It was hinted at earlier this month, and now the legislation has officially landed: A bipartisan group of Arizona state legislators has proposed funding renovations to the Diamondbacks‘ Chase Field by adding up all the sales and income taxes collected at the stadium and handing them back over to the team:
It calls for collecting the sales tax revenue from all purchases and transactions at the stadium and income tax paid by people who work there, including the team’s players.
Those taxpayer dollars would go toward stadium improvements, instead of funding state and local government services as they do now. At the state level, those tax revenues fund education, health care for low-income residents, prisons and other programs.
D-Backs CEO Derrick Hall stressed that this plan, which was devised by team execs before being introduced by Republican state rep Jeff Weninger, “avoids any new taxes,” which is only true if Arizona either doesn’t bother to fill in the resulting funding gaps for schools, etc., or finds some other way of producing money out of thin air. Cutting the D-Backs a check in the same amount as the check they would pay in state and local sales and income taxes has a kind of Casino Night logic to it, but to quote myself two weeks ago: No, no, no, no, no. That is not how taxes work at all.
As to how much money Weninger and his legislative pals — 12 state reps and 7 state senators, including house speaker pro tem Neal Carter and majority leader Michael Carbone, plus senate president pro tem Thomas Shope, majority leader Janae Shamp, minority caucus chair Lela Alston, and assistant minority leader Flavio Bravo — hope to generate with this sleight of hand, team execs project $15-20 million a year, which would be enough to pay off maybe $230-300 million in renovation costs. That’s a fair bit more than I estimated two weeks ago, when, after some initial math stumbles, I arrived at an estimate of just $2.7 million to $5.6 million a year in sales tax receipts; the final bill rolls in team income tax kickbacks as well, though, and it’s possible I underestimated total team sales, so maybe.
Three hundred million dollars is a sizable chunk of change, even if it pales in comparison to some other recent baseball renovation subsidies. But it’s needed in order to cover … what was it Diamondbacks owner Ken Kendrick needs again?
“I’m a businessman who understands basic economics,” [Weninger] said. “There’s hundreds of millions of dollars in maintenance and repairs and upgrades that need to be done. And it’s not their building. So to me, this was improving a public asset while also preserving all the massive amounts of sales tax and hotel stays in and around the stadium.”
Yeah, it’s not their building only because they got the county to pay for it, then got the county to hold on to the deed so the team wouldn’t have to pay property taxes. In all other meaningful terms — collecting all the revenues from it, including naming rights — it is 100% Kendrick’s building, but he would only be putting in half the cost of an estimated $600 million in upgrades, while reaping all the revenues.
The full state legislature still needs to hold hearings and vote on this, as presumably do the city of Phoenix and Maricopa County, since their taxes would be getting kicked back to the D-Backs as well. There’s no timetable for all that just yet, though the Arizona Republic stressed that “the clock is ticking” — the team’s lease expires in 2027, not that there’s anything stopping Kendrick from signing an extension if he has to, and not that he has any other real options to move to if he doesn’t. But, yes, clocks tick, that’s how they do, well observed, Republic.
Meanwhile, there’s still the question of what a lease extension would look like, how much if anything Kendrick would have to pay in rent for the mixed-use development he wants to build around the stadium, etc. The total subsidy could end up quite a bit more than $300 million — or less, if Arizona lawmakers play their cards right. There’s a first time for everything!
5,000 underprivileged students were almost dumped on the street Tuesday when the Isaac Elementary District missed payroll. Fortunately, teachers returned to the classroom without pay. The Maricopa County Treasurer refused to cut a check because the Isaac Elementary District was already $28 million in the hole. Finally a sale lease back with the high school district will dig Isaac out of the hole, for the rest of this school year. Many other districts in Arizona are also on the verge of collapse, and test scores statewide are near the bottom nationally, so what’s the solution? Siphon off hundreds of millions of sales and income taxes from education to pay for new video boards and upgrading luxury suites at Chase Field. The Oakland Coliseum is empty if Kendrick thinks Chase Field is so decrepit.
Tax-payers need to start saying “NO” as in Seattle with Climate Pledge Arena. The owners of the Kraken and the soon return of the Supersonics paid for CP Arena.
Do you think Seattle residents are happy they haven’t had an NBA team for 16 years?
I think they’ve managed ok.
Of course the city has thrived but its not because they let the Sonics leave. I am just saying that if you asked most people they would have rather made a deal in 2008/09 and kept the team.
Knowing people in Seattle, I would say that certainly a large portion of the population and maybe a majority would rather have the money they didn’t spend on the Sonics. Initiative 91 requiring any arena spending to have a positive return on investment passed by like a 3:1 margin, after all.
By 2008 it was all but assured they were gone. Once Howard Schultz sold it to Clay Bennett- everyone in the league knew they were headed to OKC, any subsequent attempted arena deal by Bennett was window dressing.
Also, what happened after the Sonics left? Seahawks have a true golden age. MLS soccer explodes in popularity. Huskie football enters the national title conversation.
Also, if you look at local tv ratings Seattle consistently has very good ratings for national broadcasts, so the people that liked basketball still watched basketball.
The NHL saw that winter pro sports were lacking, put together a smart arena funding plan, got an excellent ownership group on board.
PEOPLE WILL FIND OTHER THINGS TO DO!
Citizens for More Important Things to Watch.
Basketball fans were certainly mad the Sonics left. Howie-ever, “Seattle” never owned them and didn’t lose them. They were gone the second Schultz sold them.
But that aside, the city itself has seen no dip in revenues related to ‘entertainment’, it has simply been redistributed to other options.
I would never say there is “no” impact when a team leaves, because some people identify with that team and the team does bring some economic value to the host city. But the question is always ‘at what cost is it worthwhile to keep them’?
And for most sports teams – particularly in large metro areas where there tend to be multiple teams – the benefit of one particular team or another being in situ is, if not zero, close to it. The loss of income tax from players and executives could be a significant amount (though often a lot less than people think based on simple calculations), but the loss of the McJobs that arena/concession/security workers hold and other suppliers provide usually isn’t a major impact to the economy (to the low wage workers, it certainly is).
I think there are probably 60-100,000 people in Seattle who still miss the Sonics and rue the day etc. Of course, if every one of those 100,000 fans had felt it was worth $3,500 to them to have the Sonics stay, they could have formed an investment group and bought them. Or put up $2200 each and paid for the renovations the cheapskate owner wanted themselves.
https://www.seattlepi.com/news/article/sonics-sold-to-ownership-group-from-oklahoma-city-1209167.php
But no, no amount of ‘need’ moved those fans to cough up.
There seems to be quite a gulf in modern sports fandom between ‘wanting something desperately’ and actually being willing to pay for it.
I really don’t get why the people want a team back after what the NBA did to them. It’s like like going back to an abusive partner. Forget it. Forget the NBA, Seattle.
Arizona has a talk 2.5% tax rate. The Diamondbacks payroll is $185.1 million. That would generate $4.6 million in payroll taxes (yes I know that players only pay taxes on home games but the Diamondbacks are in the middle of the pack in terms of payroll so they would make it up on visiting teams). Also the state budget is over $17 billion, so $15 million is only .09% so its not like THIS is the reason that schools and social services are underfunded.
$15 million is still enough to help 5,000 disadvantaged students in Isaac or a similar district. Kendrick can pay for his own upgrades, and maybe a couple million in property taxes to Phoenix Union.
Not enough is made about how the 3 Sunniest Sun Belt MLB franchises have basically been disasters as the gate. It’s almost as if the people with disposable income in these metro areas don’t spend a lot of time there in the summer and/or have very little interest in attending baseball games in August.
But those thousands of tourists who flock to Phoenix in July and August, packing those downtown hotels because there’s baseball games at Chase Field. This has to mean millions, probably billions for Arizona’s budget. When will those tourists realize it’s 110 in the shade, and there’s no shade.
Sounds like boilerplate Jeremy Aguero memo!
“Not enough is made” about that? It’s anyone talks about when it comes to Sun Belt teams, especially the Florida teams.
The fans that do root for those teams are as passionate as they come in MLB. It’s just that they’re surrounded on all sides in their own cities by East Coast and Midwest transplants who bring their own sporting loyalties with them, and sneer at the idea of rooting for their new “home” teams even halfheartedly, let alone adopt them as second teams.
For the Rays- they make a big deal how the problem is that the stadium is old and in St Pete. For the Marlins it’s “the stadium is a dangerous neighborhood”.
The truth is the economy in these cities is so dependent on old people who live their part time.
Until Manfred starts a Tampa Rays related press conference with “we love the area but Florida has too many olds who have no interest in our baseball teams” then yes- not enough is made of this problem.
Chase Field is well located, next to Footprint Center and the convention center. Downtown parking garages are within walking distance and light rail runs in front of Chase Field. Why the Marlins stuck with the old Orange Bowl site is their problem. Miami Dade taxpayers are stuck with the bill for decades to come.
Equating Phoenix with Miami and Tampa “gate-wise” is way off mark.
https://www.espn.com/mlb/attendance
Given the size of their metropolitan area, I’m sure the owners in Phoenix would love more, but they’re usually in the top 20 vs the bottom three for the Rays and Marlins.
For a metro area of its size- the D-backs underperform what their attendance should be.
You’re citing 2024 attendance, a year when the D-Backs got a post-World Series appearance attendance boast and they still only finished 10th out of 15 NL teams.
An apt comparison for D-Backs attendance- the Colorado Rockies. The Rockies have been pretty awful their entire existence, their all time win percentage is .462. (D-backs is .489). Phoenix metro area has over 1 million more people then the Denver metro area,
Yet the Rockies rather consistently draw 5,000+ more people per game then D-Backs. Why would that be? While it’s certainly true the Denver ballpark has a fun bar/restaurant scene surrounding it- the Rockies stink and have kinda always stunk, BUT a large chunk of Denver’s metro population don’t disappear in the dog days of summer.
So let’s just eliminate every pro sports team from areas populated in large parts by transplants and snowbirds, and leave them with their little collegiate sports (they do love that in the South) and other creature comforts. I’m sure that’ll be better for every league’s bottom line.
What?
It’s teams that play the bulk of their schedule during the summer in areas where snowbirds live en masse.
That seems reasonable to me. The Hoboken Marlins, the Montreal Rays and the Indland Empire Diamondbacks would all be better positioned for a post RSN MLB then those teams are in their current locations
A third team in the NYC and LA areas would do better than half the league, not just the Florida teams, but MLB has decided it doesn’t want to infringe on the territory of the existing teams. Montreal would probably be a lateral move, depending on the exchange rate at the moment.
The MLB “territory” system is pretty silly. The reality is that by the end of this decade there’s going to be maybe 5 teams getting fat RSN checks, 25 teams not getting them.
Asses in seats is going to be the only metric that matters for every team that’s not the Dodgers. Teams should be where people are.
New York could be at 4 teams easily, SoCal needs another one. Some ballsy owner should just move to San Jose and tell the Giants to “Suck it”