Consultant says $90m Brewers spring-training park would lose money, new consultant sought [UPDATED]

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.


15 comments on “Consultant says $90m Brewers spring-training park would lose money, new consultant sought [UPDATED]

  1. Per http://milwaukee.brewers.mlb.com/mil/spring_training/ballpark/

    Maryvale Baseball Park is the home for the Brewers Spring Training games. This award-winning Cactus League facility, nestled in the west side of Phoenix, is a state-of-the-art complex with ample parking and easy access.

    So if the current park is ‘state-of-the-art’, why is there any need for a new stadium?

  2. If anything, the Brewers should move in with the A’s in Mesa. Cubs are unlikely to share their new park, while the Giants and Angels don’t have enough room around their facilities for another team.

    Maryvale is a fun little place to watch a game though; it’s kind of underrated due to the surrounding neighborhood.

    • “Maryvale is a fun little place to watch a game though; it’s kind of underrated due to the surrounding neighborhood.”

      That’s the irony, right? If these helped develop the neighborhoods as they say it will, shouldn’t the neighborhood be developed for the visitors?

  3. Just to be clear about how far underwater this is predicted to be… the study has it costing $8-$10 million annually with only about $4 million coming in. Even with that additional $880K in tax receipts coming in they’re still best case scenario $3 million PER YEAR in the hole.

  4. Grease isn’t just an old John Travolta movie, it’s a way of life when you own a major league franchise. Imagine the joys of having politicians fall all over themselves to get you positioned under a free flowing spigot of public stadium cash, their constituencies be damned. I tell you, it warms my heart to see how extracting dough from every little hamlet across the land is becoming the norm for my fellow billionaires from all walks of life. We’ve mined the big cities for new palace after new palace, so why not go after the little fish as well?!

  5. Ummm, wow. As much as I don’t get stadium deals, I really really really don’t get the Spring Training ones.

  6. Gotta love the “indirect benefits” line. It is amazing given the math and past evidence that this stuff still goes on and will actually probably happen.

  7. A shout-out to you, Neil.

    Roberts: Brewers want Gilbert to spend HOW MUCH to build team a new stadium?

    http://www.azcentral.com/story/opinion/op-ed/laurieroberts/2017/08/08/brewers-want-gilbert-spend-how-much-build-team-new-stadium/549493001/

  8. Don’t these people know anybody that lives in Glendale, who will be paying tax dollars into perpetuity to pay for the folly that is the Coyotes arena and the “entertainment district” around University of Phoenix Stadium? The power of positive thinking is the power to see only what you want to and charge forward into the murk, full speed.

  9. Hello Neil,

    As the Mayor of Gilbert, I read your article and was disappointed with your assumption that the Town sought out a new consultant.

    The second study you reference was conducted by the Chamber of Commerce and we had no knowledge that the Brewers and their development partner paid the Chamber to conduct a second study. I found out that information with the rest of the public last Friday with the Chamber’s press release. Our last meeting with the Brewer’s development representatives was on June 13th in which we told them that unless they could show us $3.5M in DIRECT revenues from the development we would not be interested in continuing conversations. Since we heard nothing else, and they indicated that their deadline was June, this deal is behind us. We are a financially conservative council who takes our fiduciary responsibility to the community very seriously. To indicate that we did anything other than due diligence in understanding the deal that was presented to us by the Brewers is simply false. I hope that you take the opportunity to correct the assumptions in your article now that I have provided you with factual information.

    Best regards,
    Jenn

    • Thanks for the correction, and my sincere apologies for misreading the town’s role. I’ve updated both the post and the headline above. (And posted updates to social media as well.)

    • Hi Jenn,

      As a resident of Gilbert I appreciate your follow up and confirmation that this project would only be considered if it made financial sense for Gilbert.

      -Geoff Bennett

  10. Gilbert won’t fund Brewers ballpark, but idea isn’t dead

    http://www.azcentral.com/story/news/local/gilbert/2017/08/08/gilbert-wont-fund-brewers-ballpark-but-idea-isnt-dead/545861001/

  11. Allhands: Actually, a Gilbert stadium for the Brewers is DOA

    http://www.azcentral.com/story/opinion/op-ed/joannaallhands/2017/08/09/gilbert-stadium-milwaukee-brewers-doa/552287001/

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