The bizarro plan to have private investors buy Chase Field, home of the Arizona Diamondbacks, from Maricopa County and maybe build a new one already wasn’t going well when the putative investors never showed up to any meetings, though they did have their lawyer send a letter to the local newspaper. And now it’s really not going well, as recounted by the Arizona Republic’s Rebekah Sanders:
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The Diamondbacks undermined investors by releasing to The Republic notes from a discussion that Stadium Real Estate Partners II had asked to remain confidential. According to notes by an attorney representing the team, attorneys representing the investors criticized the “structural integrity” of Chase Field and the anticipated high cost of repairs — as much as $180 million. Touring the ballpark “scared the s*** out of” the investors, according to the notes. “Putting money in this aging facility is a waste.”
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The investors hoped to use the Government Property Lease Excise Tax incentive program to avoid millions of dollars in property and excise taxes on a new stadium, according to the notes. No property taxes are currently paid at Chase Field since a government entity — the county — owns the land.
That’s a lot of tea leaves to read, but it sounds like: 1) the Diamondbacks owners are more interested in making a case for their stadium upgrade demands than for a sale plan that was the county’s idea in the first place, and 2) the private investors didn’t really know what they were getting themselves into, other than “hey, let’s get a stadium and get subsidies for it somehow,” which is working the D-Backs owners’ side of the street.
The problem remains much the same one as with Donald Trump’s infrastructure privatization scheme: If a project isn’t making any money, just shifting it from public to private hands isn’t going to suddenly make it more profitable, unless there are new subsidies involved. The only real hope for this stuff is that you find a private developer who’s able to come up with an innovative way of making money that the government hadn’t thought of (not likely, but possible) or who’s dumb enough to throw money at a gamble that’s likely not going to pan out (also not likely, but possible); the danger is that either you have to subsidize the project up front, or that the private entity goes belly-up and leaves its public partner holding a half-billion-dollar bag, which is all too possible. So it might actually be easier for all concerned if these private buyers bail on the plan, and just leave the D-Backs owners and the county to keep fighting it out over who’ll spend on what — if nothing else, that kind of subsidy battle is way easier to understand.
UPDATE: The plan is now totally dead. In lieu of flowers, send ideas for fixing Shelby Miller.
I doubt the whole structural integrity angle on this, The Dbacks just want to reconfigure the place to lower capacity as well as create party zones. So they call it maintenance. The place is in great shape and certainly worth much, much more than the 60 Million purchase price talked about in this proposed deal. This franchise has become a huge joke in the course of just one year. I hope Phoenix and Maricopa Co, don’t give in to them either.
When a tenant doesn’t cooperate in a sale , its grounds for eviction.
“…. putting money in this aging facility is a waste…”
Well, thing one: the money committed to that facility was largely wasted from day one, as it is in most privately controlled but publicly funded sports facilities.
Thing two: It hardly seems a coincidence that the team which started out wanting a new facility takes a prospective buyer (that they didn’t want…) around and shows them dripping taps and dirty windows in an effort to put them off buying the place.
It seemed unlikely that private ownership could have cured whatever ills the tenant feels exist (my guess would be the only true ill is that they want more public money in exchange for nothing at all), but in this specific case it made no sense for someone to buy the facility unless it was for redevelopment. Even then, the land under the stadium would have needed to appreciate dramatically in order for this to be a break even proposition, considering demolition costs etc.
Good to know that the half billion dollar public investment teams are demanding for baseball stadia these days has a less than two decade horizon for ROI, though. It was still a bad deal when stadia used to “last” 35-40 years, now that we know they won’t even make their 20th birthdays without needing replacement, I’d say that eliminates any rational consideration of subsidy for professional sports businesses…