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.