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!
