As the Omaha Storm Chasers start their seventh season at Werner Park in Sarpy County, sponsor support and ticket sales are strong. About 2.7 million fans have visited the ballpark west of Papillion since the stadium opened in 2011. Attendance is steady. The Storm Chasers are happy.
But one thing hasn’t materialized: corresponding development. The land around the ballpark remains mostly vacant. And now that lack of development has culminated in a bankruptcy filing by the subdivision surrounding the ballpark.
The subdivision, called Sanitary and Improvement District No. 290, is more than $12.8 million in the hole after building roads, sewers and other infrastructure for the land surrounding the ballpark, at 126th Street and Nebraska Highway 370. It filed for Chapter 9 bankruptcy on April 14.
Chapter 9 is the part of the federal bankruptcy code that allows municipalities and other government entities such as SIDs to seek reorganization of their finances under court supervision.
Martie Cordaro, president and general manager for the Storm Chasers, said the bankruptcy won’t affect the team.
“There’s no major concern,” he told The World-Herald on Wednesday afternoon.
Sarpy County and Papillion officials also say they are unconcerned. The impact will fall on the SID’s investors, but the county and the city are insulated from the subdivision’s financial woes.
A bankrupt subdivision, however, is hardly the grand vision that city and county leaders had for the land surrounding the ballpark back in 2011. Werner Park would spur a neighboring entertainment district, they hoped. There would be a movie theater, bars, restaurants and shops. Fans would have a reason to come hang out before baseball games or stick around after.
Six years passed. The fans showed up. The development didn’t. Today, the ballpark sits amid empty fields.
Without that development, the SID has little property tax revenue, not enough to pay off its mounting debts. Within the past few years, the subdivision went to the Sarpy County District Court to get a judge to extend the debt payment schedule. A nearly $8.5 million payment was pushed to 2019.
“It’s not good, but it’s not a death blow,” said Dan Hoins, Papillion’s city administrator. The SID is outside city limits but inside Papillion’s zoning jurisdiction. The city extended water and sewer lines out to the subdivision, but it has since paid that off.
“It’s not the first SID to go bankrupt, and it probably won’t be the last,” Hoins said.
Hoins said the city maintains its entertainment district goal for the area. Over the years, interested businesses have come knocking. But they weren’t in line with that entertainment district goal, so they were turned away by city planners.
Today, there are no pending applications for developments in the SID, he said. But there is “significant discussion.” And the bankruptcy won’t hinder that, he said.
Sarpy County officials also said it’ll be “business as usual” despite the bankruptcy.
The county spent about $29 million to build the ballpark with the expectation that accompanying private development would spur property and sales taxes to help pay off the debt. But even without that revenue, the county has been able to pay its debt through other means — rent from the Storm Chasers, a stadium naming-rights agreement with Werner Enterprises, surcharges assessed on sales of tickets and concessions, and county lodging taxes, said Brian Hanson, the county’s fiscal administrator.
“It shouldn’t really impact us,” he said Wednesday.
The financing of the stadium is not dependent on the development of the SID, Hanson said.
SIDs have government powers to sell bonds and levy taxes to develop land; they are run by a board elected by the district’s property owners.
SID bankruptcy is not uncommon. Since 2010, 15 SIDs in Nebraska have filed. In the past five years or so, they have been caused by the SIDs’ locations, said Vince Leisey, a real estate developer and president of Berkshire Hathaway HomeServices Ambassador Real Estate.
During the next two to three years, the negative connotation accompanying bankruptcy may cause people to shy away from building in the area around Werner Park, Leisey said. However, he doesn’t expect that to last.
“Over the long haul, it’ll be OK,” he said.
SID 290 board members didn’t respond to phone calls Wednesday. In August, John Bachman, the attorney for the SID, told The World-Herald that commercial real estate projects would be needed to dig the SID out of its hole. Bachman was traveling on Wednesday and couldn’t be reached.
But federal court documents indicate that the SID is banking on growth to get out of debt.
“It is expected that continued and future construction will allow the district to pay most of the principal amount of its debts,” a disclosure statement says.
A plan for repayment projects that the SID’s taxable land value will grow by $25 million every few years over the next 15 years.
Development will eventually come to the site, Leisey said. It’s just a matter of when.
“In time, it will be a great location,” Leisey said. “But it was a little before its time.”