Mishawaka, Indiana, is serious about high-school athletics, no surprise in a state whose nickname inspired the movie Hoosiers, an archetype of small-town sports heroics.
(Bloomberg) — Mishawaka, Indiana, is serious about high-school athletics, no surprise in a state whose nickname inspired the movie Hoosiers, an archetype of small-town sports heroics.
The depth of the city’s commitment was on display earlier this month with its sale of almost $36 million of taxable lease-revenue bonds to finance the Mishawaka Fieldhouse. Developer Card & Associates forecasts the youth sports complex can generate $65 million in annual revenue once operation starts next year.
The city of 51,000 joins a growing list of municipalities with plans to attract tourism dollars by providing facilities for young athletes who otherwise would have limited opportunity to compete and to receive regional and national attention. But not all of the new public sites have seen immediate success. In Mesa, Arizona, a bond-financed park defaulted after opening a year ago.
“Tourism is not an economic game changer for most places. It won’t change the economic conditions on the ground,” said Michael Hicks, a professor of economics and director of the Center for Business and Economic Research at Ball State University in Muncie, Indiana. “Youth sports developments don’t have the leverage to make huge economic differences, especially in tourism, for their communities.”
Big Venue
Construction of Mishawaka’s 230,000-square-foot fieldhouse is scheduled to start next month, and when completed it could host tournaments featuring at least eight simultaneous basketball games or even more volleyball matches, plus indoor turf fields for baseball, football, soccer and softball.
“We have figured out a way to work with the communities and the cities to develop multiple revenue streams to show them why it makes sense to build a facility,” Andy Card, founder and chief executive of the firm building the athletic project, said in an interview.
Card’s company will run the facility after its scheduled opening around April 2024, the fifth such project it has in the state. “You’ve got so many sports out there, including rugby, lacrosse, even soccer in some cases, that just fall by the wayside because many of the bigger high schools don’t have the funds to support them,” said Card.
Growing Business
The youth-sports economy in the US, including everything from travel to private coaching to computer applications for league management and livestreaming, has grown into a $32 billion annual business, more than doubling since 2017, according to WinterGreen Research Inc., a private firm that tracks the industry.
The increasing popularity of national tournaments, in which some clubs in the Amateur Athletic Union fly cross-country to play rivals, is partially responsible for driving growth in the US youth-sports industry. AAU and travel sports teams now compete with traditional high school (and middle school) programs as an option for young athletes seeking recruitment by colleges, a phenomenon that has grown in recent decades due in part to a decline in public funding for athletics and the growing influence of sneaker companies that sponsor AAU teams.
“Serious high school athletes who want to make it to the next level can no longer rely solely on their high school programs to get them there,” said Hicks, an expert on sports economics.
Mishawaka’s plan to turn the fieldhouse into a regional, even national, destination stands to benefit from improvements to the train line connecting neighboring South Bend, home to the University of Notre Dame, to Chicago, 100 miles to the west.
The journey may be cut by 50 minutes, spurring travelers from the third-largest US city to attend tournaments at the fieldhouse and spend at local hotels, restaurants and businesses.
“Youth sports adds far more value to a community than a convention center or any other activity,” said Susan Eustis, president and senior analyst at WinterGreen.
Highly Rated
Standard & Poor’s Corp. rated the bonds sold for the project AA-, saying any risks are “sufficiently mitigated” by debt payment being secured by lease rental payments from the Mishawaka Redevelopment Commission. The bonds, underwritten by Robert W. Baird & Co., are due in 2043 and carry a 4.68% yield, bringing the cost to $54 million over the term of the loan.
Still, Bell Bank Park in Arizona stands as a cautionary tale. It opened on schedule in February 2022 after Legacy Cares Inc., a nonprofit organization, sold $284 million of bonds through the Arizona Industrial Development Authority to build the 320-acre development.
In October, Legacy Cares failed to make three full monthly payments toward the revenue fund that supports debt service on the bonds. Bell Bank Park’s financial difficulties came despite claiming 4.3 million guests in its first year. On Thursday, the trustee for Bell Bank Park’s investors, UMB Bank, submitted a regulatory filing declaring that Legacy Cares is in default.
Emails to Bell Bank Park and Legacy Cares seeking comment weren’t immediately returned.
In Indiana, Card says his company’s careful review of economic, population and municipal trends point to demand for youth sports projects, including the site in Mishawaka. His first major development in Westfield, Indiana, averages about 70,000 guests a month, attracting youth tournaments once held in Chicago and Cincinnati, Ohio.
“I’ve got about 14 more youth sports developments in the pipeline in various stages,” Card said. “And we’re now expanding out of Indiana into the Southeast and out to the West Coast.”
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