Fayette County

Youth sports is big business, but should Lexington invest?

Proposed Youth Sports Complex

The Bluegrass Sports Commission is leading efforts to build a youth sports complex off of New Circle Road. A potential 134-acre site between Versailles Road and Parkers Mill has been identified.
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The Bluegrass Sports Commission is leading efforts to build a youth sports complex off of New Circle Road. A potential 134-acre site between Versailles Road and Parkers Mill has been identified.

Finding a hotel room or getting a seat at a restaurant in Elizabethtown will be tough if not impossible this weekend.

A baseball tournament at the city’s sprawling 158-acre youth sports complex is expected to draw hundreds of out-of-town visitors to the town of nearly 30,000 people just south of Louisville.

An economic analysis done the first year the $29 million complex opened showed that the park, which opened in 2012, generated $11.9 million to $14.1 million in hotel stays, restaurant meals and other spending, said Janna Clark, director of sports tourism for the Elizabethtown Convention and Visitors Bureau.

Built using an additional tax on restaurants, the city-run park costs the city about $1 million a year to operate.

Elizabethtown’s experience with youth sports and youth sports tourism is being closely watched as Lexington looks to build its own youth sports complex on 130 acres of city-owned land near Versailles and New Circle roads. The proposed $25 million complex could include more than 20 different sports fields and would host soccer, baseball, softball and lacrosse tournaments.

The Lexington Urban County Council will take its final vote Thursday on a $345 million proposed budget that includes $7 million in bonding for the project. Those who support the Lexington sports complex point to the economic boom the Elizabethtown Sports Park has generated. An economic analysis released earlier this year predicts a Lexington sports complex could generate as much as $450 million in new spending over 20 years.

But others have questioned if city tax dollars should be spent on a complex that will benefit the city’s hotels and restaurants but will not generate additional revenue for the city’s general fund. Sales taxes go to the state. Hotel taxes support VisitLex, the city’s convention and tourism bureau, and the Lexington Convention Center. Traffic into the proposed complex off of Parkers Mill or Versailles roads is another top concern voiced by some on council and neighbors close to the project.

Lexington city officials have said the $7 million is only a placeholder in the budget for the fiscal year that begins July 1. Council must still approve the issuing of the bonds for the project in the next year. The Bluegrass Sports Commission, a Lexington nonprofit, has said it has secured more than $6.25 million in corporate sponsorships to help offset the $25 million cost. Bluegrass had originally asked for $18.75 million in city money in the current year budget. The city has said that if the project gets off the ground, the city could put more money into the complex in later years.

Most parks either break even or lose money. But the city is okay with that because of the huge economic impact it generates.

Jared Bratcher, sports marketing director for the Owensboro-Daviess County Convention and Visitors Bureau

“There has been widespread support throughout Lexington for this project,” said Phil Holoubek, a sports commission board member who has spear-headed efforts to get the complex built. “Our economic impact study shows that it will have a $23 million economic impact in the first year.”

But to build it, the city will have to give more than just money.

In addition to the $7 million, the 130-acre vacant tract of land owned by the city is worth approximately $5.8 million, according to the most recent assessment. The land was given to the city by Kentucky River Coal in 1997 with the understanding that the city would use the land to build a park.

“We will be giving up nearly $6 million in property and to whose benefit and to whose detriment?” said Josh Hicks, who lives in Wellesley Heights, the neighborhood closest to the proposed park. “As a taxpayer, I am going to be bearing the burden for this and it still doesn’t seem like there is a fully vetted plan. The Elizabethtown sports complex loses money each year.”

An $8 billion industry

The National Association of Sports Commissions, a Cincinnati nonprofit group, estimated the total economic impact of youth sports tournaments at $7.68 billion in 2011. The growth of traveling youth sports teams has led to an uptick in not only money spent on sports but also hotel stays and other travel costs.

Owensboro was one of the first cities in Kentucky to tap the growing youth sports market. A combination of city and county money went into building what is now a total of 18 baseball and softball diamonds and 12 soccer fields in the Owenboro area.

Jared Bratcher, sports marketing director for the Owensboro-Daviess County Convention and Visitors Bureau, said city and county leaders saw the bump in the number of visitors and spending in the Ohio River town after the first few large tournaments. The city and the county run the parks. Bratcher books the tournaments.

“Most parks either break even or lose money,” Bratcher said. “But the city is okay with that because of the huge economic impact it generates.”

Youth sports complexes are similar to convention centers, tourism officials said. Most convention centers break even or lose money but they fill hotel rooms, bring visitors to town and increase a town’s visibility. Lexington’s convention center is unusual: it does not receive any funding from the city for operating expenses. But it does need the city’s help for capital projects. In the budget for the upcoming year, there is $10 million to help the convention center pay for a $250 million expansion.

Owensboro’s fields have generated income, a 2013 study showed.

Just baseball and softball tournaments brought in nearly $20 million in direct spending. The tournament-level playing fields attract about 60,000 out-of-town visitors each year. Since Elizabethtown opened its facility in 2012, there are some weekends in Owensboro that are now open that were not prior to 2012. But, Bratcher said overall, Owensboro did not suffer when Elizabethtown opened.

“Our July will be the biggest month we have ever had,” Bratcher said. “Our numbers keep trending up over the last three or four years.”

Bratcher, who is also involved with the National Softball Association, said if Lexington opens its own youth sports complex, it likely won’t drain business from Owensboro.

“Now, I wouldn’t want another one opening 30 minutes away,” Bratcher said.

Janna Clark, sports and sales director for Elizabethtown Tourism and Convention Bureau, said the number of out-of-town visitors to its park continues to grow.

Last year, the 25-field sports park attracted more than 75,000 out-of-town visitors, up from the previous year’s count of more than 55,000. Hardin County hotels are full nearly every weekend when the park is open, she said.

“We have a lot of teams that have to stay outside of Elizabethtown,” Clark said. Plans have been announced for a new hotel and several new restaurants close to one of Elizabethtown’s main exits on Interstate 65.

A tax on restaurant bills is generating more than enough money to make the payments on the $29 million in bonds used to construct the park. But the city picks up the tab for maintenance, upkeep and staffing at the park, Clark said.

Jeff Hawkins, director of finance for the city of Elizabethtown, said concessions, tournament and other fees do not cover the cost of running the park. The city spends on average $1 million from the general fund to pay for it, Hawkins said.

Although there have been rumblings from some about the cost, so far, the city believes its worth it. Elizabethtown lets local sports leagues use the park during the week and on weekends when tournaments aren’t booked, he said. Owensboro’s fields are also used by local leagues, Bratcher said.

When asked if there would be enough sports tournaments for both Elizabethtown and Lexington, Clark said it depends. The two cities are a little less than 90 miles apart.

“I think the answer for that depends on what type of sports tourism,” Clark said. “I know we have to turn some business away. But you have to find your niche in the marketplace.”

A park for whom?

Tom Creech has lived in Wellesley Heights for more than 30 years. If approved, the youth sports complex would be in his back yard. After Kentucky River Coal donated the land in the late 1990s, the city developed a plan for a public park with input from neighbors. The designs for the proposed park — which included youth sports fields — also had a lot of green space. It was a park for more than just athletes, Creech said.

“Whenever we asked what happened to that plan, we were told there was no money,” Creech said. “Then the Bluegrass Sports Commission comes in and all of a sudden there’s $7 million.”

Carrie Trapp, who also lives in Wellesley Heights, said she’s concerned the city is spending too much money on a park that may not benefit all taxpayers in Lexington.

“The money will be spent to build leaseable space that will be run by a for-profit company, that’s not a public park,” Trapp said. “I just don’t feel like this is the best use of this parcel of land.”

There is access to the property via Parkers Mill Road, a two-lane road that is already overtaxed, Creech said. There is a curb cut on Versailles Road but previous efforts to use that access have been stymied by state transportation officials because that entrance is too close to New Circle Road, he said.

Wellesely Heights is considering hiring an attorney to represent the neighborhood’s interest before the council.

Those who support the park say local teams will be allowed to use it. Moreover, the city won’t be on the hook for ongoing operation costs. Unlike Elizabethtown and Owensboro, it will be a public-private partnership.

Brian Miller, president and CEO of the commission, said the group is already in talks with Fayette County Public Schools to lease the fields for practice during the week. The plan is to let other local sports leagues use the fields for tournaments. The fields will be artificial turf, which increases the lifespan of the fields and the number of games the fields can handle. Tentative plans also call for walking trails to connect the park to the suburban trail system.

The plan is for the city to lease the park for a minimal amount — $1 a year for 99 years. A third party that specializes in youth sports tournaments will operate the park, not the city, said Holoubek.

“We will sign a memorandum of understanding before any construction takes place and funds are released,” he said. “We will be minimizing the financial risk to the city.”

The third-party vendor would assume any loses or must cover the difference between revenue and expenses. Construction contracts will be written so there are not excessive overrun costs, Holoubek said. “All construction tracts will be written so there will be a ‘not to exceed’ or a maximum set price.”

Miller said the commission has already received promises of $6.5 million in corporate sponsorships, which include naming rights and soft drink rights, commonly called “pouring rights.”

Some on the Urban County Council have questioned if the city could not get those same corporate sponsorships without the commission.

Miller, who previously worked for IMG and Host Communications, said the city has not been able to generate those types of sponsorships in the past. Corporate sponsorships and sports marketing are the commission’s specialty, he said.

In August 2014, the city of Westfield, Ind., had to loan $6 million to a private developer of Grand Park, a youth sports park outside of Indianapolis, when corporate sponsorships fell short and a legal fight with a contractor led to a shortfall in funds, according to media reports. That loan was issued just two months after Grand Park opened.

There has been widespread support throughout Lexington for this project. Our economic impact study shows that it will have a $23 million economic impact in the first year.

Phil Holoubek, Kentucky Sports Commission

But Miller said the corporate sponsorships the commission has pursued are committed to the project.

Holoubek said the group is also paying for a traffic study to address some of the concerns about Parkers Mill Road.

The sports complex would be a boon to Lexington-area youth sports leagues, which are pressed to find practice and game fields, he said.

“Lexington is a sports crazy town,” Holoubek said. “We have 40,000 kids in Lexington who play youth sports.”

Final vote on Thursday

On Tuesday, the council voted 11 to 1 to move the budget to the council’s agenda. A final vote is scheduled for Thursday’s council meeting. The budget is for the fiscal year that begins July 1.

It’s likely the budget and the money for the sports complex will be passed. Many on council have said they support the $7 million in the budget for the sports complex.

“I support moving forward because this is truly an economic development project, the first of its kind for Lexington,” said Councilman Kevin Stinnett. “We have a demand for it, a need for it, and I believe we have an opportunity that could provide huge dividends for all our parks down the road.”

Stinnett said he thinks there is time to work out some of the issues that have been raised about the project before the city signs a check.

“The $7 million is a match to private investment into the project,” Stinnett said. “We are still a long way from starting the project and we will have to make sure the location, the infrastructure and the MOU (memorandum of understanding) address the concerns of the citizens and council members.”

Councilman Bill Farmer Jr. was the lone council member Tuesday to vote against moving the budget forward. Farmer said his no vote was cast in part because there are so many unanswered questions about the park that need vetting and further public discussion.

“From a community standpoint, is this the best place for this park?” Farmer said. “Wouldn’t a spot like Coldstream Park, which is close to both Interstate 75 and Interstate 64, work better? And we haven’t even touched on the traffic issue. Parkers Mill Road is one of last old country roads between Man O War and New Circle roads. A replacement for that is not inexpensive and frankly it’s not in the cards right now.”

Beth Musgrave: 859-231-3205, @HLCityhall