Yahoo Finance Stadium Bond Sales Revive as Minor League Baseball Shuffles Deck
(Bloomberg) -- The new look of US minor-league baseball took a curtain-call last week as Spartanburg, South Carolina, sold bonds to build a stadium for the Hub City Spartanburgers, a Low-A level affiliate of the Texas Rangers.
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Spartanburg, a city of 38,732 in the upstate region of South Carolina, sold $63.8 million in revenue bonds to build the 5,000-seat Fifth Third Park stadium, which is slated to cost $100 million and open in time for the 2025 season. The bonds are backed by a mix of rent, fees and taxes. The city and county are contributing another $59.4 million to the project.
Minor league baseball is still recovering from the lost year of 2020, when the pandemic shut down the season and Major League Baseball cut the size of the minor leagues by more than 40 teams to 120, and then told the rest to replace or upgrade their stadiums. In 2023, sales of municipal bonds for sports facilities tripled, to $1.8 billion, according to data compiled by Bloomberg.
The Spartanburg deal was the second offering for a minor-league stadium sold last week. South Bend, Indiana, also priced a previously-announced $44.9 million of revenue bonds to refurbish Four Winds Field at Coveleski Stadium for its Chicago Cubs affiliate.
The Spartanburg deal is illustrative of what’s happening in the sport. In 2023, the Rangers sold the Hickory, North Carolina, Crawdads and the Down East Wood Ducks, who play in Kinston, North Carolina, to Diamond Baseball Holdings, which now owns 34 teams and says it isn’t done adding to its portfolio. The company, founded in 2021, is owned by private equity firm Silver Lake. The Wood Ducks are playing the 2024 season in Kinston and will move to Spartanburg in 2025.
“The move of the Wood Ducks is not a surprise,” Ballpark Digest reported in May of 2023. “It was determined that it would be too costly to upgrade Kinston’s Grainger Stadium,” which opened in 1949.
Diamond Baseball Holdings didn’t reply to a request for comment.
“The stadium will help drive economic activity in the city’s downtown and is spurring $305 million of private investment in the surrounding area,” Moody’s Ratings said in rating the stadium bonds A1. This includes a couple of office buildings, a hotel, and multifamily housing, according to the bond offering documents. Spartanburg officials didn’t respond to a request for comment.
“Generally speaking, stadiums are not an engine of economic development,” said Andrew Zimbalist, a professor of economics at Smith College. “It depends on what other kinds of surrounding investments there are.” He said that having a minor league team provides a municipality with social and cultural benefits.
“Having a wholesome form of family entertainment is a good thing,” he said.
--With assistance from Sue Lucas.
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