DALLAS — Two Arizona cities will have to find revenue to cover Major League Baseball’s spring training facilities improvements because Arizona Sports and Tourism Authority subsidies will fall $165 million short of expectations, officials say.
After hitting a 2007 peak of $24 million, ASTA revenues fell to $20.7 million in 2010 and are expected to rise to about $22 million this year. The authority collects a tax of 1% on hotel guests and 3.25% on rental cars in Maricopa County, which includes the county seat of Phoenix.
The state agency was created in 2000 to finance and manage construction of a new stadium for the National Football League’s Arizona Cardinals. It does not expect to cover the current shortfall in revenue pledged to the “Cactus League,” made of 15 MLB teams that conduct spring training in Phoenix and its suburbs.
ASTA is scheduled to go out of existence in 2031 under sunset provisions of the state law that created the agency.
The authority was created by voter-approved Proposition 302 with a mandate to build the Cardinals’ University of Phoenix Stadium, fund $205 million in Cactus League facilities, and pay for tourism marketing and youth-sports facilities.
With ASTA’s ongoing support, cities in the Phoenix suburbs began making pledges to build or improve ballparks to keep teams playing there or lure new ones. Voters in the East Valley suburb of Mesa last year approved a new $84 million stadium for the Chicago Cubs, the biggest draw of the Cactus League teams.
In the West Valley, Glendale committed to $63 million in stadium improvements for the Los Angeles Dodgers and Chicago White Sox, while neighboring Goodyear pledged $43 million for the Cleveland Indians and Cincinnati Reds. ASTA has $46 million pledged toward renovation of five other existing spring-training facilities over the next decade, according to the Arizona Republic. After that, the agency will have nothing left for Glendale and Goodyear, according to the league.
When Proposition 302 was approved, Arizona was one of the fastest-growing states in the U.S. with a booming housing market. Since then, growth has leveled off and the local housing market has become one of the most distressed in the nation.
“A lot of things have changed and we’re looking for new funding sources,” Cactus League president Brad Curtis told the Arizona Republic.
Standard & Poor’s has a negative outlook on its AA-plus rating of ASTA’s $90.7 million of 2007 senior-lien revenue bonds used to build the Cardinals stadium. Moody’s Investors Service rates the debt A2 with a stable outlook. ASTA’s subordinate-lien bonds, used for the Cactus League stadiums, are rated Baa1 by Moody’s.
S&P and Fitch Ratings do not rate the subordinate-lien bonds.
