DALLAS — A new 330-acre district designed to raise revenue for a $300 million renovation of Arizona State University's Sun Devil Stadium is facing some resistance as the college town and Phoenix suburb of Tempe recovers from recession.
The University Athletic Facilities District, approved by the Arizona Board of Regents last year is similar to a tax-increment financing district. Revenue would come from fees on commercial developers instead of taxes on increased property value.
The Arizona Legislature granted the authority to create the district in 2010 with passage of HB 2676. The law permits supervisors in Coconino, Maricopa, and Pima counties to create university athletic facility districts to fund construction, renovation and improvements.
While backers of the plan see it as a way to fund stadium improvements while promoting economic development, some worry that taking such a large piece of property off the tax rolls could threaten neighboring businesses that have survived the recession.
If residential and commercial development comes too quickly, the increased competition could lower real estate values, former Tempe Mayor Hugh Hallman warned in his state of the city speech last year. If the district is slow to develop, revenue for stadium improvements will be lacking, he added.
The Arizona Tax Research Association, a taxpayer watchdog organization, has opposed special districts that keep private businesses off the tax rolls. Property in the athletic district will not pay taxes to the Tempe Elementary and Tempe Union High School districts, or Maricopa Community Colleges.
So far, the district around Tempe's Town Lake is waiting for developers to make proposals. Current Mayor Mark Mitchell told the Arizona Republic that he is confident that the city and the university will manage the development successfully.
In addition to remodeling the 54-year-old stadium, ASU wants to develop hotels, restaurants, health-and-wellness clinics and spas while attracting amateur athletic events.
"The hope would be these athletic facilities, these private facilities, would all be sort of in an urbanization setting that provides a great new place that has office buildings and hotels and commercial facilities all together with a win-win-win scenario," ASU President Michael Crow told the Republic.
Other universities that make up Pac-12 athletic conference have spent nearly $1.3 billion on stadiums since 1998, officials said. Remodeling of the stadium would include a canopy for shade that would allow more day games in the stadium, which would allow more television coverage of ASU games.
ASU told state legislators in 2010 that it would need at least $170 million for structural repairs to the stadium. If ASU chose to issue bonds for the entire $170 million, the district would need to generate $13.3 million annually to pay on the bonds, according to a report submitted to the legislature. However, the cost of a more extensive remodeling is estimated at about $300 million.
