Loan or grant? That’s the $1.5 million Sussex Sports Center question

GEORGETOWN – Grant or loan?

Not the $64,000 question, it was a $1.5 million question kicked about Tuesday as Sussex County Council considers a partnership with the Sussex Sports Center Foundation on a multi-pronged sports complex that foundation members say someday could be the foundation for a county-based parks and recreation program.

Sussex Sports Center Foundation members in early October asked the county for $1.5 million in financial support for the approximate $4 million complex just north of the CHEER Community Center off Sand Hill Road.

County councilman George Cole presents his loan suggestion in the Sussex Sports Center Foundation’s request for $1.5 million in county support.

County councilman George Cole, R-Ocean View, has heard concerns about the lack of a county-based recreation program during this many years on council.

“When I was first elected a few years ago I was concerned about the lack of county rec programs. And over the years I have decided there is some charm about us subsidizing existing programs,” said Mr. Cole. “And we do take pride in our low, low taxes. We do provide very few services. You get the services other ways. So, with that in mind … maybe instead of a grant, why don’t we give you a loan? And the loan is like a zero-percent interest loan. And we stay out of the business of operating this thing and keep arm’s-length distance from it.”

“So, if it were a $1.5 million loan; loans would usually have to get repaid,” said businessman Joe Schell, a member of the foundation during the Nov. 14 update presentation to council. “This facility won’t make enough in my view in a short period of time to begin paying back principle on the loan. It can be dressed up as a loan as far as I am concerned. That’s fine.”

The foundation is proposing to build the sports complex on 57 acres. It will have eight full-size Bermuda grass athletic fields accommodating soccer, lacrosse, field hockey and touch football, walking trails, a certified cross-country course that could host conference-type competitions, eight pickleball courts and other amenities.

Mr. Schell is donating the land for the facility.

The foundation’s mission is to “create and maintain a first-class athletic complex.”

Joe Schell of the Sussex Sports Center Foundation updates Sussex County Council on plans for the proposed facility.

“All of this is for the enjoyment of the people of this county and the sports clubs of this county,” said Mr. Schell. “We think this is an important addition to all the many amenities we have in Sussex County; great schools, great beaches. But we don’t have great places to play for youth soccer, lacrosse … they pick and choose to find places where they can play. Other counties have much more public facilities.”

Should the county ante up $1.5 million in the partnership, the foundation has said it would offer the county an option to buy the complex for a mere $1 at some point down the road.

Mr. Cole concurred the facility would be a wonderful addition, saying it would have an economic and provide services. “There is going to be an added value to the quality of life here in Sussex County. All of that stuff is all true, I believe it all,” he said. “It is going to provide activities for all ages. The private/public partnerships; I think the county has a reputation of working in those areas with like the James Farm, the Inland Bays and stuff like that. And city/county partnerships, I think that is part of our job and we ought to be looking at that.”

But he favors a loan over an outright grant.

“I think we could get to the result that you’d like to see quicker if there was some detachment from us being involved too much and keeping us out of it,” said Mr. Cole. “I would prefer that the government side of it doesn’t get involved in the private side in telling you how to do it. I’d rather you all risk your capital and make the decisions.”

Everett Moore Jr., the county’s attorney, chimed in.

“A mortgage presumes that there will be some kind of repayment. That is not what has been discussed at this point, that there would be any type of repayment except the economic value to the community,” said Mr. Moore. “So, dressing it up as a loan I’m not sure gets you what you desire because at some point also with a loan you have the end date. And if it has not been paid back then there is a foreclosure action. And you are not looking at any type of foreclosure action in this.”

Mr. Moore suggested a possible option would be some sort memorandum of understanding between the two parties with terms that keeps it “arm’s length” with the county.

Council president Michael Vincent, R-Seaford, asked Mr. Cole is he was talking about the county “providing this $1.5 million with zero interest but at some point in time they’re going to pay us back that money, or are we going to give them that money and write it off … are you expecting payback?”

“It’s like economic development loans we have made in the past,” said Mr. Cole. “I know that some things are forgiven over years by different institutions and stuff like that. I am not suggesting that we do it. I would just suggest that we sit down and see if we can up with some terms that both parties would think are workable. And again, a future county council can always change it.”

“Mr. Cole, I can tell you as vice chairman I would not be in agreement with a loan,” said foundation member Bobby Horsey. “No way shape or form would our side of the equation be in favor of a loan. This is what we are asking you guys for: to believe in their citizens and invest in their community … and develop a first-class park.”

The foundation’s game-plan is to submit plans by the end of this year with construction starting in February or March of 2018. Seeding of fields would be done next June and July. The tentative opening of the facility would be spring 2019.

Revenue would come from some tournaments as well as requests by clubs such as pickleball and soccer for specific field/court reservations for practice/games.

Mr. Cole made his loan pitch to the town of Georgetown, an in-kind partner in the proposal. “Maybe we loan it to Georgetown,” he said.

Georgetown Mayor Bill West stands as he and Kathy Casey, seated at left, president of the First State Pickleball Club, and Susan Brooker, United States Pickleball Association ambassador/Delaware Senior Olympics pickleball coordinator, listen to an update on the proposed Sussex Sports Center.

Georgetown Mayor Bill West was somewhat reception.

“A lot of our loans, that’s what they are they are, interest forgiving loans where we pay the payments out to a certain year and then the loan is forgiven,” said Mayor West. “I think it’s a great way to do business.”

County Administrator Todd Lawson was confused by the loan/grant scenario.

“I don’t necessarily understand the benefit of loan versus a grant. If we’re calling it a loan when there are no strings attached there is really not a loan. It’s really a grant and that was the original intent, I think,” said Mr. Lawson. “Now, if there are things, questions or concerns, or the relationship between us and the foundation, I think it could be worked out in an agreement if in fact the council seems poised to continue in this discussion and move forward. I think the agreement of the MOU would be able to put any kind of conditions and promises that would make it comfortable.”

Itemized financial support sought by the foundation includes $2.5 million from the private sector and $2 million from the county, state and town of Georgetown.

The total $4.5 million includes a $550,000 reserve fund. That’s an increase of $200,000 from the previous presentation, Mr. Schell said, due in part from savings by having the facility’s staff/groundskeeper handle field mowing rather than outside contracting.

Town of Georgetown

Mayor West said the town of Georgetown, with $13.8 million in debt from water and sewer upgrades and a new town hall project is really in no position to ante up a large sum of money for this project.

“My debt service is a $1 million a year,” Mayor West.

The town of Georgetown through its council, planning commission and board of adjustment has supported the effort through approval of adjustments in parking space size and entry as well as impact fees.

“We’re going to take care of the dumpster. We’ll cut grass out front. The biggest thing we are going to do is provide police protection for events and traffic control at the end of and beginning of events. These are things we are committed to do on a regular basis,” said Mayor West. “All of this is well above $25,000.”

Intersection upgrade

Coinciding with the sports complex project is a pitch to address the traffic bottleneck at the Rt. 9/Sand Hill Road/Airport Road intersection.

The foundation is in negotiations to purchase two parcels and donate them to the Delaware Department of Transportation.

The purpose of those donations “is to improve that intersection, which I think we all know is a little bit of a headache,” said Zac Crouch of Davis, Bowen and Friedel.

Mr. Crouch said DelDOT is considering a four-way intersection or a round-about.

DelDOT has applied to the federal government for a $7.5 million grant for the intersection upgrade. Grant recipients are expected to be announced in April 2018, Mr. Schell said.

“I think they realize this an intersection that has to be fixed; the sooner the better. If CHEER builds more, if Sussex Academy expands where it is currently, the county airport picks up more activity … there is going to be more and more pressure on that,” said Mr. Schell. “Obviously, if we get $7.5 million from the federal government we are all happy campers.”

Portable restrooms to start

Construction plans at present do not include permanent restroom facilities, although they could be added in the future. Port-a-potties will be used initially.

Councilman Irwin “I.G.” Burton again expressed his displeasure.

“A first-class facility with no restroom. I’ve got a hard time with that,” said Mr. Burton.

Is bidding needed?

Councilman Rob Arlett, R-Frankford, asked if a bidding process is needed from the county’s standpoint, as is the case when council addresses any proposal exceeding $50,000.

The answer, says Sussex County Finance Director Gina Jennings, is no; not in this case.

“If you are writing the checks to the vendors and we are contracting with the vendors, yes,” said Ms. Jennings. “If it is a grant and we are giving it to a non-profit, which is our requirement, the non-profit can do what it chooses, and it is our choice by giving that to have strings attached if we want to. If we want oversight and we want to do that then that is your choice.”

Public comment

Mr. Lawson said public input solicitation through the county’s website and email drew 57 comments, plus five letters.

In addition, petitions from clubs and individuals totaled 580 signatures in support of the sports center proposal.

What’s next?

Council, which is not scheduled to meet the Tuesday before Thanksgiving, plans to revisit the proposal at one of its December meetings.

News Editor Glenn Rolfe can be reached at grolfe@newszap.com

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