Mesa vows to generate own funding to keep Cubs

Mesa is willing to fund a new Chicago Cubs stadium on its own — and not with regional tourism taxes — if that is what it takes to keep the team in Arizona.

The city announced a new funding plan Thursday morning, saying it will raise hotel taxes and perhaps sell vast parcels of real estate in Pinal County to finance a spring-training complex. The plan also requires Mesa voters to approve key elements in a November election.

This new strategy revives Mesa’s effort to keep the Cubs from bolting to Florida, where wealthy investors have a far more certain funding plan to build a complex with their own money. Mesa wanted to remove the uncertainty over its financial options, City Manager Chris Brady said.

“We want to take away the question of ‘Can we deliver?’” Brady said. “We can deliver.”

Mesa has pledged up to $84 million for a complex to replace Fitch Park and Hohokam Stadium, at a cost of about $6 million a year for 30 years to cover principal and interest expenses. The Cubs would be required to donate land for the stadium, valued at about $5 million, and cover any costs beyond the $84 million. The team and private developers would fund a surrounding development, dubbed Wrigleyville West.

Mayor Scott Smith described the land sale as a backstop the city would use only as a last resort. But because an agreement with the Cubs requires a financial plan by July 12, Mesa is offering a solution that will work if a more desirable approach falls through.

“What we’re saying is Mesa will go it alone if we have to,” Smith said.

The city’s agreement technically requires the Arizona legislature to have approved a funding plan by July. Mesa officials said they don’t think the alternate plan will cause concern because the go-it-alone option accomplishes the same goal of legislative action. Smith said he spoke with Cubs owner Tom Ricketts Thursday morning and that the team was pleased with the plan.

“At the end of the day, it’s all about financial certainty,” Smith said. “That’s what the Cubs care about. That’s been the issue: How can you provide certainty that we can move ahead with this project and know that it will be financed? That’s been accomplished.”

Mesa hopes that next year it can revive efforts to raise additional regional tourism taxes to fund its complex and others across the Valley. If that doesn’t work out, the city would pay for its complex by selling parcels of 11,000 acres in Pinal County.

The city spent $30 million in 1984 to obtain the land for its water rights, but the city never tapped into the reserves. It no longer plans to use underground water there because of legal and political concerns with transferring water from another county. Additional logistical and financial issues convinced the city it was impractical to ever harness the water, Smith said.

The city would sell parcels as needed to pay debt over the next two decades, Smith said. Mesa would only sell when real estate prices recover from the downturn, he said.

“We’re not going to sell it in a fire sale,” Smith said.

City officials said the land is worth at least $100 million.

The land south of Coolidge is mostly cotton farms, with some other crops and portions of raw desert.

Another funding source is boosting bed taxes at hotels, from 3 percent to 5 percent. This would generate about $1 million a year for the training complex and about $500,000 a year for promoting tourism.

Hotel owners and the Mesa Convention and Visitors Bureau offered the tax hike to keep the Cubs because the team is a major tourism attraction and boosts the economy, said Robert Brinton, president of the bureau and of the Cactus League.

Voters would have to approve the tax in November. Tempe and Scottsdale voters approved identical hikes in March, meaning Mesa hotels would have the same tax rate.

Also in November, voters would need to approve a city charter requirement for spending more than $1.5 million on a sports or entertainment facility. The city does not need voter approval to sell the Pinal County land.

The city wants to finance a portion of the complex with county-wide tourism taxes that have funded other spring training facilities in the west Valley, arguing Mesa taxpayers deserve to get some of their money back. But the economic downturn reduced the amount of money available for future projects.

The Legislature was expected to approve a regional or statewide fund for the Cubs facility and other spring training complexes by the July deadline. But lawmakers failed to do this when they adjourned for the year in April. They considered various plans that fell apart after other Major League Baseball teams objected to a proposed surcharge on Cactus League ticket sales.

Mesa will continue to promote a regional funding source that will finance stadiums across the Valley — including the new Cubs facility, Smith said. The city will work on that next year and anticipates some support from other communities to prevent other teams from moving to Florida, Smith said.

“We still have issues,” Smith said. “This does not make those problems go away.”

Mesa crafted the plan without increasing sales or property taxes, as officials said they were sensitive to asking residents for more money in the down economy.

The public often dislikes spending money for rich sports teams and could turn against the city’s plan, Smith said. But he argued the $6 million annual cost of a new complex is easily justified by the $138 million a year the team generates for Arizona’s economy.

“That’s a pretty good return on the investment,” he said.

Mesa and the Cubs slowed some of their efforts on the new complex after the uncertainty that resulted from the Legislature adjourning without taking action, Smith said. He expects the team and city will resume efforts to select a 100-acre site and work on the development’s design.

Construction is expected to begin in 2012 and the fields should be ready for the 2013 spring training season.