Glendale's Pro Sports Bill May Hit $21 Million This Year
Glendale has taken steps to change the image of a city that has made some poor financial decisions.
Officials say they’re working hard to increase the public’s benefit for having professional sports. But past leaders have saddled the City Council and staff with the costs of being Arizona’s only place to host Major League Baseball, the National Football League and the National Hockey League.
The price tag for this fiscal year could reach about $21 million, which does not include the cost of debt payments on Glendale’s arena and spring training facility.
Three major sports venues are clustered near Glendale’s Westgate Entertainment District, which is the city’s second largest driver of sales tax revenue, said Kevin Phelps, city manager.
The growing number of restaurants and retail stores wouldn't exist if Glendale wasn't the state's sports entertainment capital, Phelps said. There’d be little or no bed tax from nearby hotels, and the city wouldn’t get exposure from events like Super Bowl XLIX or the upcoming NCAA Final Four.
“I don’t know to say if it’s an equal value,” Phelps said. “But I think it certainly presents a compelling case to be in that market.”
Ongoing Costs At Cactus League Facility
The Los Angeles Dodgers and the Chicago White Sox share Camelback Ranch. Glendale’s deal with the clubs requires the city to fund regular capital improvements, such as baseball bat racks and mesh covers for pitcher bullpens.
“Currently we’ve been funding it to the tune of a little over $800,000 a year,” Phelps said. “It’s been static for several years, and we have some looming issues that are on the horizon.”
Under terms of the deal, Glendale may have to replace the scoreboard to keep pace with the rest of the Cactus League. Phelps didn’t negotiate the agreement, and he’d probably like to revisit that part of it. But at the end of the day, he said Camelback Ranch is still a city-owned asset.
“Just because you buy too expensive of a car, in a weak moment, doesn’t mean you don’t go out and still take it to the shop and change the oil and replace the tires when they’re needed,” Phelps said.
An 'Ironic' Settlement With A Silver Lining
University of Phoenix Stadium is a short drive north from Camelback Ranch on the Loop 101 freeway.
“This very concept drives people nuts in our community,” Joyce Clark, Glendale city council member elect, told her future colleagues.
Clark still urged approval of the settlement. In part, because it was less than the notice of claim filed by the Arizona Cardinals and the Arizona Sports & Tourism Authority (AZSTA).
Half of the monetary damages go to AZSTA, which is supposed to eventually reimburse Glendale for part of Camelback Ranch. But that money is not a sure thing, as a judge found a key funding source for AZSTA unconstitutional. The case has been appealed, and an attorney involved estimates it will take a couple years before it’s resolved.
“It’s really ironic that we’re settling with a company that also owes us money,” said Gary Sherwood, former Glendale city council member, who was recalled in 2015. Sherwood addressed the current council before it voted.
There is a silver lining for people who, like Sherwood, question the settlement.
In addition to the new parking lots, Glendale will have 30 acres left over to develop. The space will play a key role in landing Glendale’s next big sporting event, and the settlement has helped bring the city and the Cardinals closer, Phelps said.
“We believe that there is a high chance that there is going to be a lot of money reinvested due to the settlement by AZSTA and the Cardinals, to again, position the stadium to be fresh. To have the kinds of amenities that will appeal to the NFL, the NCAA or other large mega events,” Phelps said.
Westgate And Pro Sports
Gila River Arena is a short walk from the football stadium. The home of the Arizona Coyotes sits within the Westgate Entertainment District, where sales tax revenue jumped 8 percent in the last fiscal year, Phelps said.
Glendale’s relationship with the arena's anchor tenant has been bumpy in recent years.
In 2015, the Glendale City Council successfully forced renegotiation of the team's contract to operate the facility. The result was a reduction in the amount paid to the Coyotes.
The city went a step further in July, when it agreed to pay AEG Facilities $5.6 million a year to take over management of the arena from the franchise. The new contract includes profit sharing.
City officials say they're confident AEG will increase the number of non-sporting events at the arena and bring more crowds to Westgate.
“The only reason we’re (at Westgate) is for lunch," said Gary Kozun, a Canadian snow bird. "The only other time we come down here is for the sports venues.”
Kozun had browsed a RV show at the stadium, and was enjoying a post-meal pipe near the fountains outside the venue the Coyotes have said they'll leave. Many dominoes must fall before the team relocates to the East Valley. But if they do, Kozun fears Westgate will suffer.
“I mean look at today,” Kozun said. “There’s no sports venue on. How many people are here?”
The answer was not many, which is one reason why Glendale wants the Coyotes to stay.