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The economy is hurting. Unemployment in Elkhart County is up.
So what's Craig Wallin doing betting $12 million on a new stadium for an expansion team to a collegiate-level baseball league?
People still want entertainment, even when the economy is suffering, he explains.
"In a down economy, baseball still seems to work," he said. "It's not a guarantee, but it seems to work."
Wallin, owner of Elkhart-based media company CTT Communications, unveiled plans Monday to build a new stadium off C.R. 17, north of U.S. 20, starting this spring. The yet-to-be-named Northwoods League baseball team is to start play in 2011 in the facility, which also will house some 35,000 square feet of retail, restaurant and office space.
The proposal has generated plenty of enthusiastic buzz. And it adds to a growing list of proposed new development in Elkhart County, things like Think North America's planned electric automobile manufacturing plant and the $205 million "holiday village" near American Countryside Farmers Market.
Still, the baseball plans raise questions. If you build the 2,500-seat stadium, how can you be so sure they'll come, particularly with a baseball team in neighboring St. Joseph County, the South Bend Silver Hawks? Given the tight economy, is there demand for the 35,000 square feet in new retail space, a key element of Wallin's proposal?
Jim Skillen, a real estate broker who deals in commercial and industrial property in Elkhart County, loves new development.
"But from my experience, that is not an easy thing to make work," he added, alluding to the proposed new retail space. Drumming up demand for space of late has been a "very difficult" task.
Almost all of the strip malls here have vacancies, he said, including those on C.R. 17, the burgeoning commercial strip east of Elkhart where Wallin's baseball stadium is to be built. One new building that went up in front of a C.R. 17 strip mall, a yogurt shop, was torn down just as quickly after the business failed.
A 'GLORIOUS' BUSINESS MODEL
Wallin studied the experiences of the other Northwoods League teams long and hard in deciding to forge ahead with his plans. He also took into account the current economic slump and the limited market for new commercial space here.
"We've done the math. We've crunched the numbers. We've had our business plan scrutinized, picked apart," he said.
On the one hand, given the population in Elkhart County -- about 200,000 -- he seems confident the team will be able to draw 1,700 to 2,000 fans per game, the threshold he's set. Other sports industry people he's consulted have said sports teams can usually expect to draw the equivalent of 1 percent of the total population base in a 30- to 60-mile radius.
The proximity of the South Bend Silver Hawks, meanwhile, fazes neither him nor officials from that team.
"It's two different experiences, two different ballparks, two different levels of play," said Owen Serey. He's assistant director of radio and media communications for the Silver Hawks, a professional Class A team affiliated with Major League Baseball's Arizona Diamondbacks.
Dick Radatz Jr., president of the Rochester, Minn.-based Northwoods League, said the addition of a second team in the region would serve to stimulate interest in baseball in the area, not dilute it.
Then there's the saved business expense of salaries for players to consider. Since Northwoods League players are college students on their summer breaks, they aren't paid. That allows them to retain their amateur status and college eligibility and helps team operators keep costs in check.
"Our business model is a glorious one," said Radatz.
Most germane in the success of Northwoods teams, though, has been the marketing capability of individual team owners, according to Radatz.
The Beetles, a team in Alexandria, a Minnesota city of some 10,000, drew 925 spectators per game in 2009, he noted, nearly 10 percent of the local population.
In Eau Claire, Wis., home to the Express, another Northwoods squad, team operators were angling for 1,000 spectators per game when players first hit the field in the city of about 65,000 in 2005. The number was actually double that in 2009 -- 2,011 -- and Brett Schroedel, the team's general manager, said attendance has edged up each year, except for a blip in 2008.
Though not "raking in the money," said Schroedel, the team is profitable, with much of the earnings plowed back into stadium improvements. "It is a challenge, but it is fun," he said.
'SEVERAL REVENUE STREAMS'
As fun as it may be, plans for the new $12 million stadium here distinguish the Elkhart County proposal from most other Northwoods teams. They also add a financial layer the others don't have to worry about.
With the exception of the La Crosse, Wis., Loggers, which built a stadium in 2003, the other Northwoods League teams operate out of facilities that already had been built, according to Radatz.
About $5 million will be borrowed via bonding to build the facility here, creating an annual debt payment for Wallin. Sure, the feds will pay 45 percent of interest costs on the bonds thanks to an economic stimulus program meant to spur development. Still, the debt creates another cost other teams don't have to worry about.
What's more, income from the 35,000 square feet of office and retail space, enough for about 12 to 15 businesses, figures significantly in Wallin's plans. That puts the pressure on him to make sure the space is filled.
"There are several revenue streams that go into this picture and ticket sales (to games) are just one of them," said Wallin.
The shopping area -- integrated into the stadium, but located just outside the complex's stands -- would be open year round, adding to the many strip malls already up and down C.R. 17. Though the actual stands and baseball field are to be completed by June 2011, the commercial area may not be finished until the following September.
For Skillen, the broker, the plans bring to mind American Countryside Farmers Market, the sprawling, red barn shopping venue south of Elkhart. Since opening in 2007, it has struggled with vendor turnover and uneven visitor levels.
"The cost of running the facility is so high, it's almost impossible to crack the nut," Skillen said.
On the other hand, the planned stadium complex location at C.R. 17 and U.S. 20 is readily accessible to Elkhart, Goshen and Middlebury, he noted, good news for drawing customers. And another sports facility near the site, Elkhart Sports Center, seems to be thriving.
Either way, Wallin is forging ahead and is now in the process of searching out tenants to fill the stadium space. He's also come up with a scheme he hopes lures them in, even considering the many other commercial vacancies out there. The key will be bundling the price of the space with signage at the stadium and TV advertising on local ABC affiliate WBND via two programs his media company runs on the channel.
"It's definitely not business as usual," Wallin said. "We can't treat it in the traditional way."