Wednesday, August 17, 2016

IN THE ON-DECK CIRCLE*: Phoenix Ready To Work With Potential Buyers Of Chase Field, Keep Diamondbacks In Downtown; Could Become (Nominal) Landlord

Phoenix is ready to listen to the new potential buyers of downtown's Chase Field, in its continuing effort to keep the Arizona Diamondbacks playing baseball downtown.

A local attorney representing the investment group that made the $60M offer contacted the city this week.  Mayor Greg Stanton says he is ready to meet with that attorney and "the principals of the investment group soon."

(READ the Letter of Intent approved today, and more, in yesterday's article: "BREAKING SHOT IN THE ASS: New Offer To Buy Diamondbacks' Stadium $193M Less Than Maricopa County Taxpayers Paid (READ)")

Earlier this year, the Diamondbacks had floated the idea of Phoenix taking control of the stadium from Maricopa County. Such a transfer likely would not have brought in any monies to the county; this new deal would.

The investors, led by Sorina Givelichan - a former Canadian hedge fund manager - have an exclusive negotiating period through September. Part of those negotiations will likely be whether they can get the county, the city, or some other governmenal entity to reach some agreement that would achieve property tax abatement.

One such device is a "Government Property Lease Excise Tax Agreement" (or, GPLET). That would permit the investors to convey the stadium and land to the City of Phoenix with the exclusive right to lease it back. It would eliminate the property tax (paid to the county) and replace it with a lower excise tax (and, rent). Additionally, because Chase Field is located in Phoenix's Central Business District, the excise tax would likely be waived (abated) for the first eight years.

Stanton did not put the GPLET on the table today, but appears to be open to the offer. Here is his full quote:
“Now that the county has taken action, I will meet with the principals of the investment group soon. This parcel is critical to the future of Phoenix and I want the Diamondbacks to play their home games in our downtown for as long as possible. But until I meet with the principals, it would be premature for me to talk about any specific role that Phoenix might play.”
Phoenix has made use of the GPLET incentive for downtown development projects, sometimes with controversy.  School districts have claimed that the agreements skew the tax base, which resulted in the state reducing funding.

So, although the Diamondbacks' idea of having the City of Phoenix directly take control of the stadium will apparently not come about, it is still very conceivable that Phoenix will still become the baseball team's landlord.

*To stretch the baseball analogy a bit too far: If the private investment group is currently in the batter's box (and - ironically - pitching), and the city of Phoenix is in the on-deck circle, the taxpayers - of Maricopa County, Phoenix school districts, etc. - may be in the hole. Where are the Diamondbacks? Not quite in the suites, watching, but maybe standing in the dugout sending signals to the various parties. So, who's on first?

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Phoenix Justice said...

So, after the tax payers of Maricopa County did all the heavy lifting, a "private" investment group wants to buy Chase Field for a pittance and then work out a deal where the tax payers of Phoenix do more heavy lifting? All hail capitalism!

Mitch M. said...

Yeah, PJ, it's the American way! But, why'd you put the word private in quotes?