I caught the wind of a dream in 2008 and rode it for six years, all the way to a conditional commitment on $40 million in financing for a sports resort project in Carolina. When I initially hopped on board I never expected to become as invested as I did. But as they say, “Nothing ventured, nothing gained.”
Sport is a vital engine in the United States, as the youth and amateur sports marketplace represents over $7 billion in total economic impact in the country.
At one point, SportsEvents Magazine cited studies indicating that there was a growth of 6.8% – or $450 million – in the impact of direct spending in the sports event industry in 2011, and 78% of destination groups surveyed projected another increase in 2012. It was even reported that athletes were spending $705 per competition.
Meanwhile, the Sports & Fitness Industry Association had noted that nearly 70% of children between the ages of 6 and 17 were involved in team sports and three out of four teens were now playing at least one team sport. In 2010, participation among 13 and 14 year olds increased 22% and 14% respectively, versus 2009.
When it came to capturing that audience and its dollars, perhaps there was no better organization than a multi-field baseball complex in New York. Founded in 1997, this 22-field venue was ahead of its time, and the model had continued success year after year. While doing some research, I pulled in numbers that showed a 96% capacity rate for the previous three years, with the top five states sending teams being New York, California, Illinois, Georgia and Florida – five states that don’t exactly share a similar geographic location. Other similar complexes have popped up in that area over the years, and each has had success it their own right.
Surely there was an opportunity in this industry.
The Game Plan
This vision grabbed my attention and focus pretty quickly. I was enamored with the idea of being part of something bigger than me, a venue that seemed the culmination of my fairly young career up until that point. I was intrigued by the team, as well.
We were proposing a state-of-the-art $350 million venue in Jersey that would offer a host of sports-related and recreational activities and special events, including programming in tournaments, showcases, leagues, camps & clinics, sport management education and special populations.
It was a concept designed for athletes of all ages, income levels, backgrounds and conditions. We also planned a support system of a variety of services and multiple venues to address the needs of developing and aspiring athletes, as well as their families.
A major leisure firm projected that the venue would draw thousands of participants both regionally and nationally, with strong international potential as well.
In addition to the sports facilities, the plan featured accommodations for the entire family, including a 4-star hotel, restaurants, conference center and an indoor and outdoor waterpark. We really hit it out of the ballpark with this plan, as feasibility studies indicated the hotel and waterpark venue will be an attraction in and of itself, and could succeed without the sports component.
It was summer of 2008 when I was invited to be part of this group. When I got into this pursuit, I was under the impression that financing was imminent. It was originally just supposed to be a job, but it would turn into something more involved. Looking back, I like to quip that we were three weeks away from funding for four years. In that time, I never lost sight of our goal.
It wasn’t until 2012 that we finally had our first real chance to push this thing across the finish line. With some seed capital from an investor, we locked up a few land contracts and opened our first office on site. There were only three of us that made the move to Jersey out of a team of about 15 people. We also had a fourth person join us in the trenches. One of the land owners took on an advisory role and worked with us on a daily basis.
It seemed a nice mix of everything we needed. There was the visionary and voice of the project who would see the big picture. We had a financial pro who spent time at the senior levels of Fortune 100 companies. I had my hand in a lot of roles in my career, so I would work in the details. And, perhaps most importantly, we had the land owner who was a well-respected businessman in the local community.
Those first months in Jersey were exciting. We were quick to forge a great working relationship with the investor and his development team. Soon after came effective meetings and great connections with architecture groups, waterpark designers, medical providers, media relations representatives, site surveyors, traffic professionals and Web partners. Not to mention some strong support, both through resources and finances, that were at our disposal from the city, county and state. Plus, we still had our entire team cheering us and providing input from afar.
While we were walking in our respective strengths and complementing each other, we had success at our fingertips. This could have easily been our strong suit, instead it would prove to be our biggest challenge.
We constantly faced the reality of this project, as well. For one, it served a growing industry and was a viable project from a market feasibility and economic impact perspective. And two, it was very expensive.
Even with everything that was accomplished, soon we would reach a point when operational capital became scarce and the office was funded on a month-to-month basis. Money has influence… over things like timing, scope, strategy and personnel. It’s still a great project; it just has a path of its own.
Calling an Audible
With consideration of all the time and resources spent pursuing a sports resort project, it became increasingly apparent I couldn’t walk away easily. So I buckled down and took an even greater risk in chasing after a smaller-scale sports resort, one that was specific to baseball. I didn’t leave the Jersey project, though. Instead, I was hopeful that both projects could exist together, under one banner. But first, I needed to secure the smaller one.
When I had read in a Carolina newspaper that the effort was stalled amidst a struggle of its own to secure financing, I reached out to see if I could help. I ended up with chance to do more than just help.
From that very first meeting, the opportunity was there to not only seek financing for the project, but to buy it as well. With an overall price tag of just under $40 million, I wasn’t too daunted considering I had been with a group on the hunt for $350 million.
Ten months into pursuing this Carolina project, I would finally reach a point where I was on the cusp of success. To put it another way, I was close but not close enough. However, to have on my desk a conditional commitment on $40 million in project financing was no small feat.
To my benefit was a good relationship with someone in the area who was able to introduce me to the right person. From there, it was just about nailing that first meeting. I pulled in the finance guy as a partner, then we picked up some additional support from that team and enlisted a top-flight broker to help seal a deal.
The star of our effort was the project itself. It was beautiful on paper: multiple fields, bunkhouses for players, venues for concessions and merchandising and plenty of land for growth. The plan itself was pretty much identically-patterned after that complex in New York.
Down at the One
With a proven business plan for a shovel-ready project in hand, all we had to do was fund it. We trudged through conversations with multiple funding sources, with one source in particular grabbing our attention and focus.
For a group that, up until that point, had only put a nominal amount of cash out to pursue this Carolina project, we saw little issues with taking on some larger financial burden. Our first order of business was agreements with brokers. Then, we hired an Arizona-based investment advisory firm to customize our business plan and financial model for the source.
One of the key items that was considered in the plan was the value of the project as operational. If the financial model put that number above the amount we needed in financing, we’d be in good shape. And, thankfully, we were in good shape.
By Thanksgiving of that year we’d receive that conditional commitment. The financing was to come through the sale of credit-enhanced bonds. It was a program that ran through the Treasury and was backed by a major, multi-billion dollar organization.
We knocked out the list of conditions with ease, until we got down to one last condition. Add to the challenge a deadline that loomed, and we were left scrambling. We simple didn’t have the best understanding of this piece of the puzzle, and as it turned out we missed on months of being able to get ahead of this issue. It had to do with our burden during the bond process.
We went down to the 11th hour on this, and even scored an extension of the deadline. But in the end, we came up just short.
By spring of 2014, though, there was little wind left to ride. The Jersey project was still proposed but the office had shut down and there seemed little movement on the project’s financing. There was no longer any significant level of communication, either. In Carolina, the project was canceled completely. I keep reminding myself that both suffered the same fate of many projects of that magnitude.
For me, personally, I was completely spent. Come April 30, 2014, it was time to focus on other things, and to regroup and catch another vision for another season.
Reviewing the Film
When I look back on this experience, there are several things that come to mind. I was fortunate to be a part of items integral to both projects. Some of my top takeaways from this time are:
- Business Planning: The Jersey plan was always a living document, and to be able to tackle the project from both empirical and creative angles was a learning experience. For Carolina, the concept was sound and based on an existing model, so it just boiled down to customizing the plan to serve a particular funding source.
- Research and Studies: I supported an Ohio-based leisure firm with market feasibility and economic impact studies. It was an opportunity to get under the hood of not only the project but the region and industry as well. Also in this research, we were given a good indication of what event models were best supported.
- Financial Gurus: Brokers were key to our hopes for success. Navigating this part of the funding process was challenging (the Columbus and Detroit incidents come to mind), but we were fortunate to eventually find really strong advocates for the projects.
- Web Presence: I managed the Web presence for both projects, and in Jersey took a strategy into the marketplace and put the project out for bid. We had needed a site that could deliver such things as news and information, event registration, e-commerce, live streaming, etc.. We would ultimately contract with a Minnesota-based outfit.
- Team Services: With input from personal relationships throughout the sports industry, we were able to put together a comprehensive plan for a team services department that would function as a sales office to recruit youth sports organizations to come to Jersey for tournaments and events.
- Brand Building: The popular thought was that the original name on the Jersey project didn’t resonate best with the brand. After a brand evaluation we went in a different direction. Not coincidentally, the names of both projects would then have a similarity.
- Relationships: One of the best experiences is sharing in a vision with other people. To work beside others to accomplish a shared goal is a great way to do life. Too many good relationships were formed over the years.
- Out of the Box: Shortly after setting up shop in Jersey, we came out of the box strong with a string of public events, including a press conference, planning board meeting and special Chamber luncheon. For a county that was experiencing nearly 14% unemployment, the project was a shot in the arm.
Of all the lessons ingrained in me now, the biggest one is that ambition has a real cost. This will mean different things to different people, and the price to pay will vary depending upon what the end goal is.
These were six years that were atypical of most of the people I had around me. Too much time was spent working independently as a consultant, contractor or fractional manager. I also took to living small to absorb this cost. At one point I spent my nights sleeping in an attic. And in Jersey? Well, that experience comes with a ghosts and dirty water, as well as mice and earwigs.
Then there was the money. It’s hard to look back on those six years and not add up the money lost, the money foregone and the money deferred that will never see my bank account.
Do I regret any of this? Not at all.
A venue nestled away in New York is the inspiration for the effort in Jersey, and tied closely to the Carolina project. This feature really brings out the power of youth sports and the potential of a destination resort.