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?