Phoenix Rising co-owner vows MLS stadium will get no subsidies, other than “normal” ones

Since writing my post noting that Phoenix Rising hasn’t provided funding plans for its proposed MLS stadium yet, I’ve had an email back-and-forth with team co-owner David Rappaport. And he’s provided a bit more detail on his ownership group’s “no public subsidies” pledge:

Phoenix Rising FC is partnering with the Salt River Pima-Maricopa Indian Community and the Solanna Group, which is a real estate company owned by members of the Salt River Pima-Maricopa Indian Community, to construct a new, soccer-specific MLS stadium. No tax breaks or funding from the state of Arizona or federal government will be provided that are not normally offered to real estate projects in Native American communities. Stadium construction costs will be repaid from revenues generated by ticket, merchandise, food and beverage and sponsorship sales.

That’s a lot more specific, and helps rule out such things as tax-increment financing or other public kickbacks, which is definitely reassuring.

The question then is what that “not normally offered to real estate projects in Native American communities” clause means. Salt River is the same site that was considered and rejected for an Arizona Coyotes arena last year, so we have at least a little background on what kind of tax advantages a venue on Native American land would receive. The Salt River reservation has the same sales tax rate as Scottsdale (7.95%, marginally lower than Phoenix), but it promises other unspecific tax benefits. One of these could be a property-tax exemption for land owned by the reservation (same as for land owned by other governmental entities); if Salt River continues to own the property (or even just “has control over” it, which is considered the same thing by Arizona law), this could save Phoenix Rising a few bucks.

There’s also this:

The income of a corporation owned by an Indian tribe or tribal member is not subject to Arizona’s corporate income tax if its income is derived from businesses located on the reservation. Income from a corporation not owned by a tribe or tribal member, regardless of whether it is located on a reservation, is subject to the state corporate income tax. Corporations owned by tribes or tribal members that derive their income from non-reservation sources are subject to the income tax in the same manner as all other corporations with income in Arizona.

Again, if the ownership is structured right between Phoenix Rising, Solanna, and the reservation, there could be some tax benefits here, though it’s tough to say how significant they’d be without knowing more details.

Anyway, this is all reassuring, though I’ll still be eagerly awaiting a fleshed-out stadium funding plan. A typical MLS team brings in maybe $30 million in annual revenue, out of which it has to pay player payrolls (generally less than $10 million), plus other expenses; adding on $10-15 million a year in debt payments (if we’re talking about a $200 million stadium) would take a hefty chunk out of their ledgers. It’d help if they can keep costs down, but given they’re talking about a “climate-controlled” venue … I’m interested to see how it all pencils out, let’s just put it that way.

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3 comments on “Phoenix Rising co-owner vows MLS stadium will get no subsidies, other than “normal” ones

  1. So basically this would be the best sports deal for the tax payers of Arizona. That includes the 40-60 baseball parks built in the past 50 years.

  2. The real story today is a rich old guy in Miami killing a deal to invest 300 million in private money in an Impoverished area.

  3. Hello Neil and Company! Having read David Cay Johnston’s excellent Free Lunch and seen Your Marvelous Research first hand; It’s nice to know that You and your Great Staff are on Top of this All The Time and helping us Average Americans KNOW what the latest Schemes for a Field by the newest 1percenter are about! You are one of my Heroes!-Chris in Dearborn,Michigan.

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