After 25 years, is the Camden Yards lease paying off? (Ulysses Munoz and Jeff Barker / Baltimore Sun)
Twenty-five years after Oriole Park at Camden Yards opened, the Orioles have paid the state $255 million in rent and admission taxes — more than the stadium's sticker price — and state officials say Maryland got a good deal even as it continues to spend $15 million a year to pay off the bonds.
Documents obtained from the Maryland Stadium Authority show Oriole Park provides the state money — and costs it money — in relatively equal amounts each year. That doesn't include the less measurable impact the stadium has on consumer spending, state tax revenues and the city's image.
"Maryland has not done nearly as poorly as some but has done worse than others," said Dennis Coates, a professor of economics at the University of Maryland, Baltimore County, who has long questioned the benefits of government support for sports venues.
Since Camden Yards opened in 1992, Coates said, many other baseball and football team owners have demanded costly "bells and whistles," and some stadiums already have had shorter life spans than Oriole Park.
The club's lease is due to expire at the end of 2021, though the Orioles have the option to extend it for five years. While everyone expects the Orioles would continue playing at Camden Yards, given the club's deep Baltimore roots and commitment to the city, everything else could be on the table, including lease terms and updates in and around the stadium.
Under the terms of the lease, the Orioles pay the stadium authority varying percentages of ticket sales, stadium advertising revenues, parking revenues, concessions sales and suite and club-level revenues. The lease makes the authority responsible for maintenance and repairs while the team provides ushers, ticket-takers and other game-day staff.
Documents show the authority has received an average of $6.4 million in annual rent from the team, plus $4.1 million a year as its share of state admissions taxes. The total, through the fiscal year ending June 30, 2016, is $255 million.
That compares favorably with the stadium's original $225 million price tag, including $100 million for land acquisition and $125 million for the stadium.
The state also rents out the the brick B&O Warehouse, the stadium's right field backdrop, collecting about $4 million a year, the authority said.
But, as Coates and others point out, the state's tab is considerably higher when financing costs are included.
The stadium authority said it pays about $15 million a year in debt service — principal plus interest — on the 30-year bonds issued to pay for Camden Yards. The bonds are to be fully paid off by the end of 2019 at a total cost of about $450 million, about twice the stadium's initial cost.
The debt service, however, is paid with Maryland Lottery proceeds appropriated each year by the General Assembly. The authority uses the team's rent money for ballpark operations.
Still, state officials— and at least one regional economist — declare Camden Yards a bargain. Cheap by today's standards, the red-brick stadium was an instant hit with fans and the forerunner for a generation of retro, baseball-only parks in downtown locations around the league.
"It's unquestionable this has been a good thing for the city and state," said Michael Frenz, the authority's executive director. "A lot of the value is because the park has become so iconic. Every time a game on is on TV there are all these beautiful shots of Baltimore. There is value in that. Think about how much Camden Yards helps Baltimore in terms of convention business."
Oriole Park is "our Fortune 500 company," said Terry Hasseltine, a stadium authority vice president who seeks to attract sporting events to Maryland. "When you go out nationally or internationally, you're talking tens of millions, if not hundreds of millions of dollars, in media value because of the brand equity."
Oriole Park was approved as part of a stadium package. After the Colts left Baltimore for Indianapolis in 1984, state lawmakers approved a pair of stadiums in 1987 with the goal of keeping the Orioles in the city and trying to attract a new NFL club.
After being burned by the Colts, the state's principal objective was securing a commitment by the Orioles to remain in the city, said Herb Belgrad, the former stadium authority chairman when the ballpark was built.
Because the stadium was intended as an urban development anchor, the state believed it would receive a solid return on its investment. It didn't require the Orioles to reach specific economic milestones.
"We didn't talk in those terms," Belgrad said. "After our experience with the Colts, we were all very paranoid. The team achieved very favorable terms for them to remain in a new park. What we achieved was an economic benefit to the Baltimore metropolitan area that was significant."
The promise the team made was "to a long-term lease and to make Baltimore their home for the duration, and that obviously has been fulfilled," said Alan Rifkin, who is now counsel to the Orioles but earlier served as chief counsel to then-Gov. William Donald Schaefer. Rifkin said the club has "overdelivered" with its impact on spending and civic pride.
Spending associated with games at Oriole Park averaged $331.3 million in the 2014 and 2015 seasons, according to a recent study for the stadium authority by Crossroads Consulting, a Florida firm. The ballpark supported an average of 2,440 jobs each year, it said. And the games generated about $22.5 million in state tax revenues over the two years.
The impact of fan spending and other stadium economic benefits is often the subject of debate in the academic community.
"Regarding the economic returns to the community, the consensus among economists is that these are too small to be able to measure, if they exist at all," said Roger Noll, a Stanford University economist.
But economist Anirban Basu called called Camden Yards "an enormous economic winner for the city and the state."
"It is of course possible that a city or state can end up spending too much, but Camden Yards was a bargain the day it was built," said Basu, CEO of the Baltimore-based Sage Policy Group. "One cannot imagine what it would mean for Baltimore without Oriole Park at Camden Yards and the Orioles and it should be noted Baltimore could be in a situation without it — of having no professional franchises."
M&T Bank Stadium, home of the Ravens, opened in 1998 at a cost of about $220 million, not including interest on the bonds. The team doesn't pay rent but — unlike the Orioles — reimburses the stadium authority for the cost of operations and maintenance. Those payments, plus admissions taxes, have totaled $221.8 million through last June, according to an authority document.
The Orioles and stadium authority have each spent millions of dollars over the years on upgrades, including a rooftop deck in 2012 paid for by a stadium improvements fund controlled by the authority and the team.
Before this season, the team paid for a new field, and the authority funded new LED lighting.
The Orioles and the state could potentially tap several different revenue sources for future renovations.
The club could use its own funds. The state holds a capital expenditure account that might be used. And since there is some retired debt on Camden Yards, new bonds could be issued to finance improvements.
The Ravens said in January they are investing $120 million in M&T Bank Stadium as part of a three-year project that will add elevators and escalators, enlarge the end zone video boards and improve the sound system and kitchen facilities. The stadium authority pledged to spend an additional $24 million for improvements.
"Many economists will still make the claims these types of investments do not make sense," Basu said of Oriole Park. "This is a quality-of-life amenity. It's an amenity that helps maintain social cohesion."
Baltimore Sun researcher Paul McCardell contributed to this article.
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The Maryland Stadium Authority built the ballpark, which opened in 1992, for $225 million, including $100 million for land acquisition and $125 million for the stadium.
How paid: Financed with 30-years bonds at an annual cost of $15 million that will be paid off in 2019.
State return: An average of $6.4 million in annual rent from the Orioles, plus $4.1 million a year as its share of state admissions taxes, totaling $255 million through the fiscal year ending June 30, 2016. Stadium authority also receives $4 million a year from rents in the brick B&O Warehouse.
Terms: The Orioles pay their state landlord, the Maryland Stadium Authority, 7 percent of ticket sales, 25 percent of net stadium advertising revenues, 50 percent of net parking revenues, 9 percent of concessions sales and 10 percent of suite and club-level revenues.