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Questions raised about feasibility study for Hamburg sports complex

Hamburg's timeout from its proposed public/private ice rink and sports facility could last six months or more.

And as the town steps back from approving the multisport complex, questions about the feasibility of the $25 million to $30 million project continue.

One youth sports group said there's no way it could afford basketball court time if the cost is the $100 an hour listed in the feasibility study done by the developer, Sportstar Capital of Toronto. And even one of the project's biggest supporters, the town supervisor, said he thinks some revenue and expenses estimates in the feasibility study may not be accurate.

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"There's some I think might be a little optimistic. There's others I think might be a little conservative," Supervisor Steven Walters said of estimates.

Walters said he does not believe the Town Board will vote on the project before he leaves office Dec. 31.

"We know that we only get one chance to get this right, so we're taking our time to get this right. And if it takes two more years, three more years, if we get it right, I think it will be worth it," he said.

There are two proposals for twin ice rink facilities with indoor court and turf fields in the town. In addition to Sportstar's $25 million to $30 million public/private facility, there's a private proposal by the Kaleta Group with Liberatore Management Group and Ellicott Development.

The Buffalo News obtained a copy of the Sportstar feasibility study and financial estimates of the project through a Freedom of Information Law request. It is the first public look at some details about the complex, which the study concludes should be built.

According to Sportstar's estimates, the facility would bring in $3.48 million in gross profit in its first year from ice, hard court and turf sports. The company said rentals by 15 local sports organizations Sportstar talked with would bring in less than half of the gross, $1.52 million. Developer Marty Starkman, president of Sportstar Capital, said it is expected other groups also would rent space, and the 15 groups would seek additional hours. There also will be revenue from advertising and naming rights, he said.

Expenses are estimated at $1.76 million, plus a loan payment from $1.72 million to $2.27 million, depending on how much is borrowed and for how long.

Starkman said his Sportstar would borrow the money and the town would lease the building for 25 or 30 years. Sportstar will provide $500,000 to be put toward any losses on the operation of the facility. The town would not pay anything for the facility, unless the complex lost more than $500,000.

"The chance for it to lose more than $500,000 does not seem feasible because of the enthusiasm," Starkman said.

Town Councilman Tom Best Jr., a critic of the Sportstar project, said many numbers are inflated in the financial estimate. He said he would re-evaluate the project with a "true feasibility" from an independent source, not the same company that would develop the project.

"It's dangerous," he said. "It's got to be numbers that work."

Sportstar has proposed building the multisport complex on part of the former South Shore Golf Club at Camp Road and Southwestern Boulevard.

Other items from Sportstar's feasibility study and financial estimate:

  • The facility would make money by its third year.
  • The proposed 200,000-square-foot complex is "ideally sized for the area."
  • There is winter demand for ice sports, turf and hard courts.

The study acknowledges the possibility of the Kaleta Group building a competing facility with a single line under "threats" to the project. The only other threat listed: "Technology, kids playing on tablets and phones to over-technologizing sports."

"The feasibility study is lacking. When you have another entity claiming they are going to build their own hockey arena, and you don’t address it in the feasibility study, then it's really not a complete feasibility study," Town Councilman Michael P. Quinn Jr. said.

The town has its attorney checking the feasibility study, Quinn said.

"It's not like we weren’t going to check all these numbers," he said.

One group, Hamburg Little Cagers, whose 600 to 650 members use school gyms in Hamburg to practice, would benefit from more basketball court space, said Hamburg village recreation director Josh Haeick. The feasibility study shows the Cagers could rent 2,000 hours of court time. That works out to $200,000 a year, according to the study. But Haeick said when he was asked how many hours the group would rent, he was never told the final cost would be $100 an hour. There is no way the program could raise $200,000 through registration fees to pay Sportsplex, Haeick said.

"Anything we would do at a new facility would depend on price and how much gym time would cost," he said.

Starkman said a rental cost of $50 to $100 an hour was mentioned to the Cagers.

"The price is a negotiation," Starkman said. "We feel that in the prime time we can get $100 an hour."

In recommending the complex be built, the study says the most important finding backing that conclusion is the large number of youth sports groups needing more time in sports facilities, and the "large number of local youth sports groups who need more facility time to keep up with the growing town of Hamburg population."

"We're not fixated on the Town of Hamburg building something. What we're fixated on is, again, the recognition that the facilities we have in town are just simply not sufficient," Walters said.

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