When county officials first proposed building a stadium, they promised the southside facility would be an affordable attraction which would easily pay for itself through a steady stream of earmarked revenues. At the same time, the park was promoted as a catalyst for an economic renaissance along Ajo Way.
That rosy scenario looks increasingly like a wild pitch. The cost of the stadium went from $25 million to $35 million to $38 million. Strike one! Tax projections to pay for the park were too high and estimates for operating the stadium were too low, resulting in the current $5.2 million debt. Strike two! About the only new addition near the facility is the recently opened juvenile detention jail, not the promised 250-room hotel, golf course and chi-chi bistros. Strike three!
Despite that miserable record, Pima County Administrator Chuck Huckelberry remains optimistic the ballpark will eventually pay for itself. County officials also list several non-baseball benefits of the stadium, including an annual economic impact of more than $51 million and increased state and city sales tax revenues. But those niceties leave unresolved the issue of a growing multi-million-dollar stadium debt.
It wasn't supposed to be this way. When construction of a ballpark was first proposed, members of the Board of Supervisors repeatedly told taxpayers that it would pay its own way and not be a burden on the county general fund.
Once planning for the park and surrounding improvements was underway, however, at least Supervisor Sharon Bronson understood what was happening. "I'm just concerned that we're underestimating expenses and overestimating revenues," Bronson said in 1997. How right she was.
Tucson Electric Park has two two major expenses: debt service to pay for construction and the funds needed to operate and maintain the facility. The former was supposed to run $3.5 million annually through 2012 and the latter was estimated to be about $1.7 million each year.
Operating costs, however, have so far greatly exceeded projections. During the county's last fiscal year, the actual operating costs of TEP were almost $3 million -- $1.2 million over budget. Among the operating costs: a lifeguard is paid from baseball stadium revenues, a position which is perhaps related to possible rainouts. Mary Schuh of the Pima Association of Taxpayers, a volunteer watchdog group which monitors county budget shenanigans, got a hearty laugh when told about the lifeguard. "That's hilarious," she chortled, "and totally inappropriate."
At the same time, projected revenues to pay for the stadium have fallen short. Four major special taxes were to pay for the park: a 1 percent bed tax on hotel rooms, a $3.50-a-day car rental tax, the much-hated 50-cent-a-day RV tax, and revenues produced at TEP. Unfortunately, both the tax on car rentals and stadium receipts have not lived up to overly optimistic projections. The RV tax, meanwhile, brings in a few hundred thousand dollars, not the nearly $900,000 that was anticipated.
So after only two years in operation, the stadium is more than $5 million in the red. County officials, however, have pledged to not use general fund monies to bail out the facility. Is that still possible? Chuck Huckelberry says he can do it, through a combination of debt restructuring, a little head-knocking, and the hope that tax revenues will pick up.
According to Huckelberry, the county has embarked on a multi-year program to get TEP out of the red ink. The first step: refinancing the stadium debt, which lowered the annual payments to $2.5 million over the next four years. That short-term advantage, however, did add two years, and $3.5 million, to the total repayment schedule.
Huckelberry is also hoping that both car-rental and bed taxes increase significantly in the next few years. He's also counting on some inflation to help. But he realizes it will be tough to get out of the financial hole. "We're going to crawl out of it," he says. "We won't leap out." Huckelberry thinks the park can be debt-free within five years. "We have no where to go but up," he laughs.
While these financial prayers focus on revenues, Huckleberry has also taken a few steps to do something about the annual operating costs of the stadium. One of Bruce Postil's jobs under his $20,000-a-month consulting contract with the county is to ensure that neither the Diamondbacks nor White Sox gouge the stadium budget. "We got taken the first couple of years by the teams over some issues," like player security, Huckelberry says, but promises it won't happen again.
Despite the money problems, Huckelberry points to a list of community groups that have used TEP as "making the aggravation more worthwhile" and the financial experience less painful. Among those organizations are youth and adult baseball leagues, youth soccer and a short list of non-profit fundraisers.
Mary Schuh thinks the idea that the park can ever break even is unrealistic. "We've been telling the Board of Supervisors from the beginning that TEP was fiscally irresponsible," she says. "And if the county loses the RV tax at the state Legislature and some of its bed taxes because of the incorporation of Casas Adobes, there goes part of the revenue. Right now they're just playing a shell game with the financing."
Huckelberry, however, still believes that over the entire 15-year term of the spring training lease with the two teams, the economic future for the stadium is bright. But then he chuckles, "With the luck we've had with TEP, it will probably rain all through March this year."