DALLAS — In the last quarter of this year, Arizona cities will face lasting decisions on how much they value sports franchises in a struggling economy.
City officials in Phoenix’s West Valley suburb of Glendale hope to hear by the end of the year that the Phoenix Coyotes have a new owner who will keep the National Hockey League team playing in the bond-financed Jobing.com arena.
If a buyer cannot be found, the NHL, which now owns the team, can sell the Coyotes to a buyer who would move them to Canada. That would leave the $180 million Glendale arena vacant most of the year.
For bondholders, the loss of the team would not endanger their investment, because the bonds are backed by city sales tax revenue.
With $500 million in debt for its sports facilities, Glendale has a large stake in the fate of the Coyotes and the Arizona Cardinals, who play in the nearby University of Phoenix Stadium. Glendale also has invested $200 million to build the Camelback Ranch spring training facility for the Los Angeles Dodgers and Chicago White Sox.
As the Coyotes anticipate declining attendance at this season’s games, Glendale is dealing with other economic perils, including the fact that revenue from tourism taxes designed to pay for the spring-training facility are running at about half of projections, according to the Arizona Sports and Tourism Authority. The authority helps finance spring training facilities and the Arizona Cardinals’ new stadium.
Amid the troubles in Glendale, voters in Mesa on the other side of Phoenix are considering whether to approve $84 million of bonds for a new Chicago Cubs spring training facility that will include an entertainment and merchandising center known as “Wrigleyville.”
The Cubs could leave for another city if Mesa rejects the new stadium and facilities. The town of Naples, Fla., has been trying to recruit the team. Despite the departure threat, groups in Mesa have launched opposition to the city indebtedness for the team.
The Valley Business Owners (and Concerned Citizens) Inc., an organization that often challenges Mesa spending and tax plans, recently announced its opposition to the Cubs deal and is forming a political action committee to raise campaign funds. Another group, the Mesa Taxpayers Alliance, also opposes the deal.
Bob Kammrath, a representative of the Mesa Taxpayer Alliance, said the price of the stadium has quadrupled and city taxpayers will bear the cost. He also questions the economic return on the city’s investment.
For some opponents of the Mesa complex, Glendale’s woes provide a cautionary tale. Ironically, Glendale ended up winning the Arizona Cardinals stadium when Mesa voters threatened to reject tax support for the project.
Glendale’s $200 million investment in Camelback Ranch included $121 million for the ballpark, $37 million for infrastructure and the rest as interim financing on the debt.
Camelback Ranch was supposed to receive additional financial support from a resort and shopping complex, but those facilities have not been built. Prospects are not promising as Arizona deals with declining tourism and a national boycott of the state in response to Gov. Jan Brewer signing of SB 1070.
The new law, which critics claim promotes racial profiling, made illegal immigration a state crime.
The major provisions of SB 1070 have been placed on hold by a federal judge, but it could come into play as Glendale tries to bring a future Super Bowl back to the University of Phoenix Stadium.
On Sept. 30, Glendale City Manager Ed Beasley delivered more bad news when he told the City Council that USA Basketball, an organization that oversees the U.S. Olympic teams, was canceling plans to build its national headquarters in the city.