Baker Tilly analysis guides Atlantic coast town on sports P3 investment

​​Client background

A growing, rural town of over 30,000 on the picturesque Atlantic coast was looking to provide more entertainment options and new housing units for its residents.

The business challenge

The town was presented with a development proposal, led by a developer-investor group, to build a region-changing stadium which would bring a minor-league baseball team to the town, as well as surrounding development including hotels, mixed-use retail and office space, restaurant, rental and for-sale housing, and medical offices. The opportunity was proposed as a potential public-private partnership between the town, developer, and a sports entertainment group, and was expected to attract visitors, increase residents, and bring in sales tax and tourism revenues from the surrounding region. Baker Tilly was engaged to conduct a project feasibility analysis and economic impact assessment so the town could further understand the projected revenues and costs resulting from the project.

Strategy and solution

Baker Tilly conducted a financial analysis beginning with a developer-led vision and associated project plans, studies, and construction costs. The team reviewed projected growth from the proposed stadium project and associated development, including square footages and unit counts for over 9,950 units of rental and owner-occupied housing, over 400,000 square feet of retail, 650,000 square feet of office, and approximately 400 hotel rooms with an expected construction value of $2.39 billion planned over 20 years.

Through growth projections determined by the developer, a third-party real estate market analysis, and the entertainment group, the team determined the expected value of the development at full build-out. Estimated property tax revenues for the local jurisdictions were then determined based on highest and best use modeling. Operating revenues from the stadium and sales tax estimates were based on similar projects, growth projections, and the expected increase in visitors. Other public fees for utilities, public services, and resident growth were also reviewed.

An economic impact analysis was also conducted that showed nearly 30,000 direct, indirect, and induced jobs as well as over $5.1 billion of economic output and labor income, showing a favorable long-term economic impact.

Baker Tilly recommended that the Town conduct further exploration into the proposed stadium and associated development, including a more detailed application of available funding sources and finance tools, review of the impact on town services, use of innovative partnership structures, and further define quality of life benefits.