Winston-Salem Dash get $7m rent break from city to keep mean ol’ MLB from disappearing them

The Double-A Winston-Salem Dash have renegotiated their lease with the city on 11-year-old Truist Stadium to reduce their annual lease payments, and you’ll never believe why the city council went along with it. Okay, you’ll totally believe it:

In the short term at least, the amount of the annual lease will drop dramatically: from about $1.6 million per year to $750,000 per year, and that lower payment also comes with the elimination of an annual ticket surcharge the city collects to the tune of $175,000 per year.

The new lease emerged in negotiations last fall, when team owners told the city they need a lower lease payment to secure the presence of the team here.

Under a downsizing announced last year, some 40 cities are losing their minor-league teams as Major League Baseball reduces its number of farm teams from around 160 to around 120 teams.

City and team officials said the new lease arrangement would bolster the team’s chances of staying.

I hate to say I told you so, but — okay, I love to say I told you so:

Going forward, it will be up to the league office in New York to determine which teams live or die, which means central-office functionaries can deny your city a team by fiat if local officials don’t cough up sufficient protection money for some new scoreboards and upgraded clubhouses.

It’s a little tricky to figure out exactly how much the Dash owners will be saving under the revised lease, since they’ll be making lower lease payments at first, but they’ll rise each year and last longer. By my calculations, the old lease payments of $1.775 million per year through 2039 would have been worth about $21.45 million in present value; $750,000 a year scaling up to $1.2 million a year by 2045 is worth a little under $14 million in present value, so the team owners are saving about $7 million via the new deal.

That’s not a huge amount of money, on the one hand — not compared to the $48.7 million in taxpayer cash Winston-Salem poured into building the stadium in the first place, an outlay that left city officials promising to do better oversight in the future, ha ha ha — but it is $7 million that the owners wouldn’t have gotten without the leverage that MLB’s minor-league contraction plan gave them. If enough teams can renegotiate their leases, soon you’re talking real money, which is a pretty nice side benefit to reducing hundreds of players to unpaid intern status.

Winston-Salem: Okay, that stadium didn’t work out so well

City leaders in Winston-Salem say that they’ve learned their lesson now that their plan to put $12 million into a $22.6 million stadium for the single-A Dash baseball team has ballooned to a $40.7 million stadium, plus $8 million in land costs, all of it publicly funded. The Dash owner, it seems, ran out of money after his business partner got divorced from his sister-in-law, and the city was left on the hook for the entire stadium cost. “From an economical, financial side of any project going forward, there were definitely lessons learned from this project that we wouldn’t want to repeat,” city finance director Denise Bell told the Winston-Salem Journal. “There has never been city oversight in projects like this.”

Better late than never, I suppose. Though you’d think Winston-Salem would have already learned this lesson in 2004, when it gave Dell Computers more than $250 million in tax breaks (including, according to Good Jobs First, “a computer manufacturing tax credit, job investment grants, tobacco settlement fund grants, training incentives, transportation infrastructure grants, workforce development grants, sales tax refunds, waiver of property tax for 15 years and 200 acres of free land”) for a computer plant that only cost half that to build — a plant, incidentally, that Dell just announced it is closing, laying off all 905 workers.

In any case, it’s not too late for other cities to learn the lessons of Winston-Salem. Says city manager Lee Garrity: “If we do any more projects like this where there is any upfront money, we will require extensive due diligence of the financial capacity of the developer and a market analysis. We would put in reporting on the status of construction and significant clawbacks if it is not done on time.” But that’s what they all say.