Protecting Key Assets … Paying Down Old Debt
– By Valerie Cury
The Town of Purcellville received four responses as part of a Request for Information process for companies that could manage and preserve all portions of the Fireman’s Field Complex. The RFI emphasized, “It is important to note that several members of the Purcellville Town Council and community have expressed a desire that any proposal maintains and/or improves upon many of the existing activities and events as the Town Citizens and greater Purcellville Community view this Fireman’s Field and Tabernacle complex as having significant community and historic value.”
The four RFI’s received were from: Purcellville Teen Center, Inc., Lifeview Real Estate, LLC, Play to Win, LLC, and ECHO (Every Citizens Has Opportunities). Council and staff are working on the next step, the final draft of a Request for Proposal.
Fireman’s Field is located at 250 South Nursery Avenue, and is 15.89 acres. It includes the Bush Tabernacle/Skating Rink (on the Virginia Landmarks Register and the National Register of Historic Places), Fireman’s Field Stadium and Ballfield, Haske Field and T-Ball Field, Dillon’s Woods Park (with gazebo and pavilion), and parking lot. The property is in permanent conservation easement (with the exception of Haske Field and the T-Ball Field) with the Commonwealth of Virginia Department of Historic Resources.
The Town Council is looking for a firm to operate and manage the complex “with the purpose of generating public revenue for the citizens of the Town while fully and in perpetuity preserving the character and Town ownership of the entire property.”
Why The Change?
The total investment in Fireman’s Field has been $6,037,457, with a current debt profile of $3.8 Million in principle and interest. The current cash payoff of the entire balance of the Parks & Recreation portion of the Build America Bonds is $2.1 million. The current yearly debt payment is $284,245 with a final payoff in 2037 with a balloon payment in 2021 of approximately $1.8 million.
There is also ongoing upkeep to the property – such as replacing the floor of the Bush Tabernacle/Skating Rink – general upgrades to the complex, and tree care and landscaping.
Former Mayor Bob Lazaro weighed in on the issue, disagreeing with the Council’s outside management strategy and saying in a social media post that privatizing Fireman’s Field is “not a good thing for the youth of our community.” Said Lazaro, “It is a win-win now with all the majority of improvements paid off in 2021 [referring to the balloon payment].”
But, according to Council, the way the current debt is structured, limits the amount of revenue the Town can generate – while restructuring it will give the Town more financial flexibility.
In 2013, the Lazaro Council restructured the debt on Fireman’s Field (and other properties,) limiting the Town’s ability to generate revenue due to IRS-imposed private use restrictions associated with the tax-exempt nature of the debt.
The current Council recognizes the need to remove the restrictions to allow the Town broader opportunities to generate additional revenue. One of the positive outcomes would be to reduce/eliminate the current Fireman’s Field tax.
Since the Town has a sufficient fund balance to pay off the balloon payment on the Build American Bond for Fireman’s Field debt, this would allow the Town to restructure the remaining debt over a 15- to 20-year payment process, reducing annual debt service payments by approximately 50 percent with a debt conversion that is break even.
Said Council Member Kelli Grim, “Currently we are in a very negative situation that we are working to improve. We have a valuable treasure that has the potential to be an income-producing asset. It has not been well maintained as much as it could be. The way it was packaged in our debt financing was not wise. We need to be revenue positive. We have a floor at the skating rink that needs to be replaced and the cost is on us. Previous Council raised the citizen’s taxes by 17 percent. We are moving in the right direction.”
Council Member Ryan Cool said that the four words that the Council is talking about are, “preserve, maintain, enhance and revenue.” Cool put an emphasis on enhance because he said the property needs enhancements, such as new scoreboards and bleachers. Noise abatement needs to be addressed as well as traffic, he said. Cool also emphasized that anything currently booked at the skating rink would not be cancelled. Council Member Karen Jimmerson echoed, “We will honor all commitments.” When reached for comment, Jimmerson stated, “The majority of users of Fireman’s Field are County residents who don’t pay the tax to maintain and pay the debt therefore to minimize the debt burden on town residents we must be more creative. The County was unable to provide us revenue information they receive from the various sports organizations that use the facility. We owe it to residents to take back full control and still maintain the services and access to these facilities for all.”
Mayor Kwasi Fraser said, “I keep on hearing little dollars. This is not little dollars. This is taxpayer’s money. Today our taxpayers are paying 3½ cents per $100 of assessed value on the property, just so we can maintain Fireman’s Field and the Tabernacle. We have a debt burden on that field and facility that the taxpayers are paying.
The police station is 4,318 square feet. We are paying $118,000 a year for 4,318 square feet and that is $27.43 per square feet.
The Capital One Bank is 3,089 square feet and they are asking $12,000 per month. That is $46.62 per square feet.
The Tabernacle, where we put $3 million investment [renovations] over a 9-year period – that is an 8,500-square foot facility – the rent that we are getting on it is $31,200 a year. That amounts to $3.65 per square feet. For me to look at the citizens and say you have this prime real estate asset and you are charging $3.65 per square foot – I can’t sleep at night knowing that. That’s not fiscally responsible or prudent.” The most recent IRS 990 form for the current management company of the Bush Tabernacle shows gross receipts of $287,780.
The Town’s Aberdeen Property
The Town Council will also be looking to use outside management for the Town-owned 189- acre Aberdeen property on Short Hill Road. It was purchased in 2009 for $2.19 million and includes two wells, two homes and a small barn. There has been no activity on the property since the purchase and the two wells are not connected to the water plant.
Said Council Member Nedim Ogelman, “We want to release the restrictions that hinder revenue on the Aberdeen property … We have shifted from grow the government and search for tap fees, to looking for ways to be more efficient in our government and in trying to look for opportunities and monetizing some of our assets. We are always balancing a budget that doesn’t depend on developers, but is dependent more on the Town’s other assets. That is exactly what we are addressing … The narrative of growth being the only solution to respond to those kind of issues is narrow.”
Cool said, “There’s been some talk recently about some not sound financial practices and approaches the Town has taken.” He asked the representative from Davenport [financial consultants] if his company felt that “what has been presented here is sound financial practices and will it put the Town in a good position.” The consultant’s answer was “Yes, we do.” Cool asked if Davenport thought the Town was marching from solvency to insolvency, and, he asked, is the Town financially strong? “Yes,” he replied, the Town is financially strong and “solvency is something the credit agencies watch very closely … actions the Council is contemplating … are “financially reasonable.”