When the Chicago Cubs opened spring training play last month in Mesa, nearly 15,000 far-flung fans packed the city's 3-year-old stadium, celebrating the defending world champions after more than a century of shared futility. For Mesa, a city of 475,000 ...
When the Chicago Cubs opened spring training play last month in Mesa, Â nearly 15,000 far-flung fans packed the city's 3-year-old stadium, celebrating the defending world champions after more than a century of shared futility.For Mesa, a city of 475,000 which bankrolled the $100 million ballpark to keep the Cubs from bolting to Florida, ownership in the team's success is a source of civic pride, an economic opportunity and a major league debt.
Much larger cities than Mesa have balked in recent years at funding sports stadiums and indeed, in Chicago, the Cubs are privately funding the $800 million renovation of their team-owned mothership, Wrigley Field, and part of the surrounding neighborhood.In Mesa, voters agreed to pay for the Wrigley-themed showplace in the Arizona desert more than six years ago. Full hotels, busy restaurants and sellout crowds have become the norm in March since Sloan Park opened in 2014, and on the heels of the Cubs championship last fall, the city expects sales tax revenue, tourism and its own marketability to reach new heights.
But beyond a new upscale hotel, adjacent development has come slower than some had hoped, and while the stadium's tax burden falls on Mesa, the economic benefit flows across the border to neighboring Scottsdale, Tempe and other Phoenix-area towns.Whether the one-month exhibition season provides enough of a boost to justify building the stadium remains the $100 million question.Faced with potentially losing its most prominent tourist attraction to Florida and unable to secure state funding, Mesa stepped up to the plate, backing the deal through a municipal bond sale. The Cubs got a state-of-the-art spring training facility and increased stadium revenue, juiced by higher ticket prices. The city got the bill."The Cubs were in position to negotiate a very lucrative deal, and we're not begrudging that at all," said Mesa Mayor John Giles. "There still is a significant amount of economic activity that occurs outside of the ballpark, in the restaurants and hotels and everything. It's very significant for us."
Losing the team was never an option for Mesa, which shares a history with the Cubs that spans 65 years and four stadiums.The team moved its spring training from Catalina Island, Calif., to Mesa in 1952, joining the nascent Cactus League and setting up camp in the small desert town perhaps best known for its Buckhorn Mineral Baths, a roadside motel and spa.
Despite not winning a World Series since 1908, the lovable losers drew welcoming crowds each spring to the utilitarian Rendezvous Park, linking Chicago and Mesa in the quixotic quest for a championship.From 1967 to 1978, the Cubs held spring training at Scottsdale Stadium. In 1979, the Cubs moved into Hohokam Park in Mesa, which the team would call home for nearly two decades. That was demolished and gave way to a new $18 million, 12,500-seat Hohokam Park in 1997, which was funded by the city and hailed by then-team president Andy MacPhail as "the nicest spring training ballpark in existence."In 2009, the Ricketts family bought the Cubs and Wrigley Field from Tribune Co. (now Tribune Media) in an $845 million deal, launching a long-term plan to renovate the club and the century-old ballpark.In Mesa, the Cubs threatened to exercise a 15-year lease option and move spring training to Florida after the 2012 season. Two Naples businessmen proposed building a 15,000-seat stadium, expansive training facilities and an adjacent Wrigley Village commercial district, with beach access nearby."It was a very attractive deal," said Crane Kenney, president of business operations for the Cubs. "We were flattered to be that attractive to Naples."While Mesa could not match the beach access, the Cubs agreed to stay if they could get the rest, including a new stadium, adjacent training facilities and a "Wrigleyville" commercial complex.Mesa first looked to fund the project through state legislation that called for a surcharge on Cactus League tickets. The so-called Cubs tax met with opposition from other club owners â€” notably White Sox Chairman Jerry Reinsdorf â€” and died on the vine.
Under the gun, Mesa agreed to finance the $84 million stadium and $15 million in infrastructure improvements itself, a plan approved by voters in November 2010."The political appetite outside of Mesa for stepping up to build the stadium was not there," said Giles, a lawyer and former city councilman who was elected mayor in August 2014. "So the city of Mesa just took the whole thing on its shoulders."In 2013, Mesa sold $94 million in excise tax bonds to cover the cost of the Cubs stadium and an $18 million renovation of Hohokam for its new tenants, the Oakland Athletics. The bonds mature in 2027 and 2032, but the city can pay off the bonds earlier, in 2017 and 2022.Mesa is planning to pay off the debtholders by selling nearly 11,400 acres of distant Pinal County farmland it acquired during the 1980s for water rights it no longer needs. In December 2013, Pinal Land Holdings, a Scottsdale-based developer, agreed to buy the entire property for about $135 million, closing on 1,613 acres for $24 million. The deal included an annual option fee of about $4.9 million to buy the balance of the land in two phases â€” by June 30, 2017, and June 30, 2019 â€” with the remaining 9,734 acres priced at $89 million.The city expects the stadium bonds to be paid in full by 2022, according to Michael Kennington, Mesa's chief financial officer.Mesa's commitment to carry the full debt for Sloan Park comes at a time when some cities are turning away from publicly financed pro sports facilities. Most recently, San Diego voters in November rejected a referendum to allocate hundreds of millions in tax dollars toward a new stadium for the Chargers, prompting the football team to move to Los Angeles.
In Chicago, the Ricketts family is spending $800 million of its own money for the ongoing renovation of 103-year-old Wrigley Field and the surrounding neighborhood.Bob Leib, a Wisconsin-based financial consultant to professional sports teams and owners, said taxpayer fatigue and shifting economic priorities have made publicly funded stadiums a harder sell.
"A politician doesn't want to be known as the guy who put into place a funding mechanism that funneled public dollars to billionaire owners," Leib said.Bob Kammrath of the Mesa Taxpayer's Alliance, a now-defunct grass-roots group that led the failed opposition to the stadium funding referendum in 2010, still believes Mesa made a mistake by financing Sloan Park."The stadium benefits the whole state, not just the city of Mesa," Kammrath said. "It didn't make sense for the city of Mesa to fund it alone."A Chicago native and retired commercial real estate consultant, Kammrath, 72, has lived in Mesa for 16 years, and has been in the Phoenix area since 1969. While he grew up a Cubs fan, he has long since switched his allegiance to the Arizona Diamondbacks, who began play in 1998 and won a World Series within four years.Kammrath has attended one game at Sloan Park, "just to see the stadium." He doubts that increased attendance will justify the debt â€” even if it is paid off in full by selling the water farm."If the money (from the land sale) had gone to the general fund, it would have paid for something else," Kammrath said.Cubs Chairman Tom Ricketts said the team's spring training facility is "crush(ing) it" on attendance, and features "the most shade in the Cactus League," one of many fan-friendly amenities. He believes the benefits for Mesa have yet to be fully realized."We think there is more opportunity," Ricketts said earlier this month. "And it certainly brings people into the city, and hopefully that works out really well for them."
Founded in 1947, the Cactus League is the Arizona spring training home to 15 of the 30 major league baseball teams. Its counterpart, the Florida Grapefruit League, is the senior spring training circuit.According to a 2015 study by Tucson-based FMR Associates, spring training teams generated an economic impact of more than $544 million â€” including $297 million in direct spending â€” from out-of-state Cactus League fans attending games at 10 Phoenix area ballparks. The Cubs are responsible for a large share of that revenue.Last year, Cactus League attendance was nearly 1.9 million, with Sloan Park drawing a record 226,163 fans over 15 games. The Cubs' average spring training attendance of 15,078 was on par with what the major league Tampa Bay Rays drew during the regular season in 2016."They were the largest following in the Cactus League and I think they will continue to be, so we're very fortunate to have kept them â€“ especially coming off the World Series title," said Cactus League President Jeff Meyer. "There's a lot more excitement heading into the spring. We expect to see some huge numbers from them."Since Sloan Park was built, the Cubs have 19 of the top 20 attendance records for a Cactus League game, Meyer said.
The Cubs keep the entire gate at Sloan â€” the team's primary source of spring training revenue â€” with average season ticket prices up 14.7 percent over last year, according to the team.Opening day tickets â€” including season packages â€” sold for an average of $32.30, a 29 percent increase over 2016. Individual tickets ranged from $35 for a lawn seat to $68 for an infield box seat.In 2015, the Cubs struck a 10-year naming rights deal with Sloan Valve of Franklin Park, plumbing supplier to Wrigley Field and the Mesa ballpark which now bears its logo, providing another revenue stream for the team."It used to be that spring training was a loss leader," Kenney said. "We're probably more break-even to slightly profitable."Quantifying the economic impact of the Cubs on Mesa is more difficult, but indicators show it is substantial, if highly seasonal."It takes just a small amount of faith and creativity to see huge numbers associated with spring training," Giles said.The Cubs have a 30-year lease on Sloan Park that pays the city $180,713 this year, with a 3 percent annual increase, according to Kennington. The team also assumed maintenance for the stadium, saving the city about $800,000 per year.In addition, the city sees a huge spike in sales tax revenue during March, which is projected to approach $14 million this year â€” second only to December holiday sales.City Manager Chris Brady said Mesa uses the Cubs to pitch the city to businesses, investors and even bond rating companies."We have executives from Boeing, we have executives from our development community; that's how we get them to Mesa," Brady said. "They'll come to a Cubs game, and we get the opportunity to network with them. It's the busiest economic development opportunity we have."Mesa's 65 hotels, which include eight upscale properties, are obvious beneficiaries of the Cubs, with March demand rising since Sloan Park opened for spring training play in 2014, according to data from hotel research firm STR."The Cubs are our greatest tourist attraction," said Marc Garcia, president and CEO of Visit Mesa, the official tourism arm for the city.The $40 million Sheraton Mesa at Wrigleyville West, a 180-room hotel and conference center overlooking Sloan Park, opened in April 2015. Now entering its second spring training season, the hotel is running at 96 to 100 percent capacity, with rooms bringing between $350 and $400 per night, according to hotel executives."Like everybody else, we're trying to capture a premium rate â€” they're the world champs â€” so we're not discounting the rooms very much," said Lon Palmer, vice president of business development for Power Hotel Group, which built the hotel. "It's booking rapidly."While Palmer said the hotel is planning to build a 75-room addition after this year's spring training season wraps up, adjacent development as part of the Wrigleyville commercial district has yet to materialize."We're being very careful and very deliberate about what would work best here," said Brady. "It hasn't happened mostly because the city has kind of held back."
At the nearby Mesa Riverview mall, where a free trolley takes fans to and from every Cubs game, a planned "entertainment district" of nightclubs, restaurants and bars has all but fizzled.Jessie Rowe, 58, a retired Air Force major, opened up The Brass Tap, a craft beer bar in the mall, concurrently with Sloan Park in March 2014. While he sees a big spike in business during spring training, it drops off in the summer and the bar is barely breaking even. He's still doing better than his former neighbors, Cactus Moon Sports Grill and Toby Keith's I Love This Bar & Grill, both of which closed.
"With this being supposedly an entertainment district and the Cubs being over there, we thought this was a great location," said Rowe. "It has since gone backwards."Last year, The Brass Tap had sales of $104,237 in March, or about 13 percent of its annual revenue, Rowe said. Anticipating a revenue boost in the wake of the Cubs World Series win, he recently expanded the outdoor patio and added a hard liquor license.Maximizing revenue in the spring can be make or break, with business invariably drying up each summer."You would think in a place where it gets to be 115 degrees, people want to drink a cold beer," Rowe said. "It's just the opposite. People don't like to come out in the heat. Those months are typically pretty tough."At the home opener, fans bedecked in Cubbie blue ate $10 Portillo's beef sandwiches, bought fistfuls of merchandise at the team store and basked in the glow of the world champions under the desert sun. Some even watched the Cubs defeat Mesa's other spring training team â€” the Oakland Athletics â€” 4 to 3 in a split-squad game dominated by nameless jerseys and future prospects.Chuck Mooney, 65, and his wife Cindy, 63, a retired couple from Lafayette, Ind., made the trek to Arizona for their first spring training, spending eight days with a niece in Scottsdale. Other than a visit to Sloan Park for the city's World Series celebration, they spent almost no time â€” or money â€” in Mesa during their first five days, visiting everywhere from Las Vegas and Hoover Dam to the Grand Canyon.They planned to take in two games at Sloan: against the Cleveland Indians and the White Sox."Cleveland will be my World Series, because I can't afford to go to the World Series," he said.Steve Scherer and his wife, Jean, both 66, of Stevens Point, Wis., were also among the masses in Mesa for their fifth consecutive Cubs spring training. Recently retired, they rented a condo within walking distance of Sloan Park for an extended month and a half visit.While impressed with the new Cubs stadium, it wasn't integral for the longtime die-hard fans."We love the new facility," he said. "The old one was fine too. We come to see the Cubs. To me it's the same experience."The couple is spending $3,000 on a condo, and has budgeted another $2,000 for food and entertainment, with visits to the Grand Canyon and other outdoor activities on the itinerary. Deterred by rising prices, they bought tickets to four Cubs games at Sloan, opting for general admission lawn seats. Watching the Cubs play on the road this spring has become a more attractive option for them."Actually, it's cheaper to go to another park to see the Cubs right now, which is good for the other parks," he said. "We've got tickets to go see them play at the Brewers. We're looking at getting tickets to see them play at the Athletics at Hohokam â€” they're a little more reasonable."Robert Reed email@example.comTwitter @RobertChannick
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