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Aberdeen city officials continue to grapple with stadium costs, funding

Ordinance is approved to specify that hotel tax money is used for stadium costs

Sensitive to the financial predicament Leidos Field at Ripken Stadium has caused since in opened in 2002, Aberdeen city officials are continuing to grapple with how best to fund debt service and maintenance costs related to the stadium, without burdening city taxpayers with those expenses.

On Monday night, the City Council passed Ordinance 17-O-05 which states in part that beginning with the start of the 2017-18 fiscal year on July 1, the first $850,000 the city receives each year from Harford County in the form of lodging tax revenue will be used "for the exclusive purposes of paying debt service, maintenance expenses, operating costs and insurance for the Ripken Stadium."

The measure passed 4-1 following a public hearing at which no one other than council members spoke.

"We want to be very transparent to the taxpayers," said Mayor Patrick McGrady, who still voted against the ordinance on his principle that the council should wait until the meeting following the hearing to approve ordinances.

Council members said there have been complaints in the past that general fund revenue is being used for the stadium, when lodging tax and other revenue generated by the stadium is merely passed from the general fund to the stadium enterprise fund.

Sandra Landbeck and Tim Lindecamp sponsored the ordinance.

"We want to tell people 'this is not your tax money,'" Landbeck said of the rationale for the ordinance, while Lindecamp said the message is "the people who are staying in our hotels are paying for the stadium."

McGrady recently made an unsuccessful attempt to secure direct county funding to help the city retire its debt on the 15-year-old home of the Aberdeen IronBirds minor league baseball team, so he's turned to Annapolis for help, discussing the possibility for legislation that would permit the city to levy its own lodging tax to be used for stadium-related expenses.

He met with Harford County Executive Barry Glassman earlier this winter to request that the county consider providing up to $350,000 for each of the next five years to be used to the stadium debt.

Of the meeting, Glassman said last month that he told McGrady the county's revenue growth wasn't sufficient to honor such a request, mindful of the revenue the city is already receiving from the two-year-old county lodging tax. He in turn suggested the city has the authority to add its own lodging tax on top of the county's.

During a council work session on Monday night, however, McGrady and City Attorney Fred Sussman said separate enabling legislation would be needed from the General Assembly because, according to Sussman, state law precludes a municipality from collecting a separate lodging tax if it is receiving 50 percent or more of the county's revenue from that source.

McGrady said he has discussed seeking enabling legislation with Del. Mary Ann Lisanti, as well as with the mayors of Havre de Grace and Bel Air.

He said Wednesday he hopes to have the support of the other municipalities within the week and would be meeting with the city's hotel owners to solicit their views. The stadium and neighboring Ripken Baseball youth complex are major business generators for the hotels, he noted.

"I'm on record for 20 years supporting the room tax," Lisanti said via phone from Annapolis Thursday. "If it's something that helps the municipalities, particularly Aberdeen, balance their budgets without raising taxes, I'm going to help."

She said they are still researching what the legislation would say and does want all three municipal government's to sign on, "so we don't have to come back and do it again."

"It's enabling legislation," she said, explaining each municipality would still have to act on its own to levy the hotel tax, "if they ever want to use it."

Money trap

City officials also are continuing discussions about possibly of turning over stadium management to an outside firm once the city's lease with Ripken Baseball, owner of the IronBirds, expires this fall.

McGrady also said his goal is to make the stadium profitable and eventually sell it, although he acknowledges members of the City Council aren't ready to go that far.

"I believe we can find buyers who can run the stadium and make money from it," the mayor said Wednesday. "Small municipalities like Aberdeen shouldn't be in the stadium business."

In January, city officials met with a representative of SMG Corporation, which manages Baltimore's Royal Farms Arena, who told them the stadium could be turned in to a moneymaker with property management and utilization.

The city receives one half of the lodging tax revenue the county collects from hotels within the Aberdeen city limits. Through last June, Aberdeen had received $843,000 from the lodging tax the county began collecting in March and April 2015, according to audited figures. The revenue is running about $640,000 annually

Aberdeen has received a nominal lease payment from Ripken Baseball that increased from about $65,000 a year to $90,000 a year under the one-year renewal the two sides signed in December. The city also receives amusement tax revenue from stadium events, ground leases on some of the property around the stadium used by Ripken Baseball's youth programs and revenue from concessions.

But city officials say the revenue coming in doesn't cover the money it costs to operate the stadium and retire the debt that runs an average of $600,000 in principal and interest.

This year the city is spending nearly $1 million to replace railings and repair cracked concrete around the railing supports. While part of that project is being funded with a $450,000 state grant the legislature approved in 2014, Aberdeen is also facing some $2 million in additional repairs and upgrades needed for the facility over the next nine years.

McGrady said a city lodging tax, which would be in addition to the 6 percent lodging tax collected by Harford County, would be used for stadium debt retirement and future costs related to repairs, maintenance and upgrades. Any money above that would then go to other tourism-related expenditures "to get people to come to Aberdeen and spend money."

If the county's three municipalities received state enabling legislation to set their own lodging taxes, their respective governing boards would still have to set the tax rate and decide how to use the revenue, the mayor noted.

He also said he would consider trying to offer some sort of property tax credit to hotels based on the amount of lodging tax they generate.

While council members were skeptical that lodging tax enabling legislation can get through the General Assembly, Landbeck concluded "there's no harm in asking."

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