August 02, 2020 04:00 AM UPDATED 9 HOURS AGO
With Crawford leading the way, Hall of Fame Village remains confident in $900 million plan
The management team hopes the second phase of the Hall of Fame Village project will be completed in 2023.
Stuart Lichter's biggest concern about the Hall of Fame Village project wasn't securing financing for a massive mixed-use development that is expected to approach $1 billion.
Sure, the starts and stops because of funding issues were a problem.
But Lichter, whose Industrial Realty Group is the developer of the Canton project, fretted more about building "a world-class staff" that could manage everything the Village was supposed to be.
"I knew we didn't have the talent beyond the real estate aspects. And you can't finance the real estate aspects without the staffing in place," the IRG chairman said. "So the team we put together is essential."
The key hire was Michael Crawford, a former Disney and Four Seasons executive who was named CEO of Johnson Controls Hall of Fame Village in late 2018. Crawford's 24-year run at Disney included directing the development of Shanghai Disneyland.
"To get someone of that talent to come to Canton to lead this project should be inspiring to any investor," Lichter said.
As an outsider, Crawford viewed the project, which was announced in 2015 and would build around the Pro Football Hall of Fame, as so many others did. He was excited about what was possible, especially with the ultra-powerful NFL brand as a major draw.
"When I came in, one of the first things I did was appreciate the vision, look forward to it, but really break it apart and say, 'What are the things that are going to create a destination for us now?' " Crawford said. "And we're fortunate in the fact that we have lots of land that we can work with."
What Crawford and his team had to figure out: "What's achievable and what's financeable?"
Financing a project that originally was unveiled with an estimated $476 million price tag and doubled in projected costs within a few years brought its share of obstacles. And while Hall of Fame Village remains a long way from the end zone, its management team believes the July 1 merger with Gordon Pointe Acquisition Corp. is what will get the ball moving once again.
Piece by piece
The deal with Gordon Pointe, a Pittsburgh-based special purpose acquisition company, was valued at $390 million.
It produced a combined entity, Hall of Fame Resort & Entertainment Co., whose common stock and warrants are being traded on the Nasdaq exchange.
It also brought an infusion of capital — more than $30 million, Crawford said six days after the merger was finalized, plus another $40 million in public equity that the group expects to raise. Tax increment financing is expected to produce at least $60 million, funding from Constellation's Efficiency Made Easy program will generate another $30 million, and Crawford expects a construction loan of at least $200 million to be in place this fall.
All told, that's expected to be more than enough to finance Phase II of the project, which calls for an indoor waterpark, two premium hotels, a center for excellence with office and dining options, a performance center featuring a fieldhouse and convention center, and a retail promenade.
The $300 million second phase, which Crawford hopes will be capped by the completion of the waterpark in the third quarter of 2023, follows an initial $250 million investment that was highlighted by the renovation of Tom Benson Hall of Fame Stadium and the construction of the National Youth Football and Sports Complex.
Phase III, conservatively pegged at $300 million, would include an experiential component with virtual and augmented reality, a luxury hotel with retail space, housing and an assisted living center for former NFL players, coaches and officials. Ideally, that work would begin within a year or two of the completion of Phase II and be completed a couple years later, Crawford said.
"I would anticipate more phases after that, and frankly, coming back and re-engineering or reconceptualizing some things," said Crawford, who is the combined company's chairman of the board. "You want to keep everything fresh."
That, like Hall of Fame Village's early pronouncements, might sound like too much, but Crawford believes a piece-by-piece approach, with each phase open to adjustments based on current trends and technological advancements, will mitigate some of the risks.
"You never build a church for Easter Sunday," he said. "You always build a master plan to add new things, exciting new elements. Cedar Point does this really well."
COVID-19 complications
Another example Crawford cited was Disney, whose 500-acre California resort, he pointed out, is 100 acres fewer than the potential for the sprawling Hall of Fame campus in Canton.
All that hope could be overshadowed by the pandemic, which has brought the tourism industry to a near-standstill and forced Hall of Fame Village to push back the launch of its public offering to early July. As of Thursday, July 30, the stock price had dropped in half, to a closing price of $5.30 per share, since its debut.
The Hall of Fame's annual enshrinement ceremony, along with the NFL's preseason opener between the Dallas Cowboys and Pittsburgh Steelers, were moved to 2021.
"COVID is complicating everything," Lichter said.
Crawford, though, is thankful that the Village hadn't begun to build any of the Phase II elements before the pandemic hit, "because I think we would have been closing things as quickly as we would have been opening them."
Instead, the approach is more cautious.
The next step is the completion of a $21 million renovation of the former McKinley Grand Hotel in Canton, which Hall of Fame Village purchased for $3.8 million last year and is being rebranded as a Doubletree by Hilton. That should be completed by early October, Crawford said, and plans call for an on-site hotel, a Hilton Tapestry, to follow.
The goal is to capitalize on the popularity of the Pro Football Hall of Fame, mix in a youth sports business that is already profitable and eventually incorporate gaming, fantasy sports, esports and plenty of other attractions.
"There was no real length of stay here," Crawford said. "We have a vision of taking an opportunity to create a destination for people to have fun in, stay in and eat in."
Finding a way
Dennis Saunier, the longtime president and CEO of the Canton Regional Chamber of Commerce, said it was expected that a project of the Village's magnitude would experience some "starts and stops and hurdles along the way."
Crawford's appointment and the Gordon Pointe merger, however, have made Saunier more hopeful than ever that the Village's grand plans will come to fruition.
"Those are indicators that the project is alive and well and moving forward," the veteran of 40 years with the Canton chamber said.
So if the assumption is that the development will come to fruition and the U.S. will return to some semblance of normal in 2021, the next hurdle is the Village becoming profitable.
The new company's investor presentation estimates that Phase II can bring in $147 million in revenues and produce earnings before interest, taxes, depreciation and amortization of $47 million by 2025. A quarter of the revenue is projected to come from the waterpark, and sponsorships, events at the stadium and the hotels are estimated to account for another 50%.
Should Ohio legalize sports betting, Crawford sees huge potential in that space, and would welcome the Village becoming "a test site" for the state.
It's that type of thinking that has Lichter, who is the largest owner of the combined entity, confident that the Village will follow through on its many promises.
"Maybe this was personal arrogance, but I always thought we'd find a way to get it done," the IRG chairman said.
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