Early in the summer I expressed concerns about this contract in a blog post here. The original plan gave the Sox exclusive use of the space for $20,000 a year. My estimates showed that this rental amount would not even cover the annual costs for this space.
In response to my comments, the Glen Ellyn Park District did re-negotiate the Sox contract. The new version shows that the Glen Ellyn Park District may receive another $12,000 a year in revenue sharing, depending on the number of lessons the Sox sells. Because of the new negotiations, Glen Ellyn Park District residents will also receive a 5% discount on these programs and lessons.
The new contract also gives the Glen Ellyn Park District access to the batting cages four hours a week in exchange for the Sox receiving four hours of free access to half of the turf field. The version of the contract that were expected to vote on at our last meeting erroneously stated that the GEPD would pay the Sox for the four hours of batting cage access instead of exchanging cage/turf time. This would have resulted in the Glen Ellyn Park District paying the Sox more money for 4 hours of cage use per week than the Sox pays the Glen Ellyn Park District for the other 164 hours a week. I pointed out this problem at the last meeting and the new version of the contract has resolved this issue.
What hasn't been resolved is the fact that this is still a bad deal for the Park District. In order to recover our initial capital investment, the Glen Ellyn Park District would need to receive at least $75,000 in profit each year for 11 years. We are subsidizing a for-profit company and will never recover our initial capital investment. With the revised contract we will at least make a small profit over our operating costs. This is a small step in the right direction, but not enough. In the future we need to ensure that sufficient benefit to our community exists to justify capital projects before we undertake them.
I am appalled at the lack of sanity and business sense on the PD board. We need more 'business saavy' members than just you and Julia.
ReplyDeleteSomewhere out there, Jerry Reinsdorf is laughing at us.
ReplyDeleteThe commercial real estate market puts the value of the Sox Academy space at about $6 per square foot, which nets out to about $38,000. How does the PD settle for only 20k with the possibility of another 12k? Why wasn't this space open for bid to other businesses? Who on the board is in bed with the Bulls Sox Academy that they would get this space on a silver platter? The whole thing stinks..
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