City Acknowledges Weak Economic Support for Cubs Deal

At a recent public meeting, the mayor of the City of Mesa was asked about the economic justification for the proposed Chicago Cubs spring training facility. The mayor compared the project to parks and swimming pools and stated that baseball stadiums do not “cash flow”. Specifically, related to the amount of benefit Mesa residents could see as a result of the new development, the mayor said the retail sales in the city were $50 million higher in March of 2010 than in either February or March. Translating the big number down to actual revenue by applying the current sales tax rate, this means the City of Mesa received less than $1 million as a result of spring training this year.

The bottom line here is – on an investment of $100 million, the city can only anticipate a return of less than $1 million per year. Since the debt service alone on the money needed to be borrowed to build this project will amount to about $7 million per year, a very substantial annual loss can be expected. As the mayor said, these deals do not cash flow.

Details of Proposed Cubs Project Still Up in the Air

While City of Mesa officials and Chicago Cubs executives promote the virtues of a yes vote on ballot Proposition 420, Mesa residents really do not know any more about this proposed spring training facility than they did six months ago when this development was conceived. Numerous deadlines have passed without the commitment to any sort of a binding agreement between the parties spelling out the obligations of either the city or the baseball team. While all sorts of verbal assertions are thrown about concerning this matter, any attempt to nail down the specifics of any portion of the project results in a nonanswer.

While the city and the Cubs are long on hope, they are dreadfully short on facts. As Samuel Goldwyn said, “A verbal contract isn’t worth the paper it’s written on”. Until there are more definite details available and a binding agreement on this multimillion dollar development, voters should withhold their written approval. After all, it is our money the city plans to spend.

Mesa Residents Still Wondering about Final Cubs Deal

As the recent months have passed by, there has been a great amount of news about the proposed new Chicago Cubs spring training facility which is the subject of Proposition 420 on this fall’s ballot. The location, funding and cost of this project has changed multiple times, always with the promise that a final binding agreement would spell out all the necessary details required to make an intelligent decision on this matter. So far, unless it is intentionally being kept a secret, there is no binding agreement between the parties and it appears most of the pronouncements by City politicians are the equivalent of throwing darts with hope of hitting a bull’s-eye.

The Proposition itself only says what is required by law. How much this development will cost, where it will be and how it will be funded is anyone’s guess. The City insiders are essentially asking the voters to trust their judgment with no restraints.

Sale of Unproductive Assets Strikes Cord with Sports Fans

Apparently the idea of selling non-revenue producing assets owned by the City of Mesa has found favor with supporters of Proposition 420 which would authorize the proposed new Chicago Cubs spring training facility to be built somewhere in Mesa. As has been extensively reported, the city hopes to pay for the debt incurred in building this new Cactus League complex via the proceeds from unloading city-owned land in Pinal County which has been on the market since 2007. Perhaps the thinking here is that the land will sell faster now that some really worthwhile use has been identified for the money.

In any case, avid sports fans are encouraging Mesa to liquidate other property with no history of generating income. A plan which recently surfaced envisions a championship stickball arena funded by the sale of libraries and parks within city. Advocates say libraries are superfluous because residents can learn everything they need to know from TV and parks are unnecessary since kids can play in the public streets. In fact, many people believe dodging cars to be both a sport and a skill. While local politicians are always willing to consider spending other people’s money on frivolous ventures, how far this idea advances may well depend on the outcome of the Cubs ballot measure this fall.

Mesa and Cubs Promote Statewide Economic Impact

Like many of the baseball teams in the Arizona Cactus League, the Chicago Cubs attract a sizeable number of out-of-state fans for spring training contests. In addition to attending baseball games, these tourists spend money on accommodations, meals and other attractions in Arizona. The figures most often quoted by Cubs boosters are $138 million in annual statewide economic impact and $5 million a year in statewide tax revenue. The City of Mesa claims these numbers support the spending of $100 million, plus financing costs, to construct a new spring training complex for the Cubs.

Unfortunately for the residents of Mesa, the amount of statewide spending and statewide tax revenue are immaterial to the financial viability of this development. The only public funding source is the City of Mesa. So, how much tax revenue will flow into city coffers because of the Cubs presence? Oddly enough, the tens of thousands of taxpayer dollars spent on studies never addressed the matter and city officials have not responded to specific questions on this point. The fact is, most of the tourist dollars will be spent outside of Mesa and the city will benefit by only a small fraction of the $5 million in tax revenue.

Mesa Promise – No New Taxes or Fees for Cubs Spring Training

While the cost of building the proposed Chicago Cubs spring training facility in the City of Mesa keeps creeping upward, city officials vow no additional taxes or other fees will be placed on Mesa residents to pay the bills, regardless of the final tab. This is listed as one of the ten most important reasons to vote for spending millions of dollars on this project. The current plan calls for raising taxes on tourists via an increased bed tax on hotels and motels along with the sale of city-owned land in Pinal County. Of course, the land being sold was purchased with money from residents of Mesa who paid taxes and fees to the city. The people of Mesa own the land, not the politicians in power at the moment. This is simply a case of following the OPM (Other People’s Money) doctrine, proving once again that it is relatively easy to give away what you don’t own.

Who knows, maybe we could get the Yankees and Red Sox to move spring training to Mesa if we were willing to sell all the libraries and parks owned by the City of Mesa. Why not sell City Hall? Just remember to take the politicians out before showing the property, as they definitely diminish the value.

City of Mesa Claims Big Savings by Abandoning Hohokam Stadium

According to those in favor of building a new Chicago Cubs spring training facility, an important money-saving element of the new agreement between the City of Mesa and the baseball team is a clause wherein the Cubs pay all operating expenses at the new stadium. This is listed as one of the top ten reasons to vote yes on Proposition 420. The city says it presently loses $2 million per year operating Hohokam Stadium and Fitch Park where the Cubs presently conduct spring training.

While it is true the City of Mesa is not responsible for operating the proposed new stadium, it is responsible for maintaining four major league-sized practice fields and a parking lot for thousands of cars at the new site. In addition, Hohokam Stadium and Fitch Park will still exist and will need to be maintained or demolished. Since the stadium is only 14 years old, it would seem likely the city will continue to maintain the improvements.

Don’t hold your breath waiting for these savings to appear on the bottom line. There is every reason to think the combined cost of keeping up all of the old training facilities and part of the new project will cost just as much as in the past.

Who Controls Use of the Proposed New Mesa Cactus League Baseball Stadium?

A point recently made by supporters of Proposition 420 concerns public access to the new Chicago Cubs spring training project if it is built. The Keep the Cubs campaign says one of the reasons to vote yes on this ballot measure is that the new ballpark and practice facilities will be available to the community. The implication here is that the public would be able to use these improvements for a portion of year.

Obviously, the showpiece of the development, and the most expensive element, will be the Stadium where Cactus League games are played. According to the only existing agreement between the Cubs and the City of Mesa, it appears the Cubs are the only ones who determine the use of the stadium. Paragraph 1.6 of the January Memorandum of Understanding says in part “Cubs shall have exclusive control over the use, management, operation and scheduling of the Stadium and Ancillary Stadium Facilities and may use the Stadium and Ancillary Facilities for any purpose….” The Ancillary Facilities include two of the full-sized practice fields, the clubhouse and all specialized training improvements. The rest of the project consists of four practice fields. The Cubs have exclusive use of these for three months of the year.

So, it would appear to be more accurate to say the public will have access to a portion of the development some of the time.

Cubs Boosters Bite the Bullet on Cost of Mesa Spring Training Project

For months, press reports have stated emphatically that the total public investment in the proposed new Chicago Cubs spring training facility would be capped at $84 million. Any required funds in excess of this were supposed to come from the wealthy owners of the baseball team. Additionally, this was yet another important fact which the “Keep the Cubs – Yes on 420” campaign has stressed in recent correspondence as part of a ten point manifesto urging residents to vote yes on Proposition 420.

On September 29th, City Manager Chris Brady was quoted in the Arizona Republic as saying the new working number for capped cost to taxpayers is $99 million. This 18% increase came about because the city decided to estimate the cost of infrastructure which the city is required to provide for this development. Although the City of Glendale spent $37 million for infrastructure on their Cactus League project, Mesa officials say the cost for the Cubs facility will be far less than the Glendale total. Time will tell.

Is there anything else omitted from the new cost projection? Well, there is the matter of a parking lot for thousands of cars, specifically mentioned in the Memorandum of Understanding signed back in January, as being a cost the City of Mesa must absorb in addition to the $84 million and in addition to the infrastructure. Add in the expense of financing all of this, and you are looking at a really, really big number.

Yes on 420 Campaign Touts Stadium Rent as Big Plus

Yes on 420 Campaign Touts Stadium Rent as Big Plus

According to recent E-mails and letters distributed by those in favor of a yes vote on Proposition 420 this fall, there are ten significant reasons to approve development of a new spring training facility for the Chicago Cubs baseball team. Since there is much at stake in making an informed decision on this matter, it is probably best to examine these claims one by one.

Among the important facts the “Keep the Cubs – Vote Yes on 420” people would like everyone to know is that the Cubs will pay rent for use of the stadium and other improvements. Since the Cubs and the City of Mesa have not revealed what the rental amount will be, a little research dug up the industry standard for Cactus League teams. Available for all to see on the internet is the agreement between the City of Glendale and the Los Angeles Dodgers and the Chicago White Sox regarding the terms of use at the new Glendale-owned facility on west Camelback Road. This project has won numerous awards and has been described as the “Taj Mahal” of spring training facilities. So, how much rent can you get for such a state-of-the-art facility.

It turns out each team pays the City of Glendale a total of one dollar ($1.00) per year in rent, for a grand total of $2 annually. The good news here is that the rent is payable in advance, meaning Glendale can draw interest on these funds for twelve months. No wonder Mesa politicians are so anxious to spend vast sums of taxpayers money on this concept. Where else could you get $2 per year rental income on an investment of $200 million?

City of Mesa Stands by Wildly Optimistic Numbers to Support Cubs Deal

As time draws closer for voters to make a decision on the proposed new Chicago Cubs spring training complex, the City of Mesa remains steadfast in claiming an economic activity benefit of $138 million annually due to the Cubs presence. This number is based on the results of January, 2010 study paid for by the city. A close look at the basis of this claim reveals that the study assumed that every person who attended every Cubs game, home or away, was a Cubs fan. In other words, nobody came to see the other team. Obviously, that is ridiculous. Even at the Cubs home games, some people are fans of the opposing team and some people are simply baseball fans who favor neither team.

Comparing the bloated Mesa assertion to some other recent claims by public agencies in support of spring training makes the $138 million number look even sillier. Here in Arizona, the City of Peoria has begun negotiations with the Mariners and Padres regarding upgrading their spring training facilities. Peoria says the two teams combined contribute $60 million of economic activity annually. And, despite the fact that attendance at the Peoria stadium outdraws the Cubs by 40%, Mesa still thinks the Cubs have an impact over twice as great. Meanwhile, over in Florida, Lee County has just decided to build the Boston Red Sox a new spring training complex. The county says the Red Sox have an impact of $21 million annually. Putting this in perspective to the Mesa claim, the Cubs generate seven times the spending of created by the Red Sox. This is really unlikely.

Finally, the City of Mesa economic activity number is based on statewide economic impact. How much money will be spent in Mesa? No one knows, including the city. But since half the spring training games are played elsewhere and no one can control where fans stay and eat, it is a safe bet that the real number is only a fraction of the public hype.

Escalating Costs Fail to Dim Mesa Enthusiasm for Cubs Deal

Imagine being a prospective buyer searching for a residence and finding an attractive home in a desirable neighborhood with an asking price of $260,000. Since that price falls within the range you had planned to spend, an offer is made to buy the property. Unfortunately, another buyer has swooped in ahead of you and bought the home. Because you liked the location and you liked the house, you proceed to search for a similar residence nearby. Though there are other homes for sale in the neighborhood, they are quite a bit more expensive. Nevertheless, you decide the extra money is well spent and end up buying a property virtually identical to the first home for a cost of $840,000 or more than triple what you had originally planned to spend.

The City of Mesa is on the verge of making a similar decision. Back in February of this year the city issued press releases stating that Mesa residents would pay $26 million toward a new Chicago Cubs spring training facility. Today, the same city officials say Mesa residents will pay $84 million toward a new home for Cubs spring training. Yet, despite the ballooning costs to the taxpayers, city officials steadfastly maintain the economic viability of the deal. All those taxpayers who believe in grossly overpaying should favor the Cubs development, while those with any sense of value will be against the project.

Opposition Grows to Cubs Project as Indecision Prevails

The lack of definite information on key elements of the proposed new Chicago Cubs spring training facility has caused an increasing number of Mesa residents to wonder whether the upcoming November vote on the issue is premature. While month after month goes by, press reports have continually changed focus on the location of the development as well as the way in which it will be finance. Still, at this late date, there is apparently no final agreement between the two parties as to who pays for what. The general feeling is that neither the City of Mesa nor the Cubs have really spent enough time to think this thing through

So, why not take the time to finalize all the loose ends involved in the deal and postpone the vote until next year? While this could very well resolve a number of matters of concern to Mesa residents, the Cubs and the city appear destined to push forward with ballot Proposition 420 regardless of how well informed the voters may be.

City of Mesa Tries to Broker Deal for Cubs at Waveyard Site

With time running short before a November election on the matter, the City of Mesa is in the midst of an effort to squeeze both the proposed Waveyard project and the proposed Chicago Cubs spring training facility in a site located at the southeast corner of the Loop 202 and Loop 101 Freeways in west Mesa. The only way this can happen is if the Waveyard water park folks scale back their land usage to a shadow of the original plan or the Cubs settle for less room. There simply is not enough space to accommodate both developments as they were conceived.

It seems the city is more enthused about the possibility of this event actually occurring than is the baseball team. A current news report quotes a Cubs executive as saying “the team needs to know more before endorsing the idea.”

As Election Nears Details about Mesa/Cubs Deal Still Lacking

While the campaign signs encouraging residents to vote yes on Proposition 420 are sprouting all over the City of Mesa, details are sadly lacking about this ballot measure which would authorize a new Chicago Cubs spring training project. Where will it be? How much will it cost? What will it look like? Well, nobody knows. Apparently, the idea here is – “Trust us. We know best.”

Although certain sources within Mesa have said a draft final agreement between the Cubs and Mesa has been floating around for weeks, officially there is no agreement between the parties. The mayor says there will be ample details on this matter revealed to the public well before the election. Since early ballots go out the first week of October, one would think now is the appropriate time to disclose those details.

Hidden Costs Add Up Fast on Cubs Spring Training Complex

While the City of Mesa works hard to convince voters of the economic soundness of a plan to construct a new spring training facility for the Chicago Cubs baseball team, little is being said about the costs involved in the project that go beyond the often repeated $84 million mentioned in the Memorandum of Understanding signed back in January. Specifically, above and beyond the $84 million, the city is obligated to pay for all infrastructure related to the development, the city is obligated to provide stadium parking adequate to accommodate 15,000 fans and the city has to deal with the cost of obtaining the funds. Another item seldom mentioned is the value of the taxpayer’s land that will be given over to the Cubs for their exclusive use. If, for example, a city-owned site of 100 acres with an appraised value of $10 million were utilized for the practice facility, the Cubs would receive a benefit in excess of $5 million versus buying the land. This comes about because the Cubs have the sole year-round use of over one-third of the training area, including two practice fields, the club house, batting and pitching cages, etc. as well as the exclusive use of the balance of the project for three months of the year.

To paraphrase the late U. S. Senator, Everett Dirksen, “A million here, a million there, pretty soon, you’re talking real money.”

No Spring Training Agreement in Force between Mesa and the Chicago Cubs

While the City of Mesa and the Chicago Cubs gear up an aggressive campaign to rally voters to their cause, a positive position on Proposition 420, some taxpayers are wondering whether even having Proposition 420 on this fall’s ballot is premature since there is a definite lack of information on the question at hand. Cheerleaders for the proposed new Cubs spring training complex point to the Memorandum of Understanding signed by the parties back in January as providing the substance of their agreement on the issue. However, people who understand the meaning of the words “Not binding” and “Not legally enforceable” look at the matter differently. In fact, whatever little validity this memo had has long since expired. More than one drop-dead date has come and gone, including the July 12, 2010 to have a signed final agreement in place.

Proposition 420 merely asks voters to agree to authorize the City of Mesa to spend in excess of $1.5 million on a Cactus League baseball facility. How much more than $1.5 million? Well, no one knows. Could it be $200 million, $300 million, or $500 million? Yes, yes, yes. There is no maximum amount, only a minimum amount. How about mentioning the location of the stadium and practice fields? No, that’s the sort of information that is apparently best kept a secret until after the election. The proposition doesn’t even mention the Cubs. Could it be the stadium and practice fields are being built for an expansion team? Based on what little Proposition 420 says, yes, that could be the case. Maybe those guys from the Field of Dreams can be enticed to relocate.

Proposition 420 is literally a blank check which will be signed by the taxpayers of Mesa.

Mesa Mayor Waffling on Cubs Deal Promises

Over the past several months, the mayor of the City of Mesa, Scott Smith, has repeatedly promised voters there would be a definite site identified for the proposed new Chicago Cubs spring training facility prior to a fall vote on the issue. At a Town Hall meeting in July of this year, the mayor pledged to pull the issue off the ballot if a specific site were not identified. Recent press reports, however, seem to contradict the mayor’s previous statements. A report in the Arizona Republic on August 31, 2010, quotes the mayor as saying “there is almost no chance of a definite site being on the table when Mesa voters decide to approve the Cubs project.”

While it is not a surprise to find out that yet another politician may weasel out of prior commitments to voters, this does bring into question virtually everything else involved concerning this particular deal. What about the mayor’s statements regarding the dollar amount of economic activity? What about the mayor’s assurance that costs are under control? What about the mayor’s statements that nearby residents will be afforded an opportunity to have input on the site decision? What about the mayor’s claim that there will be no new tax increases because of the Cubs deal? What about the mayor’s claim that the adjacent commercial development, dubbed “Wrigleyville West”, will contribute big bucks to city coffers?

Well, there is a good possibility the mayor meant what he said on all of these occasions: at least to the same extent he meant what he said about the site location.

City of Mesa Promoting the Value of Thin Air for Spring Training

Too often in life, people take for granted those things which surround them on a regular basis. An example would be the air we breathe day after day. While most of us are likely to admit air is important, it would be difficult to find two people who would come to the same conclusion on the specific worth of air. Finally, someone is doing something about establishing the value of thin air.

The City of Mesa has placed a value of over $100 million on the concept of a new spring training facility and they would like the taxpayers of Mesa to fund this idea. Because there is no site for the development and because there is no design for the development, voters this fall are being asked to imagine what $100 million will buy. While they are at it, the voters also need to dream about the value of the adjacent commercial real estate development known as “Wrigleyville West”, because no one knows what that may look like either. Getting behind this project requires a substantial amount of faith in a notion lacking any substance.

Between now and the election, a dollar well spent would be renting the baseball fantasy movie Field of Dreams. Before anything meaningful transpires on the screen, a location for the ball field was chosen. What did the screenwriters know that the Mesa politicians don’t?

What’s Left Behind After New Cubs Stadium Opens?

A concern of City of Mesa taxpayers regarding the proposed new Chicago Cubs spring training complex is the fate of existing facilities which have been used over the past 14 years for same purpose. These developments, Hohokam Stadium and Fitch Park, are located along Center Street near downtown Mesa. Despite some revenue from spring training activities and other uses, the city loses million annually operating the projects.

If the Cubs move on to another location in the near future, Hohokam and Fitch will still exist and will need to be maintained on an ongoing basis. This cost will be in addition to the expense of operating and maintaining the new practice fields. City officials have stated their intention to offer the abandoned facilities as the spring training home for another Major League Baseball team. While at first glance this sounds like a viable solution, keep in mind the mayor of Mesa recently said the city felt it would take $30 to $40 million to bring the existing parks up to modern standards to meet the Cubs needs. Would another team expect less? Probably not.

Authorizing the building of a new spring training home for the Cubs today exposes Mesa taxpayers to huge additional expenditures down the road.

Keep the Cubs Campaign to Kickoff Soon

The Chicago Cubs have announced plans to blanket the City of Mesa area with a campaign to win support for ballot Proposition 420. On November 2, voters will be asked to approve spending money for a new spring training facility to be used by the Cubs. While wording of the proposition asks voters to support spending in excess of $1.5 million on a Cactus League sports complex, the actual cost of the development is likely to be 100 times the number mentioned on the ballot.

This effort, to be known as Keep the Cubs, should kick off in about a week with meetings taking place with various civic groups and the introduction of a website at www.keepthecubs.com. Hopefully, there will be some actual data available that would support spending a huge sum of money in support of a private enterprise at the same time the local economy is in the tank.

Public Money – Secret Negotiations

While the City of Mesa works hard to convince voters that the spending of well over $100 million on the proposed new Chicago Cubs spring training facility is a good investment, precious little information has been made public regarding the details of this arrangement between the city and the baseball team. Officially, there is no location for this project, there is no design for this project, there is no binding agreement delineating responsibilities of the parties and there is, in short, really nothing definitive about this venture. With a proposition measure already approved for the fall election, it seems voters will be asked to trust the judgment of their elected officials on the matter. Negotiations continue – in secret – between the parties.

Meanwhile, some concern has been expressed about the welfare of some other city programs. Beyond the elimination of hundreds of employment positions over the last couple of years, the city has recently decided to underfund employee retirement benefit funds. By coincidence, the sum of this underfunding over the past two years was somewhat over $100 million. Of course, this does substantiate the official city position that money is available to develop the spring training facility; it is just a matter of prioritizing where the available funds should be spent. This came about, no doubt, with the consent of the retirees involved.

The Spring Training Shopping Experience

There have been a number of reasons cited for the Chicago Cubs desire to relocate from their existing spring training facilities in the City of Mesa. Among these is the stated intention of the Cubs organization to create a commercial real estate development to be known as “Wrigleyville West” adjacent to the new stadium complex. There is insufficient land available in the immediate vicinity of Hohokam Stadium to build this type of improvement.

Both the City of Mesa and the Cubs hope that Wrigleyville West will generate a substantial amount of year-round activity near the new spring training complex. Of course, what they wish to avoid is the wasteland-like appearance surrounding some other recently completed Cactus League stadiums. Which of these scenarios plays out in the proximity of the new Cubs facility is greatly dependent on the attributes of the specific location where the project is constructed.

Of those sites which currently seem to be in contention for the spring training project, the location least likely to support an adjacent commercial development would be the location near downtown Mesa at University Drive and Mesa Drive. The area with the best chance of sustaining a viable Wrigleyville West is the Waveyard site near the intersection of the Loop 10 and Loop 202 Freeways.

Cubs Boosters Still Pushing Red Mountain Ranch for Spring Training Site

Despite the fact that the mayor of the City of Mesa says there is no particular site favored for the proposed Chicago Cubs spring training project, various groups keep promoting the intersection of Thomas Road and Recker Road as a convenient location for such a development. Continuing a trend which began in January, the latest effort was comprised of an E-mail entitled “CHICAGO CUBS: VOTE YES 420”. This communication was sent to residents of the Red Mountain Ranch community and espoused the convenience of being able to walk to a baseball stadium and the adjacent commercial development dubbed “Wrigleyville West”. The reference to “420” identifies the number of the proposition on this fall’s ballot which asks voters to support city funding for the spring training facility. Under the circumstances, it may be hard to convince nearby residents that the Red Mountain area is not a preferred site for the new stadium and everything else that comes with it.

Mesa Assures Residents City is not Broke

During a recent Town Hall-style meeting, the mayor of the City of Mesa took the time to tell those in attendance that the city was not broke. This was a prelude to a dissertation on the proposed Chicago Cubs spring training facility to be paid for by Mesa. Perhaps someone had previously implied present economic circumstances were placing a strain on municipal resources and spending big money on a sports complex for use by millionaires was not the best use of the limited funds which were available.

While the mayor is correct in his assertion that the city is not broke, there are some disturbing fiscal trends which could cause a reversal of fortune in the future. Over the past several years, the city has missed budgeted revenue projections by a wide margin; last year’s income fell $46 million short of official estimates and the previous year was off the mark by $61 million. Of course, one way to deal with a lack of money is to borrow some. Over the past decade Mesa’s long-term obligations have increased by over $600 million and, in the same time period, per capita municipal debt has more than doubled from $1,300 per resident to over $2,700 per person.

So, in light of the above financial missteps, it is understandable why a number of people question the promised economic benefit which can be expected by investing vast sums of money in a new spring training project.

Time to Review the Fine Print in Cubs Memo of Understanding – Again

One of the key elements in determining the economic viability any sort of real estate development is the initial cost of the project. This, in turn, is weighed against the expected return on this investment. In the case of the proposed Chicago Cubs spring training facility, the number repeatedly mentioned in the press as the maximum public investment is $84 million. While the $84 million figure is mentioned in the Memorandum of Understanding signed back in January by the City of Mesa and the Cubs, it does not represent the entire public investment.

Disregarding any expenses for operating cost or future improvements, the initial cost of the project is not capped at $84 million. The $84 million number is referred to in the memo as the “Financing Amount”. Specifically, as enumerated in Paragraph 2.1, subsections (a) through (l), there are additional costs, over and above the $84 million, which must be paid by the city. The most significant of these costs are all infrastructure related to the facilities and the primary stadium parking. To give these elements some perspective, the City of Glendale spent $37 million on infrastructure costs related to the recently completed White Sox and Dodgers Stadium. Now, the cost has risen to $120 million or so. Since the city does not have the money lying around, add the cost of financing for 25 or 30 years and you quickly have a $200 million development.

Cubs and Mesa Narrow Spring Training Site Search - Sort Of

After seven months of effort, the City of Mesa and the Chicago Cubs have yet to name a specific location for the proposed new spring training facility to be constructed somewhere in Mesa. The latest word from city officials is that there are three potential sites under consideration. According to the mayor, this is one more than four months ago, but several less than last month. In March, both the Cubs and city officials said they expected a site to be named by the end that month.

The front-running locations identified by the mayor on July 30, included the Riverview area near where the yet-to-be-started Waveyard project was to be developed, an area close to downtown Mesa and one remaining site in northeast Mesa. Apparently, another area previously considered to be on a short list was near the Gateway Airport. This site has now been rejected. Some skeptics believe the delay involved in the decision-making process is merely a ruse to deflect attention away from the Cubs preferred site near Red Mountain Ranch at Thomas and Recker Roads.

Mesa Still Undecided on How to Finance Cubs Training Project

As is often the case, especially when it comes to spending money you do not have, the devil is in the details. Although the City of Mesa says it is 100% committed to funding the Chicago Cubs spring training facility within the timeframe that will be set in a final agreement with the baseball team, it is uncertain how that will be accomplished. The mayor recently said selling bonds was one possible solution, but there are other possibilities. Unfortunately, just about all the options require big bucks up front to build the baseball stadium, practice fields, clubhouse, parking and required infrastructure.

Of course, without a specific location, without a final agreement between the parties and without any design it is really difficult to nail down the costs involved. The amount most often quoted by Mesa officials is $84 million. However, this is actually just the opening amount or “get in price” sold to the taxpayers. An example of what will really happen cost-wise can be found in the devilish financial details which swirled around the recently completed Glendale-owned spring training project on the western side of the metro area. At its inception, the City of Glendale issued a press release stating the cost to the city would be $81 million. A year later when the facility was under construction, the city upped the ante to $115 million. Upon completion, the City of Glendale said the actual cost to the city was somewhat more than $150 million. By way of explanation, Glendale officials said that $81 was never intended to be viewed as the total cost. For example, just like the Mesa estimate of $84 million, the $81 million did not include infrastructure and a few other things. Infrastructure alone ended up costing $37 million at Glendale. Obviously, details of this sort can add up fast.

In the end, Glendale borrowed $200 million which must now be paid back – with interest. Yet another detail which adds to the cost.

Mesa Mayor Says Stadium Site Will be Identified Prior to Election

At a Town Hall meeting on Tuesday, July 20, City of Mesa mayor Scott Smith said that a specific location for the proposed Chicago Cubs spring training project would be revealed prior to this fall’s election. A ballot measure is required by Mesa ordinance to approve any expenditure in excess of $1.5 million for sports purposes. The mayor went on to say that plans would be available showing the layout of the finished development. What was not mentioned at the meeting was whether there is a strong preference on the part of the Cubs regarding where the facility should be located. According to the Memorandum of Understanding between the team and the city, the Cubs have the final say on where the stadium and practice fields will be constructed.

Mesa Officials Change Course on Location of Cubs Training Facility

Contrary to what was promised to taxpayers a few months ago, it now appears the City of Mesa does not intend to reveal a specific location for the proposed new Chicago Cubs spring training project prior to ballots being cast on the matter by voters in the November election. The latest announcements indicate that a city-wide search for a location is underway and there may not be a final selection in time for taxpayers to know where the development will be or what the finished project may look like. This directly contradicts the mayor’s statements on April 1 of this year when he stated there would be definite location and pictures and plans well before the fall election.

So, now it would seem the city will ask voters to approve the spending of tens of millions of dollars without knowledge of any details concerning the issue. This is the equivalent of a real estate developer asking for an approval of a huge shopping center prior to letting anyone know what neighborhood will be impacted and without revealing any design features. The blanks will simply be filled in later. This has never happened elsewhere in Arizona.

Mesa Remains Silent on Direct Benefits of Cubs Spring Training

Now that it appears that there is a very real possibility of the City of Mesa footing the entire bill for the cost of the proposed Chicago Cubs spring training facility, this is probably a good time to figure out just exactly what in the way of revenue would flow to city coffers if the project goes forward. Oddly enough, the studies commissioned by the city never addressed this particular issue. While various numbers are quoted by city officials, none of them pertain to the revenue which might be anticipated to be received by Mesa from taxes and revenue sharing.

The statistic most often quoted by Mesa officials is the sum of $138 million which represents a recent study’s estimate of the total amount of economic activity generated by Cubs spring training statewide. It is important to note that economic activity is not income. The same study estimated that the total amount of tax income created as a result Cubs spring training was about $5 million statewide. This includes sales tax, payroll taxes, gasoline taxes, etc. Mesa’s main source of revenue would be from two sources; sales tax and hotel bed taxes. Because the rate of tax at the city level is far less than at the state level, Mesa’s income would be a fraction of the $5 million figure. Just how small this number is explains why nobody has bothered to hazard a guess.

Deadlines Loom for Cubs Spring Training Deal

In order for development of a new spring training facility to proceed, two critical terms of the memorandum between the City of Mesa and the Chicago Cubs baseball team must be met by Monday, July 12th. The first of these elements concerns public financing for the project while the second involves the signing of a final binding agreement which will set forth the specific responsibilities of both parties over the 25-year anticipated life of the relationship.

With regard to public financing, the deadline pertained to the passage of State of Arizona funding legislation. Although this has not happened, the city has likely complied with the spirit of the memo by committing to finance the entire amount of the development if no other public resources come available over the next year or so. The precise details are somewhat immaterial as long as the final agreement spells out the city’s willingness to raise all construction monies which may be involved.

The signing of a final agreement will likely be a little more complicated with lawyers from both sides wrangling over the final wording. The largest remaining piece of the development puzzle which has not yet been publicly announced concerns the design and specific site location for the spring training facilities. Would you sign a binding long-term agreement without knowing where the project will be built or how it will look? Having had extensive experience in dealings within the business world, the Cubs likely will know exactly where the project will be located and how it will appear in finished form prior to inking any final agreement.

Mesa City Council Meets Today to Decide Cubs Stadium Ballot

It is anticipated that the final language for the November election ballot measures concerning the Chicago Cubs spring training project will be determined by the Mesa City Council on Thursday, July 1. Likely there will be two issues involved. The first deals with the necessity of obtaining voter approval for any expenditure above $1.5 million for any sports related purpose and the second will probably seek authorization for an increase in the existing hotel tax in Mesa.

Although voters will be asked to approve this facility, it is unclear whether the city intends to disclose any information about where it will be located or what it will look like. On April 1 of this year the Mayor promised voters “we will have a specific site and we will have pictures. We will have plans…..well before the November election.” Exactly when this will occur is unknown, but it is already July and early ballots go out in September. It probably depends on the city’s definition of “well before.”

City’s Claims for Cubs Training Impact Hard to Verify

Press reports are repeatedly filled with remarks made by City of Mesa officials (mostly the Mayor and City Manager), that the loss of the Chicago Cubs spring training would be an economic disaster for Mesa, Maricopa County and the State of Arizona in general. These statements are based on a couple of studies paid for by the city over the past year or so. While there are many exaggerated claims made in these studies, it is best to focus on these overly optimistic assertions one at time. Because the primary basis for all of the economic impact of the Cubs spring training revolves around attendance at Cubs contests played with other Cactus League teams, it seems logical to examine just how many people are drawn to these events.

The City Claim – If the Cubs were to leave Arizona, the Cactus League would suffer a loss of 345,000 attendees.

The Fact – The number used by the city (345,000) is greater than the total number of people who attended all of Chicago Cubs games played, both at home in Mesa and at other teams’stadiums as well. Beyond the simple impossibility involved here, it would also be true that not everyone going to a Cubs game is a Cubs fan since baseball does require two teams.

Mesa Looks at $200 Million Tab for Cubs Spring Training Complex

Taking a page out of the Glendale playbook, the City of Mesa is now facing the prospect of shelling out over $200 million for the privilege of building a new practice and stadium facility for the Chicago Cubs. How could that be when the city repeatedly says there is an $84 cap on public participation? Well, let’s start with the fact that the agreement between the Cubs and the city states that, in addition to the $84 million, the city is responsible for the entire cost of infrastructure and public parking. How much could that be? Glendale spent $37 million on infrastructure and still ran out of money to complete roadways and other improvements. Add in over $80 million in debt service over the planned 30-year bond period and you’ve got your total; unless, of course there are cost overruns.

Anyway, the City of Glendale said at the outset their stadium and practice fields would cost $81 million. One year into construction, the price had escalated up to $115 million and upon completion the total was over $150 million – plus interest since they borrowed all the money. This comparison is especially appropriate since the Glendale project is mentioned in the memorandum between Mesa and the Cubs as a development pattern they wish to follow.

City of Mesa Puts Focus on Red Mountain Site for Cubs Project

Sounding for all the world like a company denying the possibility of bankruptcy on the day before filing court papers for that very purpose, the City of Mesa has elevated the level of denials regarding the selection of a specific site for the proposed Chicago Cubs spring training facility. The official word is that there are many sites still in the running for this development. However, many residents at Red Mountain Ranch don’t seem to be buying that line. Perhaps this is because the mayor has repeatedly said there were only two sites in contention since January and Red Mountain was one of these. Also, the public statements by both the Cubs and the city that a particular location would be identified by the end of March has caused a loss of credibility to both the team and elected representatives.

In any case, the lack of any direct answer to questions by residents over a long period of time has only increased anxiety regarding the matter and has led many to conclude that the Thomas Road and Recker Road site in east Mesa has already been chosen. Time will tell.

More Misinformation on Cubs Spring Training Project

For the umpteenth time, or at least very close to that often, incorrect information has recently been spread to support the development of the proposed Chicago Cubs spring training facility slated to be built in the City of Mesa. On this occasion, the Arizona Republic published an editorial on June 12 with the heading “Stadium gamble is worth the risk.” Within the body of this piece was the statement, “If the Cubs leave Arizona and are replaced by a team with average attendance, the Valley still stands to lose nearly $138 million annually in economic activity.” This is not what the study commissioned by the city said and is incorrect on two counts. First, the number of $138 million referred to the statewide economic impact, not the Valley impact. Secondly, the $138 million amount was stated in the city’s study to be what would be lost if the Cubs were not replaced by any other team, not, as stated in the Republic, if they were replaced by a team with average attendance.

This is at least the fourth time this particular publication has made the same incorrect assertion, despite the fact anyone can go to the Mesa web site to read or copy the complete study. Apparently, practice does not make perfect at The Arizona Republic.

Unanswered Questions about Mesa Spring Training Project

The latest City of Mesa funding plan calls for selling 30-year bonds to build the new Chicago Cubs spring training facility. Money for the payments on this debt would primarily come from the incremental sale of farm land which Mesa owns in Pinal County. City officials claim this land is worth “at least $100 million”. That being the case, wouldn’t it make more sense to simply sell the land now and not be forced to pay interest on the bonded debt? The savings would be at least $72 million over the life of the bonds. The answer, of course, is that the land in Pinal County is not worth anywhere near $100 million and the city is fully aware of that fact.

With regard to the 30 years of payments on this project, obviously, one advantage to borrowing money over a longer period of time is a lower periodic payment on the debt. This is true on home mortgage loans and on municipal bonds. However, there are some drawbacks involved. The interest rate on a longer-term loan is higher than over a shorter borrowing period in both cases; mortgages and bonds. In the case of the Cubs facility there is another consideration – the agreement with the Cubs is only for 25 years with the provision that the Cubs can leave after 20 years by paying a penalty. Does it make sense to still be paying for this development in those years after the baseball team has moved on to greener pastures?

City of Mesa Plan Doomed by Facts

Like every other notion put forth since the beginning of this year, the very latest idea floated by the City of Mesa to finance the proposed Chicago Cubs spring training project is, economically speaking, a nonstarter. The most recent concept depends on selling 11,000 acres of city-owned irrigated farm land in Pinal County to make the payments on money borrowed to build the Cubs project. Press reports quote city officials as saying the land in question is worth at least $100 million, or about $9,000 per acre. Well, if the land is really worth that much, why not just sell it now and pay cash for the spring training complex, thereby saving the financing cost?

The answer, of course, is that the Pinal County land is not worth anywhere near $100 million. It is possible that the land was once worth that amount, but like other kinds of Arizona real estate, the average price paid for agricultural property has plummeted over the past few years. In fact, rural land prices in Pinal County peaked in 2005 and have since spiraled downward. Worse yet, not only are prices still falling but buyers are virtually nonexistent. However, for anyone wishing to purchase such property, there is an abundance for sale. Asking prices for irrigated farm land currently for sale in the vicinity of Mesa’s property range from $2,500 to $4,500 per acre. Not only is there no hope of raising sufficient funds to finance the spring training facility, there is a strong probably that the mandatory sale of this land would yield less than what was paid for this asset 25 years ago.

Mesa Plans to Borrow from Peter to Pay Paul

Looking at the press releases, the public has been led to believe that the City of Mesa has somehow miraculously found the resources to build a new Chicago Cubs spring training facility without the help of any state assistance. The miracle is in the form of thousands of acres of unneeded Pinal County land owned by Mesa which can now be sold off to service the debt which will be incurred to build this development. While the impression given is that this is new-found money, a closer examination shows this is not the case at all.

The Pinal County land in question has been listed for sale for over three years. At the time these parcels went on the market, the city issued a press release which stated, “The proceeds from the land sale have already been projected in the City’s budget forecasts.” In other words, whatever amounts could be anticipated from selling this asset was already allocated to some future expense. If the funds from land sales are now diverted to the Cubs project, some other means will have to be found to replace a budget revenue gap in years to come. This amounts to nothing more than “kicking the can down the road” and almost guarantees the need to cut additional essential services or raise taxes.

Economic Viability of Cubs Spring Training Project in Doubt

The latest pledge by the City of Mesa towards financing the Chicago Cubs spring training complex has virtually no chance of showing a return on the investment. Whereas the initial plan unveiled back in January stated that the State of Arizona would pick up at least one-half the cost of the development, the city has now committed to fund the entire public portion of this project in an effort to meet a July deadline regarding financing.

The primary way government agencies generate income as a result of business and development projects is through the receipt of taxes. Of all the money spent in connection with Cubs spring training activity only a portion is taxable and, of that total amount, just a small portion flows to cities. In the case of the new Cubs facility, most tax revenue would go to the state and county. Of the overall sales tax of 9.05% in Mesa, the city receives 1.75%. Also, keep in mind that money spent at away games in another jurisdiction will not benefit the City of Mesa. In the end, Mesa will get far less than $1 million per year in revenue from this enterprise while paying out many millions of dollars annually in bond debt service to pay off the stadium and practice fields.

New Mesa Spring Training Plan Involves Selling Assets

The latest City of Mesa funding idea for a new Chicago Cubs spring training complex relies primarily on the sale of land which the city acquired years ago in Pinal County. This idea basically puts Mesa in the same position as the City of Glendale regarding their spring training facility for the White Sox and Dodgers. In plain language, the city will sell bonds sufficient to build the new baseball development and hope the money shows up later. Of course, a concerned taxpayer might wonder, if the land over in Pinal County was not needed for the original intended purpose, why wasn’t it already on the market before now? And, if the land really is worth anywhere near $100 million, is the subsidy of out-of-state millionaires the best use of that money?

The other source of proposed funding for this project would come from an increase in the hotel tax from the current rate of 3% up to %5. City officials estimate this tax increase would generate an additional $1 million per year.

Spring Training Announcement Planned For Thursday

Officials at the City of Mesa have announced a press conference for 10:30 AM on June 3rd. The stated purpose of this meeting is to reveal a new funding plan for the Chicago Cubs spring training facility. Participants include the mayor, the city manager, Cactus League representatives and various business leaders within the community. Perhaps of significance is the mention of hotel executives to be present at this time.

Since this is the fourth or fifth financing plan to be publicly revealed, it is hard to tell whether it will be the last, but the clock is ticking toward the July 12 final agreement deadline stated in the memorandum of understanding signed back in January. Also, it is unclear whether the Cubs preferred development site at Red Mountain Ranch will finally be made official at this meeting.

More Confusion and Secrecy on Proposed Cubs Spring Training Project

City of Mesa mayor Scott Smith was quoted today in the Arizona Republic as saying the odds are very good that the city and the Chicago Cubs will have a deal in place for financing the proposed new spring training facility for the team within the time frame described by the Memorandum of Understanding signed back in January. While the mayor did not say how the development would be financed, he did say “Yes, there will be something for voters.” The mayor contradicted recent comments from Cubs officials by emphasizing there would not be an increase in property or sales taxes. So, it remains unclear just exactly what the “something” he referred to is.

At this juncture, it appears the city is continuing a purposeful campaign to conceal details of this project in an effort to blunt opposition.

Two-Team Stadiums Draw Most Spring Training Fans

The Cactus League team which drew the most fans this past spring training season was the San Francisco Giants playing in the City of Scottsdale. However, the stadiums which had the greatest attendance, ahead of Scottsdale and in order of rank, were Camelback Ranch in Glendale, the Peoria Sports Complex and Surprise Stadium. Hohokam Park in Mesa, where the Chicago Cubs play, came in fifth place. This set of circumstances came about because the top three facilities were each shared by two baseball teams. Obviously, it is the number of people attending games which is the most important factor in determining the economic impact and potential tax revenue generated by a spring training project. Next year there will be another two-team stadium in Maricopa County which will be shared by the Arizona Diamondbacks and the Colorado Rockies.

Unfortunately for City of Mesa taxpayers, the Chicago Cubs early on in negotiations rejected the two-team format for a proposed new spring training facility. In January of this year the Cubs president was quoted as saying they had been approached by other teams about the possibility of a shared project, but they rejected the concept. Too bad nobody asked the opinion of the people who will be asked to pay for this development.

Mesa City Council Meets to Discuss Cubs Stadium Deal

The Mesa City Council met today to discuss new proposals to fund the proposed Chicago Cubs spring training project. Unfortunately, as with most of the previous official gatherings on this subject, this meeting was not open to the public. Perhaps there will be some announcement within a few days as to what was discussed. Recently, far more information about this development has been revealed by the Cubs organization than by the city. Representatives of Mesa have dodged questions and misled taxpayers for several months on this matter.

Hopefully, one of the proposals discussed at the latest meeting deals with bringing in private funding for at least some portion of this undertaking. This option has the best chance of overcoming objections which have arisen since the spring training proposal was first announced in January.

Mesa Promises Facts on Cubs Stadium

After weeks of silence on the subject, the City of Mesa has announced that they will be revealing new facts concerning the proposed Chicago Cubs spring training facility to be built in east Mesa. Mayor Scott Smith was quoted on May 11th as saying there has been a lot going on behind the scenes and he expected to provide details during the week of May 17th. Perhaps this will include the exact location for the project at Red Mountain Ranch or maybe specifics on the planned new property tax to pay for this development. In any case, it would be a pleasant change to get any information from the city since almost all news recently has been leaked by Cubs representatives.

Mesa Plans to Double Property Tax to Pay for Cubs Spring Training Facility

The City of Mesa has decided the best way to fund a new Chicago Cubs spring training project is to implement a new property tax. This is the second time in two years that the city has proposed using a secondary property tax to raise bonding money. The last occasion was in 2008 when $170 million in bonds were approved by voters to pay for roadways and essential safety services. Back then officials estimated that the impact of the tax would be about $50 annually on a home valued at $250,000. However, as frequently happens with government estimates, the actual amount has ended up being 50% higher. There is no reason to believe the current situation would be any different. Today, officials estimate the impact of the Cubs tax as being about $60 on a $250,000 home. No doubt the actual amount will again be somewhat more.

Still No Information on Source of Funds for Cubs Spring Training Project

While the State of Arizona Legislature has concluded its 2010 session without taking any action on raising funds for a proposed new Chicago Cubs spring training facility, the City of Mesa insists the project is still alive and that it would be “insanity” not continue to pursue the development as outlined in the Memorandum of Understanding signed by the baseball team and the city. Interestingly, Mesa has never said how it intends to come up with any portion of the money necessary for this venture. Since the months are passing by, it would seem prudent to advise the community about whatever plans may be under consideration. Perhaps Plan B has always been to proceed without the assistance of the state or any private source and to place the entire burden of funding upon Mesa taxpayers.

Economic Impact of Cubs Spring Training Dips in 2010

Due to a drop in attendance, the statewide economic impact of Chicago Cubs spring training declined nearly 25% in 2010. While the just completed season totaled a bit more than 152,000 attendees at Cubs home games, the team drew over 203,000 fans in 2009. This translated to an economic impact of $37.2 million in 2010 versus $46.2 million in the previous year. Expressed as a percentage, the Cubs represented about 10% of all economic activity created by Cactus League spring training in Arizona. Spending this year which was related to the Cubs spring training generated about $1.3 million in tax revenue for state and local governments.

Mesa Standing Alone on Cubs Training Facility

With any sort of state funding apparently dead for this legislative session, it appears the City of Mesa is now the only party still in the game regarding a proposed new spring training establishment for the Chicago Cubs. From the outset, only the city and the baseball team were signers to any sort of written agreement, but there was an understanding that the State of Arizona would kick in at least half of the money necessary to get the development constructed. The current circumstance pretty much leaves Mesa where the City of Glendale stands on their recently built facility which accommodates the Chicago White Sox and the Los Angeles Dodgers. Glendale borrowed all the money necessary to build the complex while hoping to be reimbursed tens of millions by the state. So far, it has been two years and this hasn’t happened.

For the sake of Mesa taxpayers, one can only hope this will not be a repeat performance.

Parking Questions Loom on New Spring Training Project

The only written guideline pertaining to the proposed new Chicago Cubs spring training facility is the Memorandum of Understanding signed by the city and the baseball team. This is intended to be the framework for a final agreement to be entered into this summer. Among other things, this document specifies a stadium with a capacity of 13,500 to 15,000 fans and a parking lot for 2,500 to 3,500 vehicles. This would indicate one space for every four or five fans.

A study commissioned by the Cactus League in 2007 determined that the average party size attending Chicago Cubs games was 2.1 persons in size. Because virtually everyone arriving at the stadium will do so by private automobile, this ratio of persons per party would dictate a parking requirement equal to 6,400 to 7,100 vehicles or over twice the amount specified in the memorandum. This sort of a shortfall could spell disaster for the surrounding neighborhood as cars search far and wide for a place to park.

Florida Presses Cubs on Spring Training Relocation

While there hasn’t been much news locally regarding a proposed new Chicago Cubs spring training facility in Arizona, the folks in Florida have interpreted this lack of progress as an opportunity to once again pitch the relocation of the team’s spring training to the Naples area. This is perhaps understandable because, as the months are passing by, there is still no Arizona plan for funding, no specific site location and no particular design.

Basically, the practice fields and stadium development in Florida would be about the same in scope as that outlined in the Memorandum of Understanding between the Cubs and the City of Mesa. What is different is the way in which funds would be raised. The Florida plan calls for $50 million in private funds, $15 million in a state grant and a 1% increase in a tourist tax which is projected to generate $3 million per year. The tourist tax increase could support about $40 million in bonds making the whole package worth somewhere in the range $105 million. Although the boosters in Florida give the impression that all these ducks are in row, it is useful to remember that was also the signal from Arizona backers prior to the recent collapse of funding plans here. It would seem the next move is up to the Cubs baseball team management.

Site Selection for Proposed Cubs Stadium in Question

While the City of Mesa insists the far eastern portion of the metropolitan area is the best site for a proposed new spring training facility for the Chicago Cubs baseball team, a number of people experienced with existing stadium developments say a more central location within Mesa would produce a greater return for the city. The greatest impact from Cactus League activity is created by the large number of out-of-state fans who travel to the Phoenix area. Expenditures by these people include hotels, rental cars, restaurant meals, etc. Dedicated fans of baseball will attend the homes games of a specific team as well as those played elsewhere and for this reason they are not likely to stay in the immediate vicinity of one particular stadium unless it is convenient to other venues. At the same time, the hoped for auxiliary commercial real estate tax base is more likely to be developed in an area which is more centrally located simply because the pool of prospective consumers is larger. An extended travel time is not an attractant for fans or shoppers.

Chief Backer Recommends Delay for Spring Training Project

One of the primary supporters of a new Chicago Cubs spring training facility to be built in east Mesa has proposed deferring a specific funding plan until next year. State of Arizona House Majority Leader John McComish has recommended that the City of Mesa and the Cubs amend their Memorandum of Understanding to allow extra time to work out the details involved in this complex undertaking. This is probably a good idea on several counts. It gives both supporters and opponents more time to organize and possibly work out a compromise. From a public standpoint, hopefully many of the missing links will be filled in over time. Some very basic elements, such as the location of the facility and how Mesa intends to raise its portion of the funding, need to be addressed openly. Likewise, extra time will allow the opportunity for private funding proposals to be firmed up and considered by all parties.

Cactus League Attendance Dips in 2010

In comparison to 2009, spring training in Arizona drew slightly fewer fans this year. The 7% decline was primarily due to fewer games being played in the current season than was the case last year. The number of spring training games varies considerably from year to year. Of all the Cactus League teams, the San Francisco Giants attracted the greatest number of attendees while the Chicago Cubs drew the second highest amount. Cubs home games in Mesa accounted for a little over 10% of all Cactus League attendance.

City of Mesa Growing More Desperate on Stadium Deal

Facing a politician’s worst nightmare – educated taxpayers with money – the City of Mesa continues to lose ground in their efforts to bulldoze the masses on the issue of funding a proposed Chicago Cubs spring training complex with vast sums of taxpayer money. The groundswell against the publicly announced funding plans regarding this matter has caused officials to scramble for reinforcement in order to buoy up their ever-weakening position. Meanwhile, the obvious choice of soliciting private funding is being ignored even though this route would overcome most objections. Increasingly, those wishing to retain a measure of credibility are distancing themselves from supporting this house of cards.

An important note to those temporarily in charge at city hall; the opposition to the current plan isn't going away.

Still No Site for Cubs Spring Training Project

The official word from City of Mesa officials is that there has been no specific location chosen for the proposed new Chicago Cubs spring training stadium and practice facilities. However, the number of possible sites up for consideration varies from official to official; one says two, another says six and maybe a third says ten. This has led skeptics to believe the city is not exactly forthcoming on the issue and that indeed a location has been chosen but not revealed. Giving some credence to this position is the fact that the Chicago Sun-Times newspaper has published a photograph of Red Mountain with a caption describing the view as that from the new stadium. This could naturally lead many people to think the project will land at the doorstep of the Red Mountain Ranch planned community. Clearly, Mesa does not have their act together on this matter and the more time that passes, the less credibility city hall will have with residents.

A New Idea for Funding Cubs Project

A different concept has surfaced for funding the proposed Chicago Cubs spring training facility to be located in east Mesa. In a recent letter to the editor printed in the Arizona Republic, a reader proposed privatizing the development by issuing shares of stock. Individuals and businesses would have the opportunity of owning a portion of the entire project and would participate in any potential profits. Logical investors would be the tens of thousands of loyal Cubs fans, businesses that would directly or indirectly benefit from spring training activity and anyone else who simply thinks this is a viable enterprise. Obviously, the current debate about the extent of public funding involved would disappear. This idea merits further consideration.

Baseball Commissioner Joins Cubs Stadium Debate

The Commissioner of Major League Baseball has entered into the negotiations for a proposed new spring training facility to be located in Mesa. Bud Selig has stated that, in the future, he will be in charge of finding a way to finance the planned Chicago Cubs project. Apparently, according to Mr. Selig, the solution will not include any sort of mandatory surcharge on Cactus League tickets. This means, at least on the State of Arizona level, there is no specific method of raising money identified. The original bill introduced in the legislature included surcharges on rental cars and Cactus League tickets. Both of these ideas are now defunct. Mr. Selig stated he hoped to reveal a specific fund raising plan by the middle of April.

Cactus League Has Recurring Funding Shortages

While it’s the Chicago Cubs on the front burner at the moment regarding the need for new spring training facilities, the Arizona Cactus League seems to have a financing crisis every 10 years or so. In 1991 the Maricopa County Stadium District was formed with a Cactus League funding mechanism and in 2000 this agency was superseded by the Arizona Sports and Tourism Authority. In both cases, the concept was to provide an ongoing source of money for spring training capital improvements. Today, in 2010, these entities have outspent their revenue resources and the search is on for yet another source of money. Whatever may be cobbled together in the present instance, you can be assured it won’t be enough to stem additional begging for dollars campaigns in the future.

Spring Training Project Costs Could Soar in Future

While people are rightly concerned about the upfront cost of the proposed Chicago Cubs spring training facilities, future expenditures on this development could easily match the initial outlay. According to the Memorandum of Understanding signed by the Cubs and the City of Mesa, the city and the baseball team share equally for any required or agreed upon capital improvements to the facilities over the life of the agreement with two exceptions. In years 10 and 20 of the agreement an evaluation of other spring training locations will be made. If any five other locations have an amenity or feature lacking at the Mesa project, then the Cubs can demand those features be added to their spring training facilities with the city paying the entire cost of the improvements. Since it is obvious that spring training stadiums and practice fields have come a very long way in the past 20 years, there is no reason to think this will not be true in the future. Without any lid on the amount involved, this could be easily tens of millions more dollars down the road.

Why No Private Investment in Proposed New Cubs Stadium?

While there is no shortage of verbal support for a new Chicago Cubs spring training facility located in the City of Mesa, there appears to be a lack of commitment within the private sector on the monetary side of the issue. A competing proposal floated last year from a Florida group included $50 million in private investment. The lead investor in this arrangement was Esmark, Inc. To be sure, there would have been some public funds needed to complete the deal, but $50 million is a sizeable portion of the total that would have been needed. The strongest argument for using virtually all public funding in this case appears to be that it has always been done that way here in Arizona. On the other hand, we weren’t always going broke. With both the City of Mesa and the State of Arizona bleeding red ink by barrel full, maybe it’s time to rethink how to use what few resources remain available.

State Contribution to Mesa Spring Training Project in Doubt

Legislation in support of the proposed Chicago Cubs spring training facility in Mesa recently passed in the Arizona House of Representatives. However, it failed to contain any specific plan to raise revenue which could be used for debt service on bonds sold to finance the project. The previously included one dollar per car rental surcharge was dropped. Things now move on to the Senate where backers hope to assemble some consensus on a revenue source. Until then, it is impossible to estimate the amount which might flow to the city to offset initial construction of the facilities. The objections encountered thus far may well indicate that the City of Mesa may have to shoulder more of the financial burden than originally thought.

The $4 Million Giveaway

No matter how bad things get in your neck of the woods, there’s always someone worse off. In yet another sign of just how true this old saying is, the City of Mesa has decided to contribute over $4 million of the taxpayer’s money to a worthy charity – the Chicago Cubs. As part of the recently signed Memorandum of Understanding between the city and the baseball team, the politicians in charge eliminated the early termination penalty in the existing lease with the Cubs and they also changed the cancellation notice period from two years to one year. And, even though the city will own the stadium, another little bonus tossed into the deal gives the Cubs exclusive naming rights to the facility which could also be worth millions.

Of course, there are other considerations which go well beyond the money involved. As one economic development official stated, “Having millionaires pay their own way around here is not the sort of image we want to project to the rest of the world.”

Mesa Still Mum on Stadium Details

While anxious residents wait with bated breath, the City of Mesa has yet to reveal either a site or the source of funds to pay for the proposed new Chicago Cubs spring training facility. As to where the development might take place, perhaps the city believes nearby residents will be pleasantly surprised when the final announcement is made. With regard to finding the necessary dollars, assurances have been made that a variety of means are available to get the job done. The smart money, however, is betting that Mesa is wrong on both counts.

There is going to be considerable neighborhood opposition after the specific location is revealed. As for sufficient revenue for construction and operation of the facility, the people making these projections are the financial equivalent of “The Gang That Couldn’t Shoot Straight.”

The Spring Training Money Pit

For two years the accolades just kept on coming – “Award Winning”, “State-of –the-Art”, “Taj Mahal, “At the Forefront”, and on and on. All of these attributes were heaped on the Glendale-owned Camelback Ranch stadium complex which was recently constructed as the new home of Chicago White Sox and Los Angeles Dodgers spring training. The City of Mesa regularly refers to this facility as the pattern to be followed for the proposed Chicago Cubs project. Unfortunately, another description has lately been applied to the Westside development – “Financial Train Wreck”. It seems the City of Glendale borrowed big bucks ($200 million) to build the stadium with the anticipation of attracting a very substantial tax base of commercial improvements nearby. Alas, four years after the festive announcement of the project, nothing in the way of commercial real estate is on the horizon, home values in the area have cratered with market values down over 65% and Glendale does not have any cohesive plan to repay the borrowed funds.

On the brighter side, perhaps the residents of Mesa can learn from this experience and avoid being sucked into the same sort of financial black hole.

Mesa Guided By Mark Twain on Stadium Issue

Proving that we can all learn from the past, the City of Mesa has taken to heart one of Mark Twain’s noted comments: “Get the facts first, and then you can distort them as much as you please.”

The city has concluded that, if Chicago Cubs spring training leaves Mesa, every nickel and dime spent on any Cubs related activity in Arizona will follow them. This is simply not the case. The real sum of money going elsewhere would be far less the incessantly repeated $138 million in lost statewide economic activity touted by the city. It is true that a high proportion of attendees at Cubs games are from out-of-town and a number of these people come to Arizona primarily because of spring training. However, it is also true that a great many people would attend another Cactus League game or just spend their money on some other activity within Arizona.

Fuzzy Math Plagues State Bill on Stadium Funding

The chief sponsor of House Bill 2736 in the state legislature has been quoted as saying that this measure would raise about $59 million to help build the new Cubs spring training facility in Mesa plus another $81 million toward other Cactus League needs. While this turkey might fly with the math-challenged politicians in Arizona, to think the proposed $1 car rental fee and 8% Cactus League ticket surcharge will come up with anything close to the stated amounts is nothing but fantasy. The debt service alone on $59 million in bonds will be $4.2 million per year. Based on current activity levels, the bill would raise only around $3.9 million annually. Making matters worse, both of the named tourism related sources of revenue are falling, not rising. Of course, the likely strategy here is to tap the general fund for the difference.

Books Versus Baseballs

Despite a dramatic shortfall of over $55 million in general fund revenues over the past two years, the City of Mesa proposes to go further into debt by erecting a new Chicago Cubs spring training facility. Here’s the rub – from an economic point of view there is no justification for such an investment. Based on data from the city’s own economic analysis study, the Mesa sales tax revenue generated by the Cubs on an annual basis is much less than even the amount necessary to pay back the city’s portion of the debt necessary to build this project. Maybe the libraries can get by with even fewer books and less hours; maybe city offices can cut back to two days a week; or maybe its time to get real. The city says we need to look at the big picture. In terms of dollars and cents, this is it not a pretty picture.

Would You Pay $84 Million for the Next Wal-Mart?

By now, almost everyone has seen or heard the number $138 million as the amount of “economic activity” that would be lost each year in Arizona if the Chicago Cubs ceased spring training in the state. This comes from a study paid for by the City of Mesa which, along with help from the state, is proposing to develop a new spring training facility using $84 million in public funds. Economic activity is basically the money spent due to some particular enterprise. A far more significant number is the amount of revenue that would flow into public coffers because of this economic activity. According to the same Mesa study, the amount of state tax revenue generated annually by Cubs related spending is slightly less than $5 million. Put another way, Cubs spring training creates about the same tax revenue as a typical Wal-Mart store. While this is by no means an insignificant sum, it is worth noting that Wal-Mart uses their own money to build their own stores.

City Fast-Tracks Cubs Stadium

In order to expedite completion of the proposed Chicago Cubs spring training facility, the City of Mesa has completely reversed the usual approval process for large real estate developments. In the case of a typical proposed real estate project, developers must locate a suitable site, design improvements, summit to all manner of hearings dealing with master plans, zoning, impact on the surrounding neighborhood, traffic mitigation, et. al. and then receive final approval from the City Council. In the Cubs case, the City Council approved a development which had not yet been designed for a location which had not been selected. While the mandatory hearings will still be held and citizens will still have the opportunity to be heard, the process is meaningless because the final authority has already voted in favor of the development.

Proposed Mesa Spring Training Stadium

Our representatives learned just this week that the City of Mesa and the Chicago Cubs Baseball Team have narrowed down the number of sites being considered for the Chicago Cubs spring training facility.

One recent map overlay our representatives have seen places practice fields just north of Thomas Road and west of Recker Road. This basically wraps around Red Rock Park. Where the actual stadium goes is still a mystery. The City of Mesa says the final decision hasn't been made.

We would appreciate receiving your views on this matter and your thoughts on what impact this may have on your lifestyle should Red Mountain be chosen as the actual site.