When President Donald Trump declared a national emergency because of the COVID-19 coronavirus pandemic on March 13, that could have caused dire problems for financing of the $171 million Spooky Nook Sports Champion Mill indoor sports complex.
The emergency declaration alone could have allowed purchasers to walk away from buying $97.6 million in bonds that were sold the following Friday (March 20) for what is to be North America’s largest indoor sports complex, along with a hotel and convention center.
The facility, in the former Champion Paper mill along North B Street in Hamilton, is to open in late 2021.
“There are certain provisions in a bond purchase agreement that allow an underwriter to walk away from a transaction,” said Andy Brossart, the city’s financial adviser, who has spent five years on the project’s complex financing arrangements.
Those walk-away clauses include acts of war, terrorism, national emergencies, and other things that can lock up the financial markets.
“I thought for sure we’d walk in the next (business) day, and the investor was going to walk out,” said Brossart, 47, a Badin High School graduate who felt particular pressure during the week because he knew how important Spooky Nook can be for his hometown.
City Manager Joshua Smith agreed there were nervous days.
“Putting the final financing pieces of the puzzle in place during a worldwide pandemic was stressful,” Smith said. “I’m thankful for all the partners in this project who stayed the course.”
Brossart believes Spooky Nook can be as significant a development for Hamilton and the county as the Butler Regional Highway, Ohio 129, was for the city when 20 years ago this past December, it linked the Butler County seat to I-75, in fulfillment of a decades-long dream.
The bonds were successfully sold, an apparent indication of the confidence the investors have in the project, despite the likelihood of a significant economic downturn. One reason they likely were bullish on the sports complex is that experts say even during difficult financial times, families will continue to take their young athletes to compete in sports tournaments.
On some weekends, 10,000 or more athletes and their families are expected to travel to Hamilton from several-hour drives away.
Officials from one of the purchasers, Dallas-based Preston Hollow Capital, were unavailable to comment on why they moved forward in their part of the investment.
Brossart offered his take on why the investors didn’t back away. For one thing, the investors visited the existing Spooky Nook facility near Lancaster, Pa., which is temporarily closed because of the virus.
“They really did their due diligence, did site visits, had interviews of Sam (Beiler, Spooky Nook owner),” he said. Also: “I can’t say enough the job the city did the job the day they had the investor meeting in town. They absolutely crushed the interview. I think it really does show (the investors’) belief in the project, Sam and the city.”
Big Benefits Expected
Spooky Nook will be a significant jolt to the economy of the city and county, and can help both weather the financial difficulties caused by the coronavirus crisis, Brossart said.
“It rivals the cost of the highway coming to Hamilton,” he said. “It’s probably one of the largest economic development projects I would say the city has ever seen. That’s direct investment right in the city boundaries.”
With the new project price tag of just under $171 million, the Spooky Nook project has almost the same cost as Ohio 129 was 20 years ago. Officials listed the highway’s cost at $165 million, but when land purchases and design costs are included, that project’s total cost was in the $170 million-to-$172 million range, said Butler County Engineer Greg Wilkens.
Wilkens and Butler County Economic Development Director David Fehr said the regional highway’s impact has been quite significant, spurring new housing subdivisions and economic development in areas like Liberty and Fairfield townships, as well as Hamilton and areas of the county west of the city.
“It’s had a huge impact for Butler County just because it opened up areas of Hamilton for development, certainly in my mind things like the Bridgewater Falls shopping center in Fairfield Township probably doesn’t happen without a regional highway being there,” Fehr said. “And obviously, a lot of the subdivision development that occurred in Fairfield Township, Liberty Township and West Chester along the highway is pretty evident.”
It’s hard to speculate on what might have happened without the regional highway, Wilkens said, but without it, “I’m not so sure Liberty Center would be there. Bridgewater (Falls) may or may not be there. A lot of the other development around the corridor may or may not be there.”
“There’d surely be a larger traffic-impact problem, no doubt, without 129,” Wilkens said. “That and Union Center (Boulevard) have been great economic boons to this county.”
As for Spooky Nook, “It’s sure to be a big economic generator, there’s no doubt,” Wilkens said. “It’s going to stimulate a lot of traffic in and out, so that makes it a very important project.”
Helping cushion from recession
Smith and others say the project will help Hamilton and the county fare better during the difficult economic times ahead.
“Now that the project is completely financed, it will create hundreds of construction jobs which will be a huge benefit to our small businesses in terms of hotel stays and restaurant, bar and local retail visits,” Smith said. “There certainly will be a financial hangover when the COVID-19 cloud lifts, so we need to come together as a community to support our local business community in the next 12-18 months, and this project will play a significant part in that.”
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