DALLAS — The Houston suburb of Sugar Land will build a 7,500-seat minor league baseball stadium with proceeds from next week’s $30.1 million competitive issue of sales-tax revenue bonds.
The bonds will be sold March 15 by the Sugar Land 4B Corp. The issuer was established by Sugar Land in 1995 after voters approved a 0.25% sales tax to finance economic development efforts.
Work will begin on the facility soon after the bonds are issued, according to Doug Adolph, the city’s assistant communications director.
“The City Council selected the contractor for the stadium on March 1, and we have a ground-breaking ceremony set for next month,” Adolph said. “The stadium will be ready for opening day of the season in spring 2012.”
The sales tax bonds, which will mature in 2024, are rated Aa3 by Moody’s Investors Service and A-plus by Standard & Poor’s.
Andrews Kurth LLP is the corporation’s bond counsel. First Southwest Co. is the financial adviser.
With the sale, the corporation will have $44.4 million of outstanding sales tax bonds.
Revenue from the sales tax totaled $4.7 million in fiscal 2010, a 4.6% drop from fiscal 2009. Sales tax revenue grew 7.4% annually from 2005 through 2008, but was up only 1.6% in fiscal 2009.
Collections are up 2% so far in fiscal 2011, with the city expecting total revenue for the year to be 1% over the budgeted total.
Voters approved the stadium project in November 2008 as part of a cultural entertainment district near the University of Houston campus in Sugar Land, but the proposal never got off the ground.
“Negotiations with the University of Houston did not result in a baseball stadium in that location,” Adolph said. “The stadium will be near Sugar Land Regional Airport, where a large private redevelopment in the area will include a mixed-use commercial and residential area.”
A cost-benefit analysis of the stadium project by Conventions, Sports & Leisure International said it will generate $7.7 million of economic activity in the city each year.
The stadium will be operated by Opening Day Partners, which will retain all the revenues from the facility. The city will receive $80,000 a year for the 25-year lease.
The facility will be the home of the new Sugar Land Skeeters of the Atlantic League.
Adolph said residents have been asking for more cultural amenities in the city, and the ballpark will help fill those needs.
“This was something that was really missing,” he said. “Our citizen surveys have shown that for years and years, this was one area that needed improvement. We have good infrastructure and a dynamic retail and commercial sector, but the residents wanted something more.”
Mayor James Thompson said he was looking forward to being in the stadium for the first pitch of the 2012 season.
“A city’s work is never finished,” Thompson said. “With this stadium and baseball project, we’ve done something that will continue to impact future generations.”
Sugar Land is located 20 miles west of downtown Houston. Its general obligation debt is rated Aa2 by Moody’s and AA-plus by Standard & Poor’s.
