Take me out to the ball game? Only if sureties are there first

A camera view from an overhead blimp shows a baseball diamond on a field of deep green surrounded by steep rows of seats. Tens of thousands of fans waving towels sporting the color of their favorite team try to disrupt the concentration of the visiting team while urging on their hometown favorites.

With Major League Baseball’s World Series in full swing (ahem), baseball stadiums are front and center in the sports world, and the games are topics for water cooler discussions throughout the country.

But baseball — whether played at an amateur, college, minor league or major league level — wouldn’t be possible without surety coverage for construction and renovation of the stadiums it’s played in. Moreover, the independent insurance agents who provide surety coverage play a game-changing role in making these projects happen.

Today’s professional, college and even local baseball stadiums are complex projects unlike other construction jobs. They require specialized design and experience to build — and they can’t come to fruition without the financial protection that surety coverage provides to the contractor and the project owner. Many surety bonds have been issued to assure that baseball stadiums are completed properly.

Athletic stadiums today are more than sports facilities. In professional leagues, they often are mixed-use developments that encompass food concessions and restaurants as well as retail stores. Many large stadiums also host concerts and other large events in addition to sports events. At an amateur level, stadiums sometimes stand side by side with other athletic fields and recreational equipment such as playgrounds and batting cages. For each stadium construction or renovation project, the contractor must manage a plethora of requirements such as field design, building materials, irrigation systems and signage.

The surety risks involved are different than for other property development projects. It’s vital for an agent and the surety company to know the project owner, as well as the stadium project funding mechanisms (whether via private investment or using county or municipal taxpayer money). The general contractor and subcontractors typically need to have experience working on these projects to ensure timely, quality completion.

If funding includes taxpayer dollars to construct or upgrade facilities, often the government entity sponsoring the project will issue a bond. Bond investors will want their investment to be protected. Contractors and subcontractors often are required (by law) to secure surety bonds to bid on and build the project. Even if the project only has private funding, the project owner benefits from a surety bond, which guarantees the contractor selected will perform per the specifications and pay all subcontractors and suppliers in a timely manner.

Illustrating the complexity of a stadium project was the development of a nearly 25-acre site in a southern state ― including multi-purpose athletic fields, walking paths, parking lots, concession stands and restrooms. The bond was for $3 million. When the project began, issues came to light in the design drawings and project scope: The property’s floodplain location meant elevation and irrigation difficulties had to be accounted for. Additionally, after construction started, the municipality sponsoring the development wanted to expand the scope of the project by adding a bridge over a nearby waterway, increasing lighting, and constructing playgrounds and trails. While these additional items were not in the specifications, the government body nonetheless wanted to increase the budget just slightly.

One big lesson surety bond agents realize is that local baseball stadiums and similar projects are highly visible in their communities and a source of pride. Surety bonds — and agents — play a key role in creating assurance that the project will be completed on time and within budget. The reward for the contractor, surety bond agent, and surety company is that they can sing “Take Me Out to the Ball Game” while knowing they helped the community enjoy and benefit from America’s favorite pastime.

Sean Rummel is bond manager for Old Republic Surety in the Atlanta contract surety branch office.

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