Wednesday, October 15, 2014

Developers Fail to Front Most of Promised Cash, County May Hand Over $11M Anyway

Facing a Tuesday deadline (which was already extended) to come up with financing for its spring training youth baseball mega-complex, a Gary Sheffield-endorsed group of investors has apparently come up with enough evidence to convince Pasco Co. to release $11 million in bed tax dollars.  The Trib's Laura Kinsler reports:
With minutes to spare before a midnight deadline, Blue Marble founder James Talton and former Major League Baseball star Gary Sheffield came through with a financing plan for the $23 million needed for the county to release $11 million in tourist tax revenue it has pledged to help build the complex.
But with its $50 million investor gone, so too for now, are dreams of spring training at the complex.

And an even bigger red flag to me is that $20 million of the $23 million is in the form of EB-5 investment {RECORD SCRATCHES}.  The federal program allows foreign investors to earn visas in exchange for loans.

The investment group qualified - but did not secure - the funding. 

As I've covered before, the problem with EB-5 funding is that it is typically short-term financing, it's limited in capacity, and there have been problems relying on the funding mechanism in the past.

Simply put, qualifying for the funding doesn't mean you have 20 foreign investors lined up to write you million-dollar checks each.  The developers admit it could take a year to accomplish this.  I suspect it won't even be that easy.

Oh, but having just $3 million in the bank of the desired $50+ million isn't stopping Sheffield from still talking about luring the Braves to Wesley Chapel, Fla:
Sheffield said he already has had preliminary discussions with the Braves about relocating their Spring Training facility from Disney’s Wide World of Sports to Wiregrass. Talton said if they do land an MLB team, the company would have to buy additional land within Wiregrass Ranch.
The only hope for Pasco taxpayers if the county approves the subsidy, is that officials mandate some sort of clawback provision in case the developers fail to hold up their end of the bargain.

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