LOS ANGELES - Supervisors in Maricopa County, Ariz., have formed a negotiating team to work out preliminary financing details with private investors for a proposed major league baseball stadium in downtown Phoenix.
The five-member county board is expected to vote next month on whether to enact a quarter-cent sales tax to help fund the proposed stadium, Eric Anderson, a Maricopa County policy analyst and head of the negotiating team, said yesterday.
The negotiating team is being funded with $250,000 provided by Jerry Colangelo, majority owner and president of the Phoenix Suns basketball team, Anderson said. Colangelo heads a group of investors trying to bring the first professional baseball franchise to Arizona by 1997.
The private funds are helping the county negotiating team, composed of county officials and outside consultants, with its due diligence, Anderson said. Colangelo did not have "any role in the selection of anybody on the negotiating team, and if this deal doesn't happen, he doesn't get paid back," Anderson said. "If it does, he gets reimbursement."
Anderson said the negotiating team consists of "a lot of different players" who are "meeting daily" to look at financial, legal, site acquisition, and environmental issues.
Colangelo has said that to bring professional baseball to the county would cost $300 million - $200 million for stadium construction and $100 million for the franchise fee. Any debt financing in connection with the project would likely have a relatively short maturity, said Larry Given, president of Peacock, Hislop, Staley & Given Inc., the Phoenix-based financial adviser for the Maricopa County Stadium District.
Legislation passed in 1990 by the Arizona Legislature authorized Maricopa County supervisors to create the stadium district and levy a quarter-cent sales tax, which would generate about $65 million annually, Anderson said. The supervisors serve as the district's board of directors.
A spokeswoman for state Sen. Manuel Pena Jr., D-Phoenix, said yesterday that when the Legislature reconvenes Jan. 10, the lawmaker will introduce a bill to require a public vote on the sales tax proposal.
On Wednesday, a member of the negotiating team told supervisors how other public agencies have negotiated lease terms with private parties for recently constructed stadiums.
"There is no standard lease agreement between the public sector and the teams various revenue sharing and cost responsibility formulas have been used," said David P. Welle, president of Welle Consulting Group in Minneapolis, in an information sheet distributed to the board members.
Professional baseball teams "will generally pay rent, operating expenses, and debt service in the range of $5 million to $10 million annually," the flyer says. "This, however, can vary significantly depending upon the set of assumptions used."
"All leases allow for the Major League Baseball team to retain most of the revenues generated from stadium operations."
Todd Bankofier, chief administrator for Maricopa County Supervisors chairman Jim Bruner, said Welle's report indicates that publicly funded baseball stadiums are "not cash cows."
Anderson agreed, saying, "If there was any notion we were going to be receiving $30 million to $40 million out of this thing [in excess revenues], it is probably not going to happen."
"Baseball is having economic problems," Anderson said, referring to decreases in television revenues and increases in player salaries. But "there's no question we want to structure a deal in which we're getting significant revenues back," he said.
Plans tentatively call for a state-of-the-art stadium with a retractable roof to allow baseball to be played indoors or outdoors on a natural grass field.