Tuesday, August 16, 2016

A BREAKING SHOT IN THE ASS: New Offer To Buy Diamondbacks' Stadium $178M Less Than Maricopa County Taxpayers Paid (READ)

(3:50pm: added additional details from the LOI. 4:10pm: added additional information about potential buyer. 4:20pm: changed article to reflect county taxpayers' cost to build of $238M. 5:10pm: added footnote regarding depreciation.)

Maricopa County has received a letter of intent from private investors offering to take Chase Field off of the taxpayers' hands. The $60M offer is 84% less than the stadium cost to build in the late 1990's, and $178M less than taxpayers paid.* (The team was responsible for the rest of the construction costs.)

The County Board of Supervisors will consider the Letter of Intent at its meeting tomorrow (1:30pm). The letter was made available 25 hours before, and is reproduced below.

The Diamondbacks began playing in what was then Bank One Ballpark in 1998. The team has been battling with the County over improvements that it says the taxpayers are responsible for.

The new offer comes from an LLC set up exclusively for the purpose of buying the stadium, by Park South Capital, LLC.  The principal is Sorina Givelichian, who describes herself as "a successful entrepreneur and venture capitalist." Givelichian was previously a Canadian hedge fund manager.

Under the LOI being considered tomorrow, the County will be responsible to obtain an appraisal of the stadium.  If the value comes in at $60M or below, the sale goes through; if the value is greater than $60M, the buyer will have the option of raising its price or walking away.  The LOI also prevents the County from negotiating with any other parties - presumably, also including the City of Phoenix - until November 1 (aka "exclusive period").

The County is also requiring (in the LOI) that the buyer fund the facility reserve account (for repairs) with $15.8M.

The Wisconsin law firm representing the potential buyer assured the County that there are no connections between the Diamondbacks' ownership and the buyer, and is required to disclose all potential investors within 7 days.

* The Maricopa County Stadium District's annual report in 2009 indicates that the stadium was being depreciated over a period of 20-50 years (wide range), and depreciation over the past several years have been in the $8-9M range. Depreciation in 2012 (last year published on website) for the stadium had totaled approximately $96M, with an original value of approximately $333M. Net value on the books on 6/30/12 was therefore approximately $237M.

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