5 million in bonds; with DONO payments, the city ends up spending $3.5 million. The substantial completion date is set for May 17. If the completion date is not met, damages collected start at $50,000 the first day and are $15,000 every day thereafter. May 21, 2016: The city files suit for $50,000 in damagesif the surety bond was breached, it could cost the city and developer. May 27, 2016: Hartford puts in a claim with Arch Insurance, which would investigate if the contract was breached. All work stopped when the claim was filed, and the insurer indicates that the investigation could take up to 9 months. The principal of DONO produces construction documents of various change directives given to the developers to satisfy inspectors and to help achieve substantial completion. Over 100 changes were documented, but none were sent through to be approved by the city council. DONO states it had been receiving change orders since April and had a new batch submitted on May 125 days before substantial completion was supposed to occur. June 3, 2016: Developers conduct a full walkthrough and many major items are reported to have issues. No certificate of occupancy is given by the city, but the stadium is announced to be 95% done. Issues include an unfinished dugout, unfinished concourse, unfinished clubhouses, and electrical and heating, ventilation, and air conditioning issues. After work is halted, subcontractors are seen continuing work; they claimed to have been told by the team to keep working. June 16, 2016: With work stopped, the building is no longer covered by property insurance. June 30, 2016: No fire detectors or sprinkler system have been installed; thus firefighters are on duty around the clock to protect the property. July 7, 2016: Centerplan offers a proposal to pay for all remaining work if it can stay on as developer. Mayor Luke Bronin, the newly elected mayor of Hartford, turns down the offer, claiming it wasnt serious. July 28, 2016: Centerplan files superior court lawsuit against Josh Solomon (owner of the former New Britain Rock Cats, now named the Hartford Yardgoats) on the grounds that his design changes knowingly caused two deadlines to be missedthe first resulted in an additional $10 million in construction costs. The team and the city met behind closed doors and made plans that delayed progress. Centerplan claims that Solomon offered to bring in a new subcontractor to take over building the stadium if the facility was not completed by September 1. Centerplan files a response injunction forbidding another company from taking over. August 4, 2016: Centerplan has hopes to be back on the job by September, but claims it is all up to Arch Insurance. August 20, 2016: International Facilities Group analysis finds 186 areas of concernof those, 116 would impact substantial completion. Arch Insurance reaches out to Greenskies Renewable Energy Company for cash collateral for $18.8 million in bonds out for Centerplan projects (assumed to be for the stadium). August 27, 2016: A city audit puts the stadium price tag at $72 million. The estimated total city investment to the downtown area was $102.5 million, but that amount does not include costs related to court battle or value of time spent on the stadium by city staff. September 8, 2016: Work is expected to resume in October; the city is required to pay $4.4 million left on the project. September 15, 2016: Greenskies sues Arch, seeking a declaratory judgement that they will not be responsible for any loses Arch faces under Centerplan bonds. September 16, 2016: The financial situation is so bad that Hartford is considering asking for money in advance from the stadium developer to pay bills. Rising debt service, pension payment, and fewer one-time revenue sources are expected. Caused by employee concessions that did not materialize $4.6 million legal settlement and $1.4 million debt service for Dunkin Donuts Park The numbers are expected to be fluidfor example, if the city won on appeal or the stadium was completed, contractual expenses could be reduced. April 13, 2017This is opening day, and the stadium is complete. June 2019Centerplan Construction and its partner, DONO Hartford, LLC are in court against the City of Hartford seeking $90 million for wrongful termination. The contractor testified that just two weeks before the May 17 construction deadline, the city approved millions of dollars in additional worksome of it correcting code compliance violations. What appeared to be photos of the construction site in disarray actually represented the contractor having to leave the job in a hurry and the addition of more than 100 electrical outlets that affected the entire stadium. The May 3 authorization also required the installation of a barbecue pit, which had been removed from the project just two months earlier (Gosselin, 2019a). On July 3, a jury returned a verdict for the City of Hartford. Then the City started an effort to remove all the developers liens on adjacent properties to allow further development to occur. Such development was on hold during the time the litigation was ongoing. The developer promised to appeal the decision (Gosselin, 2019b).