LOS ANGELES -- Supporters of a proposed major league baseball stadium in Arizona cleared a major hurdle last week when Maricopa County supervisors approved a quarter-cent sales to fund $238 million of the Phoenix ballpark's estimated $278 million cost.
The supervisors' 3-to-1 vote to levy the tax came late Thursday following a six-hour public hearing at which more than 120 people voiced their opinions on the controversial project. The vote capped a three-month debate on the issue.
The path is now cleared for a private investor group led by Jerry Colangelo, president of the Phoenix Suns basketball team, to ask professional baseball owners to award them an expansion franchise.
In November, Colangelo said that he had put together an investment group willing to pay a franchise fee of approximately $110 million to $120 million to bring a baseball expansion team to Arizona.
Colangelo said he hoped to open the ballpark by the spring of 1997, but that target date has now been pushed back to 1998, Colangelo spokesman Ray Artigue said Friday.
The reason for the one-year delay is because Colangelo no longer expects baseball owners to award a franchise by April, an event that would start the sales tax collection and stadium groundbreaking.
Because baseball owners are preoccupied by a collective bargaining agreement with players, Colangelo's franchise request probably will put on hold, meaning "it is a good likelihood" a team could not begin playing until the 1998 season at the earliest, Artigue said.
Colangelo, who would serve as the managing partner of the limited partnership that would own the franchise, was pleased with the supervisors' decision, Artigue said.
Thursday's vote was a cliffhanger until nearly 11 p.m., when supervisor Jim Bruner, who had steadfastly refused to reveal his intentions beforehand, disclosed he would support the sales tax.
Before the hearing, supervisors Mary Rose Wilcox and Ed King said they would vote in favor of the tax, and, together with Bruner, provided the three votes needed for majority passage. Supervisor Tom Rawles voted against the proposal and board chairwoman Betsey Bayless abstained from voting because her family owns land in the preferred stadium site in downtown Phoenix.
Reached Friday for comment, Bruner said he decided to vote for the sales tax after reaching the conclusion that "the economics were positive for what major league baseball would do for our community."
Two main factors "more than warrant this investment by taxpayers," Bruner said. Those are "the return in direct revenues to the county as owners and landlords of the facility and the indirect economic benefit of sales and income taxes."
The quarter-cent tax would not be levied unless the baseball owners award Colangelo's investor group a franchise, Bruner emphasized. "We are not going to collect or spend a dime until we know we have a franchise," he said. If the franchise is not awarded by April 1, 1995, "this deal is null and void."
Maricopa County official Eric Anderson, who led the negotiating team that concluded a 160-page memorandum of understanding with Colangelo's group this month, said Colangelo agreed to pay up to $500,000 in "soft costs" connected with the project if the franchise is not awarded.
The sales tax would be collected by a tax district called the Maricopa County Stadium District, which was created by the Arizona Legislature in 1990. The stadium district boundaries are congruent with county boundaries; the district's directors also are the five county supervisors.
Concerning the approach the county is taking to stadium financing, Bruner said the sales tax should generate "$60 million to $65 million a year."
"Our goal is, in effect, pay-as-you-go" financing, Bruner said. "We could raise $240 million or so in four years or less, so the stadium would be totally paid for by the time the stadium is constructed and operational." At that juncture, he said the sales tax would be eliminated and "there would be no remaining debt or interest on the stadium construction."
"Frankly, I don't anticipate any long-term financing at all," Bruner said. "There may be interim borrowing" such as sales tax obligation bonds to help with short-term cash flow needs during various project phases, he said.
The stadium district negotiating team views the supervisors' vote "as certainly the most important step" toward the realization of a baseball stadium "because it lays the groundwork for the process for proceeding further," said Scott W. Ruby of Gust Rosenfeld, Phoenix-based bond counsel to the stadium district. But he noted, "There are at least 15 more agreements to be negotiated in detail."
Under the memorandum of understanding, the county stadium district is obligated to pay the first $253 million of construction costs of the retractable-roof stadium and adjacent 1,500-car parking garage. The first $238 million would come from sales taxes and the remainder, if necessary, would come from $15 million of stadium district revenue bonds. Revenue bonds would be repaid by the sale of stadium luxury suites, club seats, and memberships.
Team investors would be obligated for the $25 million difference between the stadium district's $253 million contribution and the $278 million stadium cost, Anderson said.
Thursday's hearing, attended by some 400 persons, "was very intense and security was very heavy," county spokeswoman Linda Turley said Friday. She said a number of opponents argued that the county budget is "$22 million in the red" in the current fiscal year and supervisors should not endorse spending tax dollars on an entertainment project.
But pro-stadium supervisors told critics that the proposed stadium "is an economic development project" that would create hundreds of jobs, Turley said. "Right now the county is struggling, but the economy is turning up in Arizona and there are brighter days ahead."
Maricopa County residents who live in Phoenix pay a 6.7% sales tax, Turley said. Of the 6.7%, the county collects only one-half percent that flows into a transportation fund. The remainder is split between the state and Phoenix.
