LA PLATA, Md. - The Charles County Commissioners on Thursday unanimously agreed to enter into agreements with Skanska USA Building, Inc. that will officially begin construction of the Southern Maryland Stadium and Entertainment Complex near Waldorf, Maryland.
Following the Commissioners’ May 23 decision to start the project and issue an intent to award and notice to proceed, Skanska is already mobilizing to begin construction on the Piney Church Road site.
Skanska submitted a bid in the amount of $19,250,000 to build the stadium. The total project cost is $25,650,000. The work is to be completed within a year, during the 2008 baseball season which begins next spring. As construction progresses, the complex could be available for community events early next year. Financing for the stadium will be split three ways with Charles County, Maryland Baseball LLC, and the State of Maryland, with the County share approximately $8.5 million.
At Thursday's meeting, a majority of the Commissioners also approved financing plans for the project which are designed to effectively manage the County’s liability and risk during construction. The Commissioners approved an amendment to the County’s July 18, 2005 concession agreement with Maryland Baseball which will make the County’s low bond interest rates available to Maryland Baseball for the financing of its share of the project, instead of standard commercial rates. In return, Maryland Baseball will contribute the approximately $1 million in lower interest savings into the contingency fund for the project, which will increase to approximately $1.5 million. Maryland Baseball will make payments to the County for 15 years to retire their share of the financing for the project. Commissioners Cooper and Patterson voted to deny the proposed financing plans.
The Commissioners say that by using this approach, additional funds will be available to the County during the next 12 months to respond to any unanticipated increases in the cost of construction, or any shortfall in the final installment of State funding for the project, which is expected to be approved next spring during the 2008 session of the Maryland legislature. In the event that any funds remain in the contingency account after construction is completed, they will be used to reduce the County’s share of the project.
In developing this financing strategy, say the Commissioners, the County has evaluated the financial position, outstanding track record, provisions of the concession agreement with Maryland Baseball/Opening Day Partners, and additional agreements that will be put in place, and is satisfied that adequate security will be in place to protect the County’s interests during the construction of the new facility, and throughout the term of the bonds. The stadium and entertainment complex will be entirely owned by the County when completed. As an added measure of protection, Maryland Baseball will secure a letter of credit equal to the full amount of one year’s payment of debt service to the County, which the County can redeem on call at any time throughout the 15-year payment period of Maryland Baseball’s share of the stadium financing.
The Commissioners also say the County will continue to explore the possibility that tax-exempt bond financing could be available to cover part or all of the County’s share of this project, at an even lower interest rate. Some recent stadium projects have been eligible for tax-exempt financing. If this is determined to be a viable approach by the County’s financial advisors, it will be pursued, say the Commissioners.
An official groundbreaking ceremony is being planned for later this summer.
Source: Charles County Commissioners