Daytona Beach businessman Mike Panaggio has proposed selling off the city-owned land that’s home to Daytona Stadium to a private developer and using the proceeds to build a new state-of-the-art sports complex.

DAYTONA BEACH — Two years into his 30-year lease of Daytona Stadium, Mike Panaggio has come to realize how much is aging and breaking down at the 32-year-old facility west of Interstate 95.

Panaggio, the co-owner of a local sports training academy, said he’s been losing $500,000 per year at the facility that until 2018 was called Municipal Stadium.

But Panaggio says he has a plan to halt his financial hemorrhage and use the ailing city-owned facility to help pay for a new $30 million sports complex for kids and teenagers.

His idea is for the city to shut down everything on the 64-acre stadium site off LPGA Boulevard that he’s renting, and sell the property to a private developer for new residential or commercial uses.

"It’s valuable property," said Panaggio, the founder and CEO of Daytona Beach-based direct-marketing company DME Holdings. "It’s probably worth $12 million-$14 million if the city were to sell it to a developer."

He thinks the stadium land could fetch close to $15 million with its prime location in an area exploding with home construction and commercial development.

Panaggio is confident he could draw another $15 million in local and national sponsorships of a state-of-the-art athletic complex that could be built in another part of the city. He said he’s personally pledged to chip in $1 million.

All together that could create a $30 million pot of money to give Daytona Beach something special.

"With $30 million you could build yourself quite a complex," Panaggio said. "We could come up with a plan over the next six months that puts us on the map for sports tournaments."

He suggests using land owned by the city or Daytona International Speedway, possibly on property both the city and Speedway have near his DME headquarters on Bellevue Avenue west of Clyde Morris Boulevard.

Panaggio said he has talked to City Manager Jim Chisholm about his idea, and for now the two have only agreed to keep exploring the concept. Chisholm did not return calls seeking comment.

Panaggio said city officials are "thinking about it."

City Commissioner Rob Gilliland, whose zone includes the stadium, said he thinks "it’s a great idea."

"I totally agree with him that the stadium has reached a point where the maintenance is excessive and makes it difficult to be an income-producing property," Gilliland said.

Gilliland is a little skeptical that the property could sell for $234,000 per acre, partly because it’s prone to sogginess and is near a sewage plant. But there might be enough upland property to give it high value, he said.

Gilliland said the city will also need to see if there are any restrictions on selling the land for private development since the stadium was built with a state grant that might have come with strings. He also stressed that he would like the county government brought into the conversation.

Panaggio said the complex could become something all Volusia County cities use. Panaggio said he’s trying to improve things for everyone.

"I’m not trying to enrich myself. I’m just trying to use assets wisely," he said, explaining his idea is to set up a public-private nonprofit.

He said a new sports complex could bring in 10 times the revenue of Daytona Stadium. He envisions a multi-sport facility with several fields for softball, hardball, sand volleyball, soccer and lacrosse. He would also like to see a 120,000-square-foot building that could house eight basketball courts, 16 volleyball courts and possibly space for gymnastics and wrestling.

"It’s better politically to do the status quo, but we need to focus on new assets," he said. "I’d be willing to lead it."

If the city does agree to shut down the stadium site, it wouldn’t happen overnight. The idea would be to have the new complex ready to move into when Daytona Stadium breathed its last, Panaggio said.

There would also have to be new agreements with the three local schools that use the stadium. The Mainland and Seabreeze high school football teams both use the field as their home stadium. Bethune-Cookman University also plays some football games at the stadium.

Mayor Derrick Henry said he hasn’t talked to Panaggio about his idea yet, or to the city manager, but he’s intrigued.

"I want to do anything I can to help him succeed," Henry said. "It’s an interesting idea. I would be interested in exploring it."

Under both city control and private use, it’s been difficult to develop it into a money-making property, Henry said.

"We never made money off it," the mayor said. "It was always a financial stress for the city. We just aren’t able to generate the type of uses to make it profitable."

Economically speaking, the stadium is really only a catalyst to fill hotel rooms and restaurant tables, Panaggio said.

"It’s become apparent that turning a profit at the stadium is just impossible," he said.

The city has poured millions into the stadium, and Panaggio said he has invested about $1 million so far.

"He made it much better than it was," Henry said.

But trying to turn a late 1980s facility into something that would wow people now is a tough task.

"We live in a modern world, and it’s not a modern facility," Henry said.

In years past, the all-natural grass at the stadium was taking a beating from all the teams that used the field. So in 2010, the grass was ripped out and replaced with artificial turf at a cost pushing $1 million.

The justification for the high bill — paid mostly with Volusia County ECHO funds — was that the synthetic blades promised to look like a healthy, freshly mowed lawn every day for a decade. But the fiber in the artificial grass started degrading in 2012, with the blades splitting and breaking apart.

The full 100 yards of turf had to be replaced. The turf replacement cost around $300,000, with some of that money going toward fixing drainage issues on the field.

The drainage on the field has improved, but the edges of the stadium property are still soggy, Panaggio said.

"We wanted to build a field house, but it’d be a total waste of money," Panaggio said. "We’d be taking up the parking area and it’s wet out there. So much of it’s wetlands."

He said he had to add an asphalt road to make part of the site passable on rainy days. The 2,100 parking spaces are also inadequate for the 10,000-seat stadium, which could pack in 17,000 people for a concert.

For now, Panaggio will have to abide by the terms of the contract with the city he entered into two years ago this month. The deal calls for DME Sports to "manage and operate the stadium facilities as a first-class public sports and entertainment venue."

The lease requires DME to invest a minimum of $2 million in capital improvements by Sept. 30, something Panaggio might try to renegotiate. So far he’s invested half of that.

The agreement says the improvements should include "construction of enhanced locker rooms, stadium field covering, VIP area and visitor concession area improvements." Only those last two items have been tackled so far.

Panaggio said the scoreboard also has had "constant outages," and the audio system can emit screeching feedback noise or just go dead.

"It’s embarrassing," he said.

He’s also obligated to paying the city $150,000 per year in rent, money that goes back into stadium improvements. If his gross annual revenues exceed $3 million, he would also have to pay the city percentage rent. But so far he hasn’t made enough to trigger that.

DME also has to pay all of the stadium’s utilities and taxes, provide insurance, post a $250,000 performance bond, and contribute at least $50,000 annually to youth sports in the community.

Panaggio is saving money where he can. He let two maintenance people go, and Dean O’Brien, who had been running Daytona Stadium as a DME employee, is now consulting on the stadium as an independent contractor.

"We need to get to that next level, and then we can bring a lot of people to this town," O’Brien said. "We need to go to a $15 million-$20 million (annual) economic impact."

The flip side of Panaggio’s stadium expenses is that the agreement allows DME to collect fees from licenses, ticketing, parking and concessions. DME can also sell naming rights.

The agreements with Seabreeze and Mainland high schools allow them to collect parking and ticket revenue, and fans are allowed to bring in food. Panaggio said that leaves DME with no profit, and he would like to renegotiate those agreements.

Panaggio said he landed a "nice contract" with Coca-Cola. He also has events lined up, including drone and drum corps competitions. He also said he is on the verge of locking in a major concert tentatively set for next month.

"If I get the deal done with this concert, it will be the biggest concert this town has ever had," Panaggio said.

He said he can’t share the name of the band or bands yet. But if things work out, it could be a much-needed source of revenue for the stadium.

Running the stadium is a challenge, but he said he’ll keep working hard while future plans get figured out.

"No way are we pulling out and leaving the city high and dry," Panaggio said.