Westfield City Council member Troy Patton gave a presentation on Grand Park’s finances at the council’s May 2 finance committee meeting and acknowledged what many taxpayers have questioned since the park opened in 2014: When depreciation is taken into consideration, the park is not making money.
Patton showed Grand Park’s assets, revealing revenues were $6.14 million and expenses were $3.37 million in 2021, so its earnings before interest, taxes, depreciation and other expenses was $2.76 million for 2021. But Patton said the park’s depreciation was roughly $2.9 million in 2021.
“This is something we always like to tout to say, ‘Oh, we’re making money at Grand Park,” Patton said. “I don’t care whether we make money or not, it is meant to be an economic driver and it’s doing that, but if you’re not even talking about the depreciation of $2.9 million, it is not making money. That’s OK, but this is for the taxpayers to understand that Grand Park does not make money. It’s OK, but we need to quit saying it makes money.”
Since the city issued a request for proposals March 3 for a new owner and/or operator of the park, Patton said the council has been inundated with questions, which is why he gave the presentation at the finance committee meeting. He said he compiled the information from the RFP and the clerk-treasurer’s office for revenues and expenses. The Westfield Redevelopment Authority owns the park.
“People want to know what Grand Park is worth and what it is generating,” Patton said. “We have never seen that in black-and-white numbers. Something the taxpayers are paying for is something where they should know what it’s bringing into the city, what its expenses are, what its balance sheet and income sheet look like, what we are on the hook for and what our intentions are. I do think Grand Park is successful in certain aspects such as bringing in a tax base, but I think we need to look at it more from a big picture (perspective).”
Patton said area businesses, such as restaurants, rely on Grand Park for their sales.
“There’s already people who have said, ‘Hey, we’re going to build a Grand Park in our state’ or states around us,” Patton said. “Some have scrapped those ideas because the cost is too great. If our asset becomes old and tired and we don’t control that asset, who’s to say Auburn doesn’t build the next one and pull everyone in from there?”
Another concern the finance committee expressed about a potential sale of Grand Park is that some of its debt can’t be assumed by a new owner.
“Why even put out a request for proposals if debt cannot be assumed?” Westfield City Council member Joe Edwards said. “That sticks us with a heck of a load with no way to retire it. I didn’t realize the debt was un-assumable.”
Westfield Chief of Staff Jeremy Lollar said if the city were to sell Grand Park, it would use proceeds to pay off park debt. The city still owes nearly $80 million for Grand Park, and Patton said if the city were to settle for anything less than that figure, it would be a burden on taxpayers.
“Grand Park cash flow is negative,” he said. “The city claimed it has a $200 million net worth, and I think that’s probably a bit off.”
Finance committee members expressed concern that one of the interested buyers could purchase the park for much less than it is worth, but Lollar said legally, the city couldn’t sell the park for less than it appraises.
“Statute wouldn’t allow us to sell it for less than the average of the appraised value of assets,” Lollar said. “We ordered those two (appraisals) and don’t know what they are, but we would not sell it for $20 million. We wouldn’t legally be allowed to.”
Patton doubts the park would sell for its estimated $200 million net worth.
“If someone is willing to pay $200 million, throw in my house with it,” Patton said. “I’m pretty comfortable knowing nobody is going to pay $200 million for the asset or even $100 million for the asset unless we plan on bulldozing the place and putting up something else, which I think would be a mistake.”
If Grand Park receives adequate payment from a buyer, Patton hopes some of the proceeds would go toward repaying the Westfield City Council the $6 million it is owed. In 2014, a resolution was approved whereby the council loaned $6 million of utility sale proceeds to the city for use within Grand Park. Westfield Council member Cindy Spoljaric voted against the resolution, which passed, and said she has never received accounting on where the money was spent.
“It’s not showing up anywhere on debt for Grand Park that this $6 million is owed,” Spoljaric said. “It’s a loan. It is to be repaid.”
Spoljaric said the council hasn’t received any payback of the loan, even though the resolution said money would be repaid as revenue becomes available. Patton said he hopes the council will be paid what it’s owed because many projects within the city, such as infrastructure, could benefit from the money.
“If we’re going to go out and talk RFPs, let’s address the $6 million and set up a payment plan,” Patton said. “There are a lot of things we could be doing with that $6 million. No interest has accrued on that. We haven’t gotten the $6 million back. It’s a bit of a slap in the face to a lot of people that it hasn’t been addressed.”
Lollar said 16 applicants have expressed interest in issuing a proposal for Grand Park.
“Make no mistake, if someone is buying Grand Park, they are buying it to be able to invest in it and grow that business. Maybe they’re not making a ton more money on events and tournaments, but maybe they’re making money on their development around the park,” Lollar said.
Edwards said he hopes the city has sufficient financial information for Grand Park because the council has never received it.
“Anybody (who’s) going to buy this is going to say, ‘I want to see the books.’ That’s a normal question if you’re going to buy a large enterprise,” Edwards said. “I hope we have sufficient information because (the council) has never received it, that’s for darn sure. To determine whether this is profitable or not, they’re going to make the same decision on their own. They’re going to want to see the books.”
Patton also expressed concern about the city issuing a request for proposals as a trial balloon to see what private investors might pay for Grand Park.
“We shouldn’t do RFPs for the sake of doing RFPs just to test the waters,” Patton said. “When you do that, it’s like putting your house up for sale just to see what you can get but you’re not interested in selling it, you just want to see. After a while, people will say, ‘These people are just kicking the tire down the road, they aren’t even serious.’ If we are going to do an RFP, we should be serious about it and at least have an analysis to say, ‘This doesn’t even generate $200 million.’ If someone comes in to offer $200 million, I will sit up here and eat crow all day long.”
Lollar assured the finance committee the RFP wasn’t merely an exercise.
“We are serious about this, assuming the right proposal aligns with our plan, which would leave Grand Park as Grand Park and it would still be the economic engine for the City of Westfield,” Lollar said. “It would just be able to blossom with some private capital investment is the intention.”
The deadline for proposals is June 22. Lollar said a proposal review committee is being assembled. For more, visit westfield.in.gov.