Coyote Blog

My son, an avid baseball player, loves the "field of dreams" concept, where little league fields are built to resemble famous major league stadiums.  We have played on such fields in several towns of California.  Recently, Gilbert, a suburb of Phoenix, ended up paying $40 million for such an 8-field complex, which seems excessive even with the cool concept.  It certainly is a whole new world when city governments build
little league baseball fields at the cost of $5 million per field.

As a private company in public recreation, I can say that the deal  cut by the city of Gilber with Big Leage Dreams to design, build, and operate the park really looks appalling.  We build and operate recreation facilities under competitively bid concession contracts, but never have I seen such a sweetheart deal.  First, in every case, I pay a bid percentage of revenues as rent to the public landlord for the concession.  This deal seems to include no such rent to be paid by the operator Big League Dreams.

Second, our company is always responsible for making at least some of the capital investments.  The public entity may have to lengthen the term or reduce the minimum rent to a level where a private company can get a return, but most of the capital nowadays is usually private.  Further, if the public entity does put up capital, it is a fixed amount with the private company responsible for the overage (if the private company is building it -- the terms might be different if the public entity is doing the construction itself).  In this case, the town of Gilbert let the private operator build the facility with little oversight and was committed to absorbing all of the 76% cost overrun.  Now the private company, who has already defaulted on its one major commitment to the city (ie the capital cost) gets a $40 million facility rent free to run for profit.  Stupid city.

Well, at least the city engaged an expert consultant to help them with the feasibility study, the project evaluation, and the writing of the bid spec.  That consultant was ... Big League Dreams.  The same company that by a wild coincidence also got the construction and operating contracts.