City may pay $500K to get Rays off thin ice

The Stingrays have been playing in the North Charleston Coliseum since 1993.

The Zucker family, widely considered the wealthiest in South Carolina, has been paying about $500,000 a year to keep the Lowcountry’s professional hockey team afloat.

Now it’s seeking a financial assist from the city of North Charleston.

Under a proposal before City Council, the Stingrays would receive $250,000 or half of their annual losses, whichever is less, for the next two years. The agreement also would extend the Stingrays’ current lease contract with the North Charleston Coliseum for two years with an option for a third year. The proposal is expected to receive council’s tentative approval Thursday.

The city’s Finance Committee, which consists of the full council, approved the measure last week by an 8-3 vote. Councilmen Todd Olds, Bob King and Dwight Stigler voted against the proposal.

Jonathan Zucker, whose family took over sole ownership of the team in 2011, said the Stingrays have lost an average of $400,000 to $700,000 annually since the team first took the ice in 1993. Even when the Stingrays were drawing 9,000 fans per game, the franchise didn’t break even, Zucker said. The team is averaging 3,304 fans per home game this season.

In December, the Stingrays and the city had just begun to negotiate a new lease, which was to expire at the end of the current season.

The Stingrays also were under pressure to make a decision about their immediate future in the ECHL, the league the Stingrays play in. The ECHL was looking for a three-year commitment from the franchise to continue playing in the league.

“We wanted to renegotiate our lease, the entire document, with the city so we could get to a better place financial place. Instead of going through that process, which was going to be lengthy, the proposal came up to share the losses for the short term, while we work on a new lease,” Zucker said. “We’ve invested millions of dollars in the team because our family believes it is a positive contribution to the community, not just the city of North Charleston, but the entire metropolitan area, to have the team here. We’ve been pumping in about half a million dollars a year to keep the team afloat and we’ve been doing that for years. That’s why both sides came up with this idea.”

Mayor Keith Summey said it’s good business for the city to help out the Stingrays. Councilman Olds called it “corporate welfare.”

“Honestly if we do away with the ice rink, we not only lose the Stingrays, we lose Disney on Ice and all of those things, so you are looking in excess of 40 nights of the lights being out at the North Charleston Coliseum,” Summey said. “Yes, we could probably go out and pick up 10 to 15 shows for some of those and fill them with other events, but my goal is to help them grow the participation of the community back. And what we did is a two-year agreement with a year option so that they can look at it and we can look at it after that two-year cycle.”

Olds said taxpayers are not responsible for covering the Stingrays’ losses.

“I’m not about using taxpayer money to fund businesses and private enterprises,” Olds said. “Neither the city nor the council should be responsible for a business that has a loss in their business. ... I appreciate what the Stingrays have done for this community, but it’s obvious they have been going down the last 12 or 15 years. And when they are owned by one of the world’s richest individuals, I especially don’t think city taxpayers should have to fund any loss.”

Anita Zucker has a net worth of about $2.6 billion, according to Forbes Magazine.

Summey said he understands the argument against giving taxpayer money to the Stingrays, and to the Zucker family, but he added that the city loses money annually on most of its recreational endeavors.

“I know people will say, ‘They’re the wealthiest family in South Carolina,’ but it comes to a point that it’s a business decision,’” Summey said. “They’ve been supporting it for the good of the community, but how long do they need to do it and continue to lose? Hopefully for us and for them, we’ll turn it around and we won’t need to supplement. Every recreational thing we have in the city loses money. We supplement baseball, basketball, tennis, swimming, and golf is an amenity you need in a community.”

Councilman Ron Brinson said the city might end up saving money in the long run with the new agreement.

“I think in the end, this was the most cost-efficient way to help everyone out,” Brinson said. “If we lose those 40 dates, then the coliseum will be sitting empty those nights and that will cost the city money. I understand the argument about not subsidizing a private enterprise and, to be honest, that did bother me.

But the ownership group has acted in good faith, Brinson said, and the Stingrays benefit the community. “I’m trying to look at the bigger picture.”

The Stingrays pay about $6,000 per game to play at the North Charleston Coliseum. Including the playoffs, the Stingrays play between 38 and 42 games annually at the facility. The cost to play at the North Charleston Coliseum is among the highest in the ECHL, a league source confirmed.

The idea of the city of North Charleston becoming a partner with the team was discussed in December. There are at least two teams in the ECHL — Toledo and Cincinnati — that have a limited partnership agreement with their franchises.

“Quite honestly, I would have liked to have been partners, the city be a partner, but you can’t legally,” Summey said.

While a direct payment from a city municipality to an ECHL franchise is uncommon, it’s not unheard of.

“Without getting into specifics, the franchises that have had the most success have been the ones where the municipalities and team owners work closely together,” said ECHL commissioner Brian McKenna.

The Charleston RiverDogs and the Charleston Battery, the two other minor league franchises in the Lowcountry, have vastly different financial agreements with their respective municipalities.

“We have a fantastic relationship with the city of Charleston,” Charleston RiverDogs General Manager Dave Echols said Wednesday. “But we have nothing of that magnitude in our lease.”

The RiverDogs, members of baseball’s low-level Class A South Atlantic League, have a lease agreement with the city of Charleston that calls for $25,000 to $35,000 in field supplies per year, Echols said. The team shares the field and the ballpark with The Citadel.

Unlike the Stingrays, the RiverDogs control all revenue within Joseph P. Riley Jr. Park, including concessions, during games. The RiverDogs also get parking revenue from two large lots near the ballpark and don’t have any of the player costs of the Stingrays or the Battery. The New York Yankees incur all player costs, including salaries and housing.

The Charleston Battery soccer team’s owner, Three Lions LLC, will begin receiving a property-tax break this year of about $65,000 per year on privately built Blackbaud Stadium. Three Lions LLC had been paying property taxes of about $70,000 per year, and has paid about $1 million in taxes since moving to Daniel Island in 1999, said Tim Callanan, deputy finance director of Berkeley County. Three Lions LLC will now pay about $5,000 in property taxes, he said.

“It’s not even like comparing apples and oranges, it’s like comparing two different species,” Zucker said. “The business models of the Battery and RiverDogs are completely different from our business model.”

Brenda Rindge and Gene Sapakoff contributed to this report.