Grand Rapids: Built to Last
Minor league sports barely existed in western Michigan in the late 1980s and early ’90s. And with a declining population and an unemployment rate that was well above the national average, why would it?
Yet it was during that time when two different groups with two distinctly different business models spent years working toward the same goal: to create a franchise as integral to the community as the Grand River that runs through it.
In 2014, a third team whose owner had twice refused to take “no” for an answer joined the market.
Over the past quarter century, these teams and their fans have faced obstacles the way a family does — together. That support is among the factors making Grand Rapids-Comstock Park, Mich., Sports Business Journal’s 2019 No. 1 minor league market.
Grand Rapids native Lew Chamberlin was working at his family’s steel and supply company in 1980 when he became intrigued by a series of articles in the Grand Rapids Press that pondered why Midwestern minor league baseball markets like Toledo, Ohio, and Evansville, Ind. — two cities whose economic and demographic makeups were similar to those of Grand Rapids — had ballparks to go to on summer nights, while folks in Michigan did not.
“As luck would have it, I guess, we got bought out [by Alro Steel] in 1984, and that baseball idea that had been banging around in the back of my head started to come out,” he said.
Chamberlin, who had received his law degree from the University of Toledo’s College of Law three years earlier, wrote letters to league presidents, “visited a few sympathetic team owners” to get an idea of how ownership worked and slowly crafted a business plan.
In 1986, he was caught off guard when he saw a story about a local accountant trying to get $12 million in public funding to build a ballpark 5 miles away. “I was wisely advised by my family to call the guy before I dumped my whole plan,” he said.
The “guy” was Denny Baxter, a native of nearby Muskegon, Mich. The Michigan State grad had hired an architect and a marketing firm as part of his effort to lure an affiliated minor league baseball team to the area.
Chamberlin and Baxter soon joined forces. “Our visions were really aligned: same approach, same philosophies, complementary skills,” Chamberlin said. “We decided to throw it in together.”
Their sought-after site in Wyoming, Mich., and several others fell through. But in 1992, Chamberlin heard about two local businessmen who wanted to build a riverfront arena on a 45-acre plot 5 miles north of the city in Comstock Park. However, influential folks in Grand Rapids were talking about building an arena downtown adjacent to the convention center.
“We told those guys, ‘If you give us the land, we’ll build the stadium ourselves, and give you a share of the investment.’”
They agreed and still have equity in the team.
In 1993, the organization bought the Class A Madison (Wis.) Muskies, and after eight years of work, moved the newly named West Michigan Whitecaps to the $6.5 million, privately financed Old Kent Park.
Any business would envy the support the club has received. Sixty-two of the original season-ticket holders maintain that status, and by mid-2020, the ballpark will likely welcome its 11 millionth fan. Several corporate partners have been there since day one, and when Fifth Third Bank bought Old Kent Bank in 2001, it kept and has since extended the naming rights.
The team has modified the ballpark on its own dime as fans’ needs have changed, reducing the venue’s original capacity of 11,000 seats to 8,942 by converting undersold inventory to higher-margin viewing areas.
But it was a five-alarm fire in January 2014, which destroyed half of the first base side of the ballpark, that exemplified what the team and the community mean to each other. With wisps of smoke still visible in the background, Baxter proclaimed from the Pepsi Club in center field that the team would play on Opening Day. Former Whitecaps posted support on social media. And 43 days later, the club held an open house at the ballpark and handed out team T-shirts that said “Never In Doubt.”
“The fire was a defining moment for this community,” said Jim Jarecki, the club’s vice president and general manager, one of five employees who have been with the team since the beginning. “The trades and contractors in the city dropped the other jobs they were doing and got us through the pains of that destruction. Ninety-five days later we played on Opening Day.”
During the rebuild, Founders Brewing Co. in Grand Rapids agreed to title sponsor the new rooftop craft beer area, which helped the club win Ballpark Digest’s 2015 Best Ballpark Improvements award.
“This is your summer cottage,” Jarecki said. “Your best nights in West Michigan should be at the ballpark.”
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While the ballpark search was going on in the early 1990s, the DeVos and Van Andel families of Grand Rapids were gathering support for a publicly funded convention center expansion and new arena for a professional hockey team they would own.
Many folks were skeptical, as several hockey teams had failed in the city. But when an $11.5 million contribution from Jay and Betty Van Andel helped secure approval for the project in 1994, Dan DeVos and David Van Andel (whose fathers co-founded Amway) formed what would become the Grand Rapids Griffins.
The following year, Diane Maher, the CFO for DeVos’ numerous businesses, recruited former Deloitte co-worker Tim Gortsema. “She asked me if I wanted to oversee the finances of a hockey team,” said Gortsema, the team’s president, who grew up 15 minutes from the arena. “This gave me the chance to apply my financial background in a sports setting, not to mention the excitement of coming on board during the birth phase of both the team and the building.”
The $77 million Van Andel Arena opened for the Griffins’ 1996 inaugural season, and the club had to cap the season ticket base at 7,000 because of high demand. When interest began to wane after about a decade, management made several changes, like offering more targeted concessions discounts and having its game-day staff wear team polo shirts, rather than formal attire.
“We looked like undertakers, not hockey fans!” Gortsema exclaimed.
The club’s total revenue has increased for nine consecutive seasons, setting franchise records in each of the last two, Gortsema said. Ticket sales revenue has increased for nine consecutive seasons; full-season renewal percentage stands at 90%; and sponsorship revenue has increased for 11 consecutive years, setting franchise records in each of the last five seasons. Additionally, the club ranked first in the AHL in both average and total turnstile count last season and has drawn more than 300,000 fans per season for six straight seasons.
This summer, Billboard named the arena the top-grossing venue of its size (capacity 10,001 to 15,000) in North America, and No. 6 worldwide, as the building tallied more than $19 million in ticket sales between November 2018 and April 30 from its 36 shows, which drew more than 305,000 fans.
Not only does the team have 10 employees with 20 years or more in tenure, but SMG has managed the arena since the beginning and is signed through June 2028.
The arena has had numerous renovations over the past few years and just a slapshot away are three under-construction mixed-use developments.
The team also operates the city-owned Griff’s Icehouse, and owns two other open-to-the-public rinks nearby. Gortsema said the rinks provide an avenue for the club to show its appreciation for the community’s support.
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In 2012, 24-year-old Steve Jbara was told twice by the NBA that it had no interest in placing an NBA D-League team in western Michigan. But in early 2013, the Springfield (Mass.) Armor became available, and he signed a tentative agreement with Wings Stadium in his hometown of Kalamazoo, Mich. During a site visit, league officials took one look at the center-hung scoreboard and asked Jbara to attempt a half-court shot to see if the arena was playable.
“I can still hear the clank in my head of the ball hitting the bottom of the scoreboard, ending my vision to be in Kzoo,” he said.
But like Grand Rapids’ other pro team owners, Jbara was confident the market would support his team.
In January 2014, he and his partner Wes Weir were sitting in Founders Brewing Co., knowing they had 90 days to come up with $4.5 million to buy the Armor, when Jeff Royce, the then-director of a local business incubator, overheard the conversation. Royce set them up with the first of what would become a roster of nearly 100 investors, and the sale went through.
The Grand Rapids Drive, which is affiliated with the Detroit Pistons, plays in the 62-year-old, 5,000-seat DeltaPlex Arena, a venue four miles from Van Andel Arena. In its five seasons, the club has averaged almost 3,000 fans per game. Attendance last season was 20% higher than it was in the inaugural year, and Jbara said the team has seen 5-10% growth across all of its business metrics each year.
“Fans and businesses are still learning about us,” he said. “We know it’s going to take a bit to gain their trust, given the history of basketball here. We are getting people who were probably sitting back a little before investing their emotions and money.”
The club received a shot of local support in 2017 when former Pistons great Ben Wallace became the most visible of an investor roster that has been consolidated to 22. “Ben was a game changer for our business. He is here every week, getting in the weeds of the business,” Jbara said.
Jbara is committed to Grand Rapids despite the Pistons’ announcement this year that their G League team eventually would play at a new arena on Wayne State’s campus in Detroit. What keeps him there?
“The team was invested in by the community, community companies have all backed the team, and fans have supported us and believed in us when it was just a concept,” he said. “We owe it to the community to stay put and continue being an asset to West Michigan.”
Additional photos: Grand Rapids/Comstock Park, Mich.
First Look podcast, with more on the minor league marking rankings, at the 11:54 mark: