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.”