(The Center Square) – Earlier this week a $1.2 billion bill that contains funding for the stadiums of the state’s two major professional sports teams was signed into law by Gov. Larry Hogan.
House Bill 896 calls for the Maryland Stadium Authority to bond out $600 million for both the Baltimore Orioles of Major League Baseball and the Baltimore Ravens of the NFL as long as the teams sign leases or lease extensions, that is as long as the length of the payback on the bond.
Tom Kelso, chairman of the Maryland Stadium Authority, told The Center Square he sees the funding in the bill as evergreen.
“We don’t anticipate spending $600 million at one time on either stadium,” Kelso said in an exclusive phone interview. “You would get to that level as projects are conceived, developed, and built, but it would take a number of years of upgrading and reinvest. In a larger concept, reinventing portions of the stadium. Every time there is a new bond issue the lease would have to be extended to last as long as the bond for the most recent project.
“It is not a one-time, $1.2 billion expense. It allows the stadium authority to borrow up to $1.2 million. As those bonds are paid down, it creates the capacity to borrow back again.”
Kelso said “the parameter” in the bill is that “the leases have to be either through a new lease or the extension of a current lease.”
In regard to new leases for the city’s two professional sports teams, Kelso said there is still work to do.
“We are not there yet,” Kelso said. “I think everybody wanted to get these bills passed and then see what happens. If they didn’t pass, it would have put us in a different parameter. I think the bills’ passage has changed the relationship between the teams and MSA moving forward.
“My expectation as we get close to bringing this first set of projects to fruition, the leases will be ready to be executed or extensions or new leases have been executed,” Kelso said. “We can do two things at the same time.”
Under the law, according to the fiscal note, the general fund revenues from state lottery proceeds will decrease by an estimated $16 million in fiscal year 2024, and escalate to $32 million in 2025, $48 million in 2026, and $64 million in 2027.
Under the law, the state’s comptroller would be required to distribute dollars from the State Lottery Fund to the Maryland Stadium Facilities Fund in an amount that does not exceed $90 million in any given year.
The bill also calls for $80 million to be allocated to site work, construction, and related expenses for construction management, professional fees, and contingencies. Plus, another $195 million is earmarked for site acquisition and preparation, relocation, demolition and removal, and construction and related expenses for construction management and professional fee and any contingencies for the stadiums.
Kelso said the bill will work in a way to avoid what he calls a lease expiration cliff, where a hard deadline is in place as the bond expires.
“We are constantly looking at how we can make the next investment in the stadium to keep them in the top-notch shape infrastructure-wise,” Kelso said. “But we are also providing a unique fan experience to keep them coming back.”