A Missoula City Council committee approved a financial deal that would pave the way for public ownership of Ogren Park at Allegiance Field, which has been plagued by fiscal troubles for years.
On a 6-3 vote with Councilman Jon Wilkins abstaining, the Administration and Finance Committee on Wednesday recommended assuming a $3.5 million share of the outstanding secured debt on the stadium where the Missoula Osprey play, to shield the ballpark from foreclosure.
The issue of whether to purchase the baseball stadium will go before the full Missoula City Council for a vote on Monday, one week after the full council held a public hearing.
At issue is whether the council wants the city to own the ballpark or leave it in private hands. However, from the very start of this project, the city of Missoula indicated an interest through contracts with Play Ball Missoula - the nonprofit that fundraised to build the stadium - in eventually owning the facility, which has also been used as a concert venue.
"I could live with a private owner of this facility," said Councilwoman Renee Mitchell, who spoke strongly in opposition to the deal on Wednesday. "You could seek owners that would mesh with Mountain Baseball (the owners of the Missoula Osprey)."
However, as Councilman Jason Wiener pointed out, any of these lenders could have forced the ballpark into foreclosure, and some creditors are assuming at least some of the remaining debt.
"(The city of Missoula) is not being taken advantage of" under this deal, he said.
Plus, there's no city easement along the Clark Fork River where the Riverfront Trail currently exists. The city owns the property where the stadium was constructed, so if the property was foreclosed on, there's no guarantee that the trail would remain open to the public.
Councilman Ed Childers supported the financial deal. While baseball parks have not historically made money, he said, it has improved the area surrounding the stadium and increased economic development in a blighted urban area.
"Some good things are happening there," Childers said. "It's an asset to everything around it."
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Play Ball Missoula, the existing owners and the nonprofit that fundraised to build the ballpark, is in debt to a total of roughly $7 million. Only about $5 million of that is in secured loans, meaning the lenders have claims against the property. Those lenders include Missoula Federal Credit Union, Missoula Community Development Corp. and eight private citizens. At any time in the past several years, those lenders could've foreclosed on the property.
Instead, those lenders are willing, under this deal, to forgive about $1.45 million of Play Ball's debt.
Mayor John Engen and the city's urban renewal agency, the Missoula Redevelopment Agency, have negotiated with the lenders to use $2 million of tax-increment finance dollars to pay down a portion of the debt. That money is general fund money, but dollars directed specifically toward urban renewal projects.
Then, the city will issue $1.55 million in revenue bonds, which the Missoula Federal Credit Union and Missoula Community Development Corp. have agreed to accept in exchange for the debt owed to them.
Revenue from the stadium will pay off these bonds.
Mountain Baseball Inc., which owns the pioneer league team, will enter into a 25-year lease with the city of Missoula to use the facility. In the end, the largest financial burden falls to Mountain Baseball, which will see its rent increase from $35,000 annually which to $120,000 a year and will assume the cost of maintence and utilities. That annual revenue will be used to pay off the $1.55 million revenue bond.
Failing to generate that kind of annual revenue will cause the city to default on their bonds, in which, at that time, the city will take legal action against Mountain Baseball to make the payments, even if that means Mountain Baseball must sell its franchise. MCDC and MFCU have reviewed Mountain Baseball's finances and determined that the company owns assets in excess of the bond amount. Therefore, the financial institutions are confident about entering into the deal.
"We don't expect the city or the taxpayers to pay that gap," said Brent Colbry of Missoula Federal Credit Union, trying to reassure the council members. "Mountain Baseball is committed to this community."
The other option at this point is letting the ballpark be foreclosed. The city of Missoula has the first right of refusal upon foreclosure, but at a price of nearly $5 million, which is the remaining principal and interest still owed on the facility.
Reporter Chelsi Moy will be reached at 523-5260 or at firstname.lastname@example.org.