SBJ/Sept. 20-26, 2010/Finance

Arizona mulls tax financing for sports projects

Camelback Ranch viewCamelback Ranch
A TIF plan could bolster Camelback Ranch spring training facility in Glendale, Ariz.
Some Phoenix-area cities and local business interests are trying to pump new life into the idea of special tax zones that earmark financing for sports complexes and other projects.
Those groups talking about reviving tax-increment financing still are trying to decide whether their proposal should help fund professional sports and retail venues, or be geared more toward high-wage jobs and industries needed to boost Arizona’s job market.
Tax-increment financing, also known as TIF, was shot down during the 2010 legislative session as a possible funding mechanism to help Westgate City Center and the Phoenix Coyotes in Glendale, Ariz., and to bankroll a new Cactus League stadium for the Chicago Cubs in Mesa, Ariz. But the idea will be proposed again when the legislature reconvenes in January, according to sources familiar with the discussions.
Arizona is the only state that lacks a statute allowing TIF mechanisms.
TIFs generally involve city governments bonding against or earmarking future tax revenue collected in a specific area for improvements or developments within that zone. The idea is that it will help provide financing for economic development projects that otherwise might not get done or could take years to complete.
The Arizona officials mapping a new TIF proposal are at a fork in the road. They could propose a tax zone plan focused on higher-wage jobs and industries such as manufacturing, aerospace and solar energy. That could include some kind of wage or project requirement to qualify for special tax financing.
Alternatively, a TIF plan could be used to help fund sports and entertainment complexes, including construction of new Cactus League ballparks; bolstering Westgate City Center, Arena and the Camelback Ranch spring training facility in Glendale; and boosting long-term plans by the Bidwill family, owners of the NFL Cardinals, to develop University of Phoenix Stadium parking lots into hotels, shops and office buildings.
Scott Butler, government relations director for the city of Mesa, said that the East Valley city is open to the TIF idea but doesn’t necessarily need such a plan for a new $84 million ballpark for the Cubs. Butler said TIFs could be used in addition to any Mesa financing for the Cubs.
Mesa voters will decide in November on financing plans for the Cubs’ planned new ballpark, including whether to raise the city’s hotel bed tax and use city construction money.
The city of Phoenix also might use a TIF or some other tax zone plan to help build new spring training stadiums for the Milwaukee Brewers and Oakland Athletics, Butler said. Both teams’ Cactus League leases expire soon, and they would like new or upgraded facilities.
The debate is also playing out in Glendale, which is looking for ways to improve the financial situations of the Coyotes and Westgate. The city is trying to work out a new arena lease with a prospective Coyotes buyer and wants to create a property tax zone to help the area. Glendale spokeswoman Julie Frisoni said the city has not been part of recent “formal meetings” about TIFs but that Glendale likes the idea of having more economic development mechanisms at its disposal.
Mike Sunnucks writes for the Phoenix Business Journal, an affiliated publication.
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