Opinion: Phoenix has good reason to contribute mightily to arena renovations, especially when its options are few and far between.
The city of Phoenix and the Phoenix Suns have no one but themselves to blame for the stumbles on a proposed deal to renovate the arena the Suns play in.
The secrecy in negotiations. The lack of public input. The hurriedly scheduled city council vote. The blinders they put on to objections of public subsidies to private enterprise, especially to uberrich sports-team owners.
That said, the deal isn’t a bad one. Not for the city or for taxpayers.
Yes, having Phoenix foot $150 million of the $230 million in renovations, with the Suns paying the other $80 million and any cost overrun, may on its face seem unbalanced.
City has few options and all are costly
But much is now known about why the public has reason to not go into convulsions over the proposed deal, thanks to a series of public meetings last week that featured a detailed presentation of the math and access to city and Suns officials to answer questions. (Really, where was all this when goodwill and understanding could have been more readily won?)
- The Suns could can bow out of the existing lease in 2022 if the arena is considered “obsolete” — not a difficult conclusion given ongoing plumbing, electrical and other infrastructure needs for an aging building.
- If the Suns trigger the obsolescence clause, an independent arbitration panel would determine the costs needed to update the building, forcing the city to pay for it all or allow the team to walk.
- The city owns the building and, should the Suns bolt, it would have to renovate it regardless if it is to be used as a concert or entertainment venue, at a cost of $120 million to $180 million.
- Or, Phoenix could raze the structure and sell the land, which could take years to re-develop with no assurance of the level of tax revenue the Suns now generate.
Beyond that, the $150 million that Phoenix would pony up (it has to contribute another $25 million over the 12 and a half years for future renovations, with the Suns contributing another $12.5 million) comes from a fund consisting of taxes on hotel rooms and rental cars paid predominantly by out-of-town visitors.
Suns, arena are worth city’s investment
The city’s PR blitz drives home the point that the team and Talking Stick Resort Arena are worth the investment — $26.8 million annually to city, county and state coffers and tens of millions more in direct and indirect impact.
The presentation probably does little to change the minds of purists who disdain all subsidies as government handouts or corporate welfare. They represent a not small or irrelevant crowd, and have support from at least three city council members.
Phoenix resident Greta Rogers, in a public meeting Dec. 12, 2018, lit into council members over a proposal to spend $150M to help renovate the Suns’ arena.
Phoenix City Council
Not probably moved, either, are those Suns fans who resent Robert Sarver for ownership’s longstanding failure to invest enough or make smart moves to put a winning team on the court.
Admittedly, the lack of admiration — the Suns ownership was rated last among NBA teams in an ESPN survey a couple of years ago — doesn’t help. Nor does Sarver having to recently clear up scuttlebutt of threatening to move the team to another city.
Phoenix, however, doesn’t have the luxury of weighing the Phoenix Suns or its ownership as a new sports franchise coming into town asking for support.
The team is already here and paying rent as the main tenant in the city-owned arena. Phoenix has every reason to continue to make the relationship work.
Reach Kwok at [email protected].
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