I mentioned in a recent post how Arizona and Phoenix residents had been bamboozled into building arenas and stadia with the promise of providing an economic boost. Over $1 billion later, Phoenix is still as co-dependent on the real estate market as ever, while the local pro teams suffer ticket loss due to declining incomes and buying power. We've spent $1 billion to support an industry that does nothing to sustain our economy while our state is committing gross negligence in school funding. We don't spend money on the types of things that diversify an economy over time.
Thanks to a tip from the DG Hotline, we've been given access to super-secret documents on the City of Phoenix's original America West Arena deal.
OK, it's just an archived article from a late 1996 edition of the Arizona Republic, but if you've tried to find archived articles of the Republic before, you would think they're kept in an encrypted CIA database.
The first thing that jumps out at me is the article was written by Bill Muller, who I sorely miss. But I don't want to get sidetracked.
Back to the issue at hand. According to this story dated December 15, 1996 (final chase edition), the city's $35 million investment was agreed to return a surplus, including:
- $128 million in shared profits to the city over the 40-year term of the Phoenix Suns' lease at what was once known as AWA.
- $104 million -- 81 percent -- to be paid in the final 10 years of the lease; $87 million in the final four years.
Four years after opening the doors, the city had received $200,000, which should have been our first clue about the negligible benefit of building these things before we built two retractable-dome stadiums, a hockey arena, and a fleet of spring-training facilities.
If you're not seeing the problem here, you need to understand the arena was built in an era when sports structures weren't expected to last 30 years -- they would be out-dated as we started incorporating digitally-enhanced beer or wet-wired real-time stats (or whatever the Sports Fan of the Future would require to continue supporting over-paid athletes). That time period is now shrinking closer to 15 years.
So when Phoenix is due it's primary return on investment, it's more likely the Suns will either be in a new arena built by some new suburban superpower (Maricopa? Florence? Apache Junction?) or in another city (Yooooooooour ... RENO SUUUUUUUUUUNS!).
The story wouldn't be so satisfying to this cynic (it does give me justification to say, "I told you so") if the Republic hadn't actually caught the primary players, Jerry Colangelo in particular, being so earnestly quoted. When asked if the Suns would still be around in 2,022, the man with the deific initials said:
That's very subjective. Because I don't think anyone really knows what's going to happen 30 years from now .... You could build a strong case for saying, you know, because of this back load, this is something the city may never get.
JC later went on to bury the D-Backs so deep in debt his partners levied a coup and ran him out, leaving him to sell off the Suns so he could have something on which to retire and reflect on his, um, legacy.
What's more disconcerting is the Coyotes bailed as soon as they realized they had also been hoodwinked with their AWA lease agreement, not realizing just how many seats would be impacted by blocked sight lines. They're in Glendale now, and the Suns ownership group is headed by a banker who is smart enough to know one should never pay on a backloaded deal if one doesn't have to.
In five years or less we'll start hearing how unfit the arena is, how the floor boards are endangering players, and any day now a girder may fall and crush a dozen or more veeps from the BofA and Verizon in the front row. Cryptosporidia in the hot tub! Black mold in the showers! Dogs and cats, living- er ... you get the idea.
The point won't be the Suns will actually want to leave for a smaller market, they just won't want to pay on the $100 million they'll owe the city. The point will be they'll want a new lease that keeps the slender profits flowing to San Diego or wherever else the investors actually live and not into city coffers that first allowed the Suns to revitalize themselves.
Civic boosters will tell you this is "the cost of becoming a big city," because they only think in linear terms. The cost is not the $35 million originally spent, but one of perspective on the role of government and what actual civic investment really should be.
