The Milwaukee Brewers are seeking a new $90 million spring-training facility in Gilbert, Arizona, and are generously offering to pay a whole $20 million of the cost:
According to emails among Gilbert staffers, [developer David] Sellers and financial consultants from April to June, the Brewers are willing to put $20 million toward the construction of the new facility.
The town would be on the hook for the other $70 million, which could be funded through bonds, development fees or a special taxing district…
LGE Design Build also proposed a 13-acre village next to the facility that would include 220 hotel rooms, 85,000 square feet of office space and 50,000 square feet of retail. It would cost an estimated $70 million to build, although it’s unclear who would front that cost.
We’ve been over the dismal economics of spring-training facilities before, so how do Gilbert officials justify this rather whopping expense? First by dodgy math — Sellers said annual tax receipts from baseball would only be $880,000, but there would also be added money spent at local restaurants and hotels (people are really going to stay at hotels in Gilbert rather than drive there from a more happening place?), writing that “the Brewers coming into Gilbert is Gilbert tapping into a $850 million … Valley economic impact. Just 10 percent of that would be $85 million being spent in Gilbert that isn’t happening right now.” If the Brewers played, say, 15 home spring-training games at a 7,500-seat ballpark, that would only require each and every fan to spend $755 per game to make those numbers work out.
And second, by ignoring the city’s own economic consultants, who, going against the grain in an industry where you generally tell your client whatever they want to hear, noted that the short spring-training season would limit any economic benefits. The accompanying hotel/office/retail village might bring in some money, Applied Economics concluded in an analysis obtained by the Arizona Republic, but it still likely wouldn’t be enough to make up for spending $70 million on a stadium: “the cost of investing in the stadium versus the value of the mixed-use development may not be justifiable.”
Only one thing left to do: Find some different economists who’ll provide a different answer!
Kathy Tilque, president and CEO of the Gilbert Chamber of Commerce, said the Applied Economics study was fairly limited in its scope and did not take into account the indirect economic benefits of a potential stadium.
The chamber is working with a different economic consulting firm to provide a broader economic analysis. That report should be completed soon and will be turned over to town officials for review, Tilque said.
“It would be a great thing not only for the East Valley but for Gilbert. We just need to make sure the numbers work,” she said.
Surely she meant “check that the numbers work,” not “make sure that the numbers work, by cooking them,” right? Right? Sigh.
IMPORTANT UPDATE/CLARIFICATION: The mayor of Gilbert, Jenn Daniels, just emailed me to indicate that my original headline (“Consultant says $90m Brewers spring-training park would lose money, town seeks new consultant”) was incorrect in one important aspect: The Gilbert Chamber of Commerce went and sought a new consultant without consulting or notifying town officials. “We had no knowledge that the Brewers and their development partner paid the Chamber to conduct a second study,” writes Daniels. “I found out that information with the rest of the public last Friday with the Chamber’s press release.” Since the Brewers were unable to show significant direct revenues from the stadium project, she concludes, “this deal is behind us.”
My apologies to Mayor Daniels, the people of Gilbert, and anyone else who may have been unfairly depicted by my original report. Not the Gilbert Chamber of Commerce, though, because those guys are apparently weasels.