News Ticker

Glendale’s sports dream turning into a nightmare

By Lisa Halverstadt and Sonu Munshi for The Arizona Republic

Glendale leaders did more than pay big money for a hockey arena, a spring-training ballpark and facilities such as a top-notch media complex and convention center. They guaranteed payment of the sports and entertainment debt with sales-tax dollars, the lifeblood of city operations. Arena

That allowed Glendale to move quickly on deals with no need for a vote by residents. But it also means that Glendale could use as much as a quarter of its general fund to feed the city’s sports and entertainment district, a commitment that’s led to layoffs and service cuts.

The city also grabbed $50 million from water and sewer funds to keep the Phoenix Coyotes at the city-owned arena for the past two years.

The city this year expects to collect about $10 million from those sports venues and surrounding commercial development, such as Westgate City Center, to help pay the debt.

The annual debt payment is two to three times that, $23 million to $29 million this year and the city will pay millions more for someone to manage Arena.

The sports debt, coupled with a voter initiative on the November ballot to repeal a city sales-tax hike, has city administrators and experts planning painful budget cuts. Among those unveiled this week: shuttering libraries, laying off nearly a quarter of city staff and even eliminating a decades-old holiday festival that draws thousands from across the Valley.

Sales Tax Debt Commitment Takes from General Fund

Glendale first venture into professional sports began a decade ago with the Phoenix Coyotes. City leaders said the $180 million investment into the hockey and concert arena wouldn’t cost taxpayers anything. Financial projections in the 2001 deal showed the city would collect an average of $20 million annually in sales taxes, parking fees and other revenue to cover the debt and then some.

The revenue has never come close to that.

Glendale additional sports/entertainment debt:

2008: $200M for White Sox/Dodgers spring training complex. Back when council had approved the deal, they had lauded plans for Camelback Ranch Glendale, training home of the Los Angeles Dodgers and the Chicago White Sox.

2006: $75.9M to build a conference center, parking garage and media center attached to the city’s first four-star hotel, the Renaissance Glendale Hotel & Spa.

2005: $6.7M for infrastructure around Cabela’s, the massive outdoor retailer.

Moody’s Investor Service, a credit-rating company, downgraded the city’s bond-rating on a portion of its debt in January. But the city has retained A ratings on Moody’s scale, which runs from a high of AAA to a low of C.

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