The funding for the Lancaster Municipal Stadium, like any large financing undertaken by Government or Private Enterprise involved a variety of sources and financial instruments. A brief synopsis of the original funding plan adopted by the Lancaster City Council October 2, 1995, which is the one used for the actual construction, is presented below in a Sources and Uses Statement format, with explanations of more complicated items immediately following:


Loan from City to LRA * 9,350,000
Available LRA Projects 1,320,000
Seat Lease** 388,000
Open space-parking lot 169,000
Interest 116,000
Land Value (stadium site)*** 2,436,000
Street Improvements-25th West 600,000


Architect 385,000
Design/Engineering 196,000
Infrastructure costs-grading, inspection, utilities 1,020,000
Stadium construction bid 9,154,000
Contingency 200,000
Seating 388,000
Street Improvements-25th West 600,000
Land Value (stadium site) 2,436,000


*The loan of $9,300,000 from the City of Lancaster to the Redevelopment Agency was comprised of two components:

  1. $2,250,000 cash that the City had set aside for just this type of recreation project, and;
  2. $7,050,000 in capital improvement funds.


The Redevelopment Agency issued $7,475,000 of Lease Revenue Notes on December 1, 1995 be used to replace the $7,050,000 capital improvement funds that had been loaned to the Agency above.


Although this added one more level of complexity to the funding of the stadium, it reduced the interest costs from about 9% for a part-public, part-private project to 4.9% for the wholly public projects. Including the letter of credit fees, the annual savings amounts to $233,750, well worth the complexity. Our expectation is that revenues from land sales in the area and/or future tax increment will eliminate these notes in the year 2000.


The annual payments and any fees on the Lease Revenue Notes are paid semiannually from the lease payment from the City to the Redevelopment Agency for the use of the Agency owned Performing Arts Center. The revenues generated from the Stadium, including the lease to the Jethawks, go into the Parks, Recreation, and Arts Department revenue budget, which offsets expenses of the Department.


**The Seats were purchased under a lease-purchase agreement for $388,000. This is a typical financing mechanism for stadiums; leasing the seats initially gives us more control over the quality of the seats and the installation as the manufacturer has a vested interest in our satisfaction. It was our intention to lease the seats for less than one year, and in fact the lease was paid off April 23, 1996.


***This 18.4 acres of land was acquired by the Agency in 1987 as part of a larger purchase at a cost of approximately $325,000.


There has been confusion in the community regarding the use of revenue from the sale of land to the Lancaster Factory Outlet Center. An article in the July 26, 1995 Valley Press mentioned the possibility of using part of this payment, but because of the lower interest rate, resulting in a lower payment, this never occurred. The lower interest rate was the result of market rate drop, and the use of a Letter of Credit enhancement for the issue, which was approved by the Council majority.

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