Phoenix mayor explains grooviness of using taxes for Suns-Coyotes arena: It’s cheaper than two arenas!

Phoenix mayor Greg Stanton made his pitch for a new publicly funded arena for the Suns and Coyotes yesterday, and he didn’t provide much more specifics than when he leaked it the day before: He will use tax money, but he won’t raise taxes to pay for it, and he’s for it because he thinks it will bring more spending to downtown Phoenix.

“I as mayor will do everything I can to pursue a course that makes a new facility home to the Suns, the (Phoenix) Mercury and the Coyotes,” Stanton said, noting the WNBA franchise as well. “Building two new sports arenas in our region simply doesn’t make fiscal or common sense.”

He’s right there, as far as it goes: One arena is definitely cheaper than two, albeit a lot more expensive than zero. So does building one new sports arena make fiscal or common sense for Phoenix?

Stanton’s funding plan, based on what little he’s revealed about it, would be a bit of a Rube Goldberg scheme, avoiding new taxes by siphoning every last bit of value out of existing ones. Currently, Phoenix levies hotel and car rental taxes and uses the proceeds to pay off a bunch of past construction projects, including the Suns’ existing arena (opened in 1992), a Sheraton hotel, and other buildings. (Note: This is separate from the county hotel and car rental taxes that pay off the Arizona Cardinals stadium and which were partly ruled unconstitutional in 2014.) The current arena will be paid off in 2022, however, and the hotel plus a downtown biotech building are in the process of being sold off, which would free up those tax revenues to be used for something else.

Great, free money, right? Not exactly. First off, the “something else” could be pretty much anything — in the most extreme example, the city could just cancel the hotel and car rental taxes once the existing arena is paid off, and either leave taxes low as an inducement to visitors or levy new ones to fund other needs. And on top of that, selling the Sheraton to get out from under its debt load isn’t without a cost: The buyer is effectively getting the building for free by paying off $300 million in remaining debt, and the city will lose any future profits it would be getting from the hotel. (The Sheraton currently loses money, but that’s partly because any revenue it brings in goes right back out to help pay off its construction debt.)

In short, then, Stanton is saying that the city’s decision in 1990 to build a new arena for the Suns is an open-ended commitment to keep on building new arenas for the Suns into eternity, while selling off any city assets necessary to make that possible. That’s a legitimate political position, I suppose, but you can see why he chose not to frame it that way. Or to put a price tag on it. Because people are cranky enough about it already.

Phoenix mayor to announce again just how groovy a new Suns-Coyotes arena would be

If there was any doubt about Phoenix Mayor Greg Stanton really wanting to build a new arena for the Suns and Coyotes after the last time he said his city needed one to keep its teams (and also, weirdly, to get the Harlem Globetrotters to appear), it should be dispelled once Stanton gives a speech today about doing just that:

According to sources who have reviewed the mayor’s planned remarks, Stanton will outline his vision for building a new taxpayer-funded arena during his fifth State of the City speech. The mayor is scheduled to speak before a crowd of hundreds of business and political leaders at the Sheraton Grand Phoenix hotel in downtown about noon.

Stanton will use his most visible stage of the year to make it clear that he prefers the arena be a joint-use facility shared by the National Basketball Association and National Hockey League teams, those sources said.

The Arizona Republic’s sources didn’t specify how Stanton would begin to pay for this, though they did indicate that the mayor would promise not to raise taxes to do it. Using existing taxes, such as the hotel and car rental tax that is currently paying off the Suns’ current arena, is another story — as, presumably, would be asking for state sales tax kickbacks to pay for arena construction.

As to whether this will be Coyotes CEO Anthony LeBlanc’s promised arena announcement to come by the end of the month, that’s anybody’s guess, though it sure sounds like he’s still trying to see who’ll provide the most lucrative bid:

At the same event, LeBlanc told The Republic that the deal would have to allow for equally shared revenues, in which each team would keep the revenue they generated and that both franchises would share non-event revenues, such as naming rights and advertising. The Suns currently have control over revenue at Talking Stick Arena.

“The Coyotes have had multiple conversations with the city of Phoenix and we continue to have detailed discussions,” LeBlanc said in an earlier statement. “However, as we’ve consistently stated, we also continue to have discussions with other Valley locations. It would be premature at this point to indicate a selection has been finalized.”

LeBlanc also trotted out the standard talking points from the new-arena playbook to practice them on the assembled pols:

The trick for the Coyotes, of course, is to come up with an arena plan that isn’t just lucrative, but is more lucrative than the deal in Glendale where they were getting a mostly free arena plus more than $6 million a year in operating subsidies to boot. It’s possible, just maybe, if taxpayers handle the construction costs and there are enough new revenues to split with the Suns, that it could work out to the Coyotes’ benefit. But you can see why they’re busily playing three different sites off against each other to get the best deal — when “we need a new arena and for somebody to cover all our operating losses because nobody comes to our games because we’re a hockey team in the freaking desert” is the agenda, you need all the leverage you can get.

So I wouldn’t expect a Coyotes announcement in the next two weeks, really, not when there’s still more hardball to be played. Talking about it incessantly to get people all excited about where an arena will go instead of why the Phoenix area should be building its third arena in 25 years, though? That’ll definitely happen.

Phoenix mayor says city needs “cutting-edge” arena for “concerts, Harlem Globetrotters”

Phoenix mayor Greg Stanton says replacing the Phoenix Suns‘ 25-year-old arena is a priority for his city, because, um, because:

“I know when people think about arenas, they always think about, ‘Well, that’s for the professional sports teams.’ Talking Stick Resort Arena in downtown Phoenix is used almost 200 nights per year.  The vast majority time it’s not for a sporting event — it’s for concerts, it’s for the Harlem Globetrotters when they come to town, it would be for the circus, it would be for ice skating and the skating events…

“You need a cutting-edge, competitive building to host all of sorts of events, including sporting events.”

(By the way, if you want to see just how badly another reporter can misquote a radio interview, compare my transcription above to the terrible one on KTAR News’ site.)

And a new arena would be more “competitive” because what now? Yes, the Suns arena isn’t sized right for hockey (“We won’t make that mistake twice for an arena in downtown Phoenix,” said Stanton), but what could possibly be $500 million in likely construction costs better about a new arena than a not-quite-new one? Especially if the old one is already in use 200 nights a year, so clearly concerts aren’t steering clear of it?

“I’m not just the mayor of the city of Phoenix, I’m a leader in this community. It’s important we don’t lose our major assets to Las Vegas or Canadian cities that would happily snap up the Coyotes or any of our major assets.”

OH MY GOD THE SUNS ARE MOVING TO HALIFAX YOU GUYS!

Stanton did promise “a very intense discussion” and that any arena plan would go before the voters, so clearly he knows this is going to be a long battle, even if he didn’t actually breathe the word “dollars” during his interview. But this is how it begins, not with a bang, but with a torrent of radio word salad.

Suns owner may demand new arena, because all the other kids have one

Every once in a while one of my readers, out of concern that some day I might get my life back, wonders whether this site will soon run out of business once every sports team owner has a new stadium. To which I say: Don’t worry, my friends, Phoenix Suns owner Robert Sarver has my back.

One scenario being talked about — at least in real estate and downtown Phoenix circles — is a new arena being built where the current South Building of the Phoenix Convention Center is on Jefferson and Third streets. That is the oldest convention center building and is a block away from the Suns’ current arena.

US Airways Center — which is being renamed Talking Stick Resort Arena — opened in 1992.

It will soon be the fifth oldest NBA arena after new homes are built for the Golden State Warriors, Milwaukee Bucks and Sacramento Kings.

Sarver actually dropped some hints about this last fall, but it sounds like things have now moved from the “whining about it” stage to the “talking to local business and political leaders about money” stage, so it’s likely things are going to heat up soon.

Note that there’s no talk here of the Suns’ current arena being obsolete or anything — just it’s older than all the other ones, can’t we have a new one too? That’s one of the great things about the stadium and arena game: No matter how many new buildings get built, there’s always another owner waiting to circle around and get back in line. If this latest is any indication, expect the next demands to come from the likes of the Toronto Blue Jays, Jacksonville Jaguars, Detroit Pistons, San Jose Sharks, and Anaheim Ducks. Check back in a year or so to see how this prognostication turned out.

Phoenix’s convention center subsidies may limit ability to provide Suns arena subsidies

Arizona Republic columnist Robert Robb has weighed in on Phoenix’s big investment for both a massive convention center expansion and a city-owned (that’s right, city-owned) hotel, following a Republic story that the 1,000-room Sheraton has lost $28 million since 2008. Noting that Phoenix city officials had assured that the city-owned hotel “would pay for its operations and servicing the debt to build it. No sweat,” Robb reports that the hotel’s ongoing losses, paid back from the city’s Sports Facilities Taxes, may now affect the city’s ability to refurbish or expand the Suns’ basketball arena.

The big Sheraton has been a fiscal disaster — last year’s occupancy rate came to an impressive 51.2% — because the convention center has genuinely flopped. Consultants from Ernst & Young and later HVS had forecast that the hotel would be humming along at 69% occupancy, based on the assumption that the bigger convention center would draw 375,000 convention delegates a year. Last year, the center actually saw 118,332. Oops.

Phoenix Suns owner says “we have to get a new arena built,” because old one is from 1992, already

And I guess that’s about it for this morning … wait, what?!?

“We’re definitely going to have to get a new arena built,” [Phoenix Suns owner Robert] Sarver said. “Our lease runs for another eight years maybe. Between us and the city, we’ve done a good job maintaining it despite its age but it’s starting to run out of gas. It’s like a house. It gets to be 30 years old and then you’ve got a lot of work to do. You can remodel or build a new house.”

You know, when people started asking me, about ten years ago, whether the new stadium game was going to soon run its course, because every team would already have a new building, and I said, “Nah, then the first teams that got new venues will just circle around and get back on line,” I thought I was joking, at least a little bit. But the way things are going — the Suns’ current arena opened in 1992, if you’re counting — it seems like every sports owner in the country is treating 30 years as the maximum shelf life before they can demand a new building, except for those that are using an even shorter timeline.

For reference, teams whose stadiums will turn 30 over the next eight years include the Miami Dolphins, Toronto Blue Jays, Chicago White Sox, Baltimore OriolesMilwaukee BucksDetroit PistonsMinnesota Timberwolves, and Utah Jazz, with the Anaheim Ducks and San Jose Sharks coming up right on their heels. The Dolphins are already renovating their stadium with public help, while the Bucks are angling for a whole new building; anyone care to guess which of the others on this list will be next to hop back on line?