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Volume 21 No. 26

Facilities

Photo: getty images

Arizona has become a case study for the push-pull that comes with major sports facility projects as teams search for public funding and workable sites for new or renovated venues.

In downtown Phoenix, the Arizona Diamondbacks resolved a funding fight with Maricopa County over repairs at Chase Field, but the deal lets the team start looking for a new ballpark immediately and even exit Arizona altogether if Major League Baseball deems the current ballpark unfit.

Next door, the Phoenix Suns are trying to hammer out a deal for a $450 million renovation of 26-year-old Talking Stick Resort Arena.

In suburban Glendale, the Coyotes have had five different owners since 2003 and now see a new arena in a different location as a crucial need for becoming a viable franchise.

The only major Phoenix-area team not looking for a new or completely revamped home is the Arizona Cardinals, who play at University of Phoenix Stadium in Glendale.

Like other markets throughout the United States, the projects in Arizona have faced stiff headwinds in the bid for public funding and from community and watchdog groups. Potential deals are also hindered by Arizona’s constitutional restrictions on subsidies and by it being the only state without tax increment financing.

“Arizona has one of the strongest anti-gift clauses in the country, making it more difficult for a municipality to publicly fund a stadium project,” said Jordan Rose, managing partner of Rose Law Group and a prominent land-use attorney in Scottsdale. “Having the voters pass a dedicated tax to fund a complex has become politically challenging.”

With so many projects in play in the Phoenix area, how they are resolved and where the teams land could reshape the market’s place in pro sports for decades to come.

• • • •

Maricopa County — which encompasses almost all of metro Phoenix — is the fastest-growing county in the U.S., gaining 73,650 new residents between March 2017 and March 2018, according to the U.S. Census Bureau. Metro Phoenix’s population now stands at 4.7 million, compared to 3.25 million in 2000.

Being home to all four major sports leagues and hosting big events such as the Super Bowl, Cactus League baseball and college football championships has been intertwined with Phoenix’s efforts to cast itself as a major city.

But as the desert market has grown, some views have changed over how much sports is still that linchpin.

Downtown Phoenix was a sleepy, and in some places sketchy, afterthought in the region’s growth before the Suns, under then owner Jerry Colangelo, and the city built what is now Talking Stick Resort Arena there in 1992. Colangelo and Maricopa County built Chase Field for the expansion Diamondbacks next door in 1998.

“At the time they were critically important for downtown. They’ve made a huge difference,” said Dave Krietor, CEO of the Downtown Phoenix Inc. economic development group.

Krietor said Talking Stick Resort Arena has brought more activity downtown by being the market’s top concert venue. “They’re booking well over 200 nights per year,” he said.

But Krietor also said downtown Phoenix isn’t as reliant on sports as it used to be.

When the Suns moved downtown, the metro Phoenix population was about 2 million, Krietor said. Now as the region closes in on 5 million people, downtown Phoenix has an 11,000-student Arizona State University campus, is the center of a regional light rail system, and has 180,000 workers as part of its daytime population.

“I think now we are on an even keel,” Krietor said. “I think they’re important for downtown. But downtown is also important for them.”

That sentiment also can be found in the deal reached in May between the Diamondbacks and Maricopa County to settle their fight over who should pay for $185 million in repairs to Chase Field. The deal calls for the team to cover repairs, but also lets the Diamondbacks start looking for a new ballpark site, including outside of Arizona.

Maricopa County Board of Supervisors Chairman Steve Chucri isn’t worried about the Chase Field site if and when the team pulls up the moving trucks. Chucri said the deal takes taxpayers “completely off the hook” for ballpark repairs.

He expects the Diamondbacks to play there at least another five years under the agreement. Chucri is open to a future rebuild of Chase Field but he’s not worried if the team opts to leave. The county still owns the 25 acres that includes the ballpark, and Chucri estimates the land itself is worth as much as $80 million.

Like Krietor, he points to the growth of downtown Phoenix and believes something new could replace the ballpark. “I think we will keep a very open mind about the future of Chase Field,” he said.

County Supervisor Clint Hickman, whose family owns the largest egg farm in the Southwest, was the only vote against the Chase Field deal. He doesn’t like the provision — which offers neither a timetable nor specifics — that allows the team to leave Arizona if MLB decides the ballpark is unfit.

“Ultimately, the county taxpayer expected the Diamondbacks to play at Chase Field for 30 years,” Hickman said, citing the original lease. “Now they can leave tomorrow — without penalty — if MLB deems it necessary. At some point, a contract should be a contract, especially when you’re talking about a commitment to the public.”

The Diamondbacks could redevelop the 48,500-seat stadium into a smaller downtown footprint. However, that could have design challenges such as what to do with the upper deck and how to create a more intimate setting with the structure’s retractable roof.

Diamondbacks Managing Partner Ken Kendrick said in a prepared statement that the team will be “diligent in determining the best long-term stadium option for the D-backs. Our front office will continue to focus on our team on the field, the fan experience and the key role we play in the Arizona community.”

Diamondbacks executives declined to comment further.

• • • •

Downtown Phoenix also could be reshaped based on the outcome of negotiations between the Suns and city of Phoenix on a $450 million modernization project for the arena, which is one of the oldest in the NBA and also home to the WNBA’s Phoenix Mercury. The team and city would split the cost of the renovation, but specifics are still being negotiated.

The Coyotes, who continue to sign one-year leases with the city of Glendale for Gila River Arena, have shown a desire to share a renovated or new arena with the Suns, given all the competition for public funding. However, Suns Managing Partner Robert Sarver has not revealed any interest in doing so. The Coyotes would rather be in downtown Phoenix or the east side of the region closer to Scottsdale’s wealth and where the team sees a larger concentration of hockey fans and youth players.

“For the Coyotes, achieving a long-term arena solution begins with  the priorities that currently occupy our organization’s full focus: positively impacting our community, growing the game of hockey in Arizona and continuing to improve our product on the ice,” said Coyotes COO Ahron Cohen.

The city of Glendale, meanwhile, remains open to a longer-term arrangement with the Coyotes. “We’ll keep working every day with the Coyotes,” said City Manager Kevin Phelps.

Both the Suns and the Coyotes have drawn attention from The Goldwater Institute. The watchdog group has sued the city of Phoenix over a non-disclosure agreement it has with the Suns in their arena negotiations, and the group also has opposed longer-term Coyotes deals in Glendale.

“They should be up for public scrutiny,” said Goldwater attorney Jonathan Riches, who along with attorney Alexander Kolodin hopes the case will set up more challenges nationwide to non-disclosure agreements used by sports teams and big companies such as Amazon and Apple.

“You can’t just sign away the public’s right to know,” Riches said.

Arizona has constitutional restrictions on government gifts to private businesses and is the only U.S. state without tax increment financing. That financing method allows tax revenue in a specific area, such as a stadium district, to be captured and put back into a project. It also allows for upfront financing of projects.

The Suns declined to comment on the lawsuit and arena. Adding to the intrigue is that Phoenix voters will pick a new mayor in November. Current Mayor Greg Stanton, who is stepping down to run for Congress, has backed a new or renovated arena that could house the Suns and Coyotes. Some leading candidates to be the next mayor have been more critical of the arena deal.

Mesa Mayor John Giles said “there will always be skeptics” when it comes to public financing and carving out special tax zones. He’s seen that firsthand, as Mesa voters approved $99 million in public financing in 2010 to build a 15,000-seat ballpark for the Chicago Cubs and keep the team from moving its spring training to Florida.

Giles contends that public financing of stadiums — especially in the case of the Cubs — has benefited Mesa and Arizona overall. “I’m convinced by the data there is a net gain at the end of the equation,” he said.

Giles points to a new office development next to the Cubs ballpark and the boost to travel and tourism. The Cubs drew more than 222,000 fans to Mesa for spring training this year, the most of any team in Arizona or Florida. “A lot of people know Mesa because of the Chicago Cubs,” he said.

Barrett Marson, CEO of Marson Media and a veteran political and business consultant, said future pushes for public money need to drive home the economic development and community benefit to voters. “And that these venues do more for the community than just host a hockey or basketball team,” he said.

Still, Goldwater’s Riches counters that sports venues should be privately financed. He points to the increased valuations of pro sports teams and recent sale prices of franchises.

“If you can raise that kind of private capital then, why wouldn’t you in other contexts?” Riches said.

• • • •

With all the dealmaking in play, could tribal lands in the midst of the metro area be the best solution?

The Salt River Pima-Maricopa Indian Community is already home to the Phoenix Rising USL soccer club and has been eyed by the Diamondbacks and Coyotes for potential moves.

The Native American reservation is adjacent to Scotts-dale and Tempe (home to ASU). It is already home to a spring training ballpark that the Diamondbacks share with the Colorado Rockies as well as a Topgolf location, tourist attractions and two casinos.

The tribe is increasingly pro-development, has prime land along the busy Loop 101 and 202 freeways, and has casino money. Being on tribal land not only can allow teams to leverage casino money in a stadium deal but also helps the teams avoid public financing fights.

It’s just getting the tribe to help pay for the project.

Jeff Roberts, vice president for Salt River Devco (an economic development group for the tribe) said his group is not having discussions with teams.

“That does not mean there may not be discussions with third parties that control land or the community government directly,” Roberts said.

Whether it’s the Indian community or sites in other areas of the Phoenix market, plenty of dealmaking remains between the pro teams and local governments.

The Phoenix market has been down this road before.

Prior to the NFL Cardinals and NHL Coyotes landing new buildings in suburban Glendale in the early 2000s, a deal was proposed for a new hockey arena in Scottsdale and parcels were compiled in downtown Phoenix for a new football stadium.

But while the Coyotes and Cardinals ended up in the western suburbs, the story still ended well for Scottsdale and downtown Phoenix. The arena and stadium sites have since become employment hubs driven by state universities.

David Krietor, CEO of the Downtown Phoenix Inc. economic development group, said not landing the football stadium downtown might have been a blessing in disguise. The land ended up being developed into a 30-acre biomedical campus that is home to research labs and programs for the University of Arizona, Arizona State University and medical groups. The Phoenix Biomedical Campus accounts for 9,400 jobs and $1.3 billion in annual economic activity.

Krietor said the development is also next to a campus ASU has developed downtown that has more than 11,000 students. “There’s housing now downtown, people working and going to school as opposed to 10 to 15 events for the football stadium,” he said.

The Scottsdale arena site, a former shopping mall, is now a high-tech, mixed-used development run by ASU. The SkySong Center is home to 2,000 employees for companies such as Groupon, Recruiting.com and Web.com, said Tom Evans, an executive at the development. Office buildings, apartments and restaurants have been built and more development is planned, said Evans, who also worked on Coyotes and Cardinals site selection before the teams landed in Glendale.

Photo: getty images

Arizona Diamondbacks

Current home: Chase Field
Location: Downtown Phoenix
Venue owner: Maricopa County
Year opened: 1998
Aspirations: The MLB team wants a smaller, more modern ballpark. The club could look at redeveloping Chase Field or building another ballpark downtown or on the Salt River Pima-Maricopa Indian Community. The Diamondbacks and Maricopa County have resolved a dispute over who should pay for $185 million in repairs to Chase Field. The deal makes the team responsible for repair costs but lets the club start looking for a new ballpark if MLB deems Chase Field unfit to play.
Roadblocks: The Diamondbacks are especially PR-conscious of the image hit they would take if they leave downtown. The team already has its spring training on Salt River land and would have to get the tribe to help finance a new stadium if it wanted one there.

 

Photo: mike sunnucks / staff

Phoenix Suns

Current home: Talking Stick Resort Arena
Location: Downtown Phoenix
Venue owner: City of Phoenix
Year opened: 1992
Aspirations: The Suns and the city of Phoenix are trying to work out a deal for a $450 million renovation of one of the oldest buildings in the NBA.
Roadblocks: The Goldwater Institute watchdog group has sued the city over a non-disclosure agreement the city has with the Suns and wants to see details of the proposed arena deal. Some members of the Phoenix City Council have supported the concept of building an entirely new arena that could be shared with the NHL’s Coyotes, but Suns managing partner Robert Sarver hasn’t shown interest in sharing a venue.

 

Photo: getty images

Arizona Coyotes

Current home: Gila River Arena
Location: Glendale
Owner: City of Glendale
Year opened: 2003
Aspirations: The Coyotes want to move to a new arena still in the Phoenix market but either in a shared downtown building with the Suns or closer to Scottsdale and the East Valley suburbs. There is more wealth, businesses and hockey fans on that side of town, the team contends. A deal with the Salt River tribe — which operates two casinos — is also an option.
Roadblocks: The team tried to forge an arena deal in Tempe with Arizona State University. That fell apart when a special taxing district plan melted at the conservative Arizona State Legislature. The Suns have not been interested in sharing a new venue with the Coyotes.

 

Photo: populous

Phoenix Rising FC

Current home: Phoenix Rising FC Soccer Complex
Location: Salt River Pima-Maricopa Indian Community
Venue owner: Phoenix Rising
Year opened: 2017
Aspirations: The USL team has Major League Soccer aspirations and has bolstered its ownership group to support that push. The Rising has plans for a 21,000-seat MLS-worthy stadium (above) designed by Populous and Phoenix architecture firm Gould Evans. The stadium would be privately financed.
Roadblocks: Rising COO Bobby Dulle said the team is still looking at potential sites and it could stay on the Salt River. A new stadium hinges on the team’s MLS bid.

— Compiled by Mike Sunnucks


Phoenix is the largest U.S. market without a Major League Soccer team. Phoenix Rising FC wants to help the market lose that designation.

The USL club now plays in a 6,200-seat stadium in the Salt River Pima-Maricopa Indian Community. It’s looking at sites for a new privately financed stadium with the goal of winning an MLS expansion slot.

Photo: populous

Architecture firms Populous and Gould Evans have designed a 21,000-seat venue and the team hopes to have a site selected as soon as a couple of months. Team COO Bobby Dulle said the Rising is committed to private financing to sidestep the political fights facing other pro franchises in the market.

As for site options, Dulle said the team could try to build the new stadium on Salt River land, which would require working out a deal with the tribe. He said the Rising could play at a modernized Sun Devil Stadium while a stadium is being built.

Maricopa County Board of Supervisors Chairman Steve Chucri mentioned downtown Phoenix as a potential site for a soccer stadium as a long-term replacement if the Diamondbacks decided to leave Chase Field.

Just last week MLS announced Cincinnati as an expansion franchise, starting in 2019. Earlier, the league awarded expansion spots to Nashville and Miami, with each expected to join the league in 2020. Phoenix is one of 11 cities in the running to become the league’s 27th and 28th teams, at a date yet to be determined.

Beyond the stadium plans, the Rising has beefed up its ownership to make its MLS bid more attractive. Chinese hotelier Alex Zheng, who owns part of soccer club OGC Nice in France, joined the ownership group.

That adds more prowess to a group that already includes a number of prominent local businessmen led by Kona Grill CEO Berke Bakay, advertising executive Tim Riester and commercial real estate executive Mark Detmer. Atlanta Braves pitcher Brandon McCarthy and Fall Out Boy bassist Pete Wentz also own parts of the team.

Sports architecture firm Populous has launched a design-build unit, Populous Design Build, that brings architectural design and construction under one roof.

 

Adam Stover, director of Populous Design Build, said the effort will focus on offseason sports construction projects that have shorter deadlines.

 

“You are hiring us to deliver the entire project, start to finish,” said Stover, who is also principal, lead interior designer and director of product development for Populous. “We can speed things up by having everyone under one point of contact, one roof. We can engage [subcontractors] earlier.”

 

Offseason projects often face tight schedules that result in higher overtime costs, which can bench certain design elements because of time or money constraints.

 

“It’s such a pain point for our clients,” said Gina Stingley, marketing director and principal with Kansas City-based Populous.

 

Currently, the new division draws from Populous’ overall operations, but Stingley envisions it potentially growing into a 10- to 12-person stand-alone business unit.

 

Populous could work with various construction firms on the design-build model depending on the project but is putting early focus on teaming with Boston-based Shawmut Construction.

 

“We’ve worked with them at Yankee Stadium and we worked with them at Petco Park. We have a long track record with them,” said Terry McIntyre, director of business development for Shawmut.

 

McIntyre said Populous approached Shawmut about jointly pitching under the design-build model. He said Shawmut is the preferred contractor for the new unit, but the relationship is not exclusive. Shawmut does not have an equity stake in the design-build venture.

 

McIntyre said the design and construction process can take sports clients six months even for fast-tracked, offseason projects. He said a design-build model can cut that in half.

 

Populous already has used the design-build model to construct the new Kids’ Corner at Oriole Park at Camden Yards in Baltimore, and a new lobby at the University of Oklahoma’s football facility. Those both opened last month. It also has design-build plans for the Esports Stadium Arlington planned at the Arlington (Texas) Convention Center near Dallas.

Besides the LED lighting, the Rose Bowl is exploring a new scoreboard and customized seating configurations.
Photo: Getty Images

The Rose Bowl plans to install new LED lighting as it also explores adding a new scoreboard and engineering alternative seating configurations to draw more events in the crowded Los Angeles sports and concert market.

 

“It’s about staying competitive,” said Rose Bowl COO George Cunningham. The 90,888-seat iconic stadium, which opened in 1922, is owned by the city of Pasadena.

 

Cunningham estimates the LED lights will cost no more than $2 million. Initial bids were due May 23. The lights, to be paid for by the city, are scheduled to be installed by August 2019. ME Engineers Inc. is leading the design.

 

Cunningham said a request for proposals also could go out soon for a second new scoreboard; Daktronics installed the first one in 2011. In addition, the stadium is looking to improve security checkpoints and entry areas to provide a smoother flow.

 

While the LED and scoreboard plans advance, the Rose Bowl is looking at configurations to make the venue a better alternative for hosting smaller events. “We want to be able to think outside the box,” Cunningham said. That could involve incorporating temporary seating or taking other steps to make the venue more customizable, especially for concerts.

 

“We want to allow ourselves flexibility to be able to adapt to who is playing,” Cunningham said. “For example, one artist might have a crowd that will prefer to stand and dance, and another is more into sitting in their seats, and another might have seating with a table to have [food and beverage] service.”

 

The Rose Bowl went through a decade-long $183 million renovation that ended in 2016. Those improvements were paid for mostly via bonds sold by the city and contributions from UCLA and the Tournament of Roses, which puts on the college football bowl game and famous parade.

 

Cunningham said the Rose Bowl has a $30 million improvement list and the city has been spending $1 million to $3 million annually on repairs and renovations.

 

The Rose Bowl is home to its namesake college football bowl game and UCLA football. It also plays host to major soccer matches and stadium concert tours. Taylor Swift just performed two shows there, and the venue also hosted Mexico’s last tune-up match before the World Cup.

 

Competition for such events has heated up as several facility projects are now underway or recently wrapped up in the L.A. market.

 

A $4 billion stadium for the NFL’s Rams and Chargers is under construction and will host the Super Bowl in 2022, the college football national championship in 2023, and the opening and closing ceremonies of the 2028 Summer Olympics. The $350 million Banc of California Stadium for Major League Soccer’s Los Angeles FC opened this year, and USC is in the midst of a $270 million renovation of Los Angeles Memorial Coliseum.