The Finance Committee of the Winston-Salem City Council on Monday unanimously endorsed a new lease arrangement that would make a major cut in the amount of annual lease payments the Winston-Salem Dash makes to the city.
The team lease payment would drop from $1.55 million to $750,000 initially, and an annual ticket surcharge the city gets — to the tune of $175,000 — would be eliminated. The changes would force the city to dig into reserves to continue paying off the city's stadium debt of $20 million.
Winston-Salem Mayor Allen Joines said the city has to reduce the lease payment or risk losing its minor-league team. Joines said that 40 cities are losing their teams, and that Winston-Salem doesn't want to be one of them.
The question, Joines said, is whether "the city wants to be stuck with an empty baseball stadium."
Joines said the new lease is being structured in a way that will allow the city to more than recoup — over the long haul — the money lost from lowering the lease and eliminating ticket surcharge payments.
The city pays its debt on the stadium from lease payments and the other revenues from the team that were to total about $1.8 million in 2020 and be put into a special fund for that purpose. The Dash is an advanced Class A affiliate of the Chicago White Sox.
In early December, it was reported that Major League Baseball, in a restructuring, had decided to cut some 40 minor-league franchises and reduce the number of teams to 120.
At that time, it was reported that the Dash were one of the teams that would be staying in place, but city officials say they're sure that outcome depends on changing the terms of the lease to give the team lower payments.
Robert Clark, the chairman of the city's Finance Committee, called the deal a difficult one, but said that the downsizing of minor-league baseball "is real."
"Trenton, New Jersey, is the capital of New Jersey, and they have just lost their team," Clark said.
Council member Jeff MacIntosh said that Winston-Salem and Greensboro stand a good chance of playing in the same league under the new alignment, and that the cross-Triad rivalry would be good for ticket sales.
Under the stadium lease proposal, the team's lease payments would start at $750,000 a year and gradually escalate by 1.99% annually. By 2036 the team would be paying around $1 million per year.
The city originally contributed $12 million to the stadium project after it was approved in 2007, but in 2009 had to invest another $15.7 million at a time when construction had been stalled for months.
The city became the sole owner of the ballpark and leased it back to the Dash for a 25-year term.
In 2014, the arrangements were restructured so that new investors infused $7 million into the project. The city provided $13 million to pay off a construction loan the developers had incurred. The lease term was extended to 2039, and lease payments were increased to cover the new debt.
Now, the city is proposing to extend the lease again, this time to 2046. That gives the city five years of lease payments after the debt is paid.