By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
By New Times
The process could not really be called money laundering, because there's nothing illegal about it. It's more akin to money recycling.
An example: The Dial Corporation has ponied up $10 million for its ownership stake. But a Dial subsidiary will also obtain the stadium's exclusive concession rights, a benefit that should throw more than $17 million a year right back at Dial.
In return for its $5 million investment, KTAR will get broadcast rights to all Diamondbacks games; the associated advertising revenue will likely run well into the millions.
Another corporate owner, Pinnacle West, will benefit from huge electric bills that its subsidiary, Arizona Public Service Company, will charge about $2.4 million for the massive amounts of power necessary to cool the stadium.
Phoenix Newspapers cashes in on its $5 million share the quickest, collecting $2.2 million from the condemnation of an abandoned warehouse that is located where the ballpark's infield will be built. The newspapers can be expected to benefit from increased advertising revenue from the team, the team's media outlets and the bars, restaurants and other entertainment venues expected to develop near the stadium.
The corporate back scratching goes on and on. But the key to the financial feeding frenzy is the ballpark itself.
Gone are the days of multiuse stadiums, where one building fits all sports. Nowadays, professional sports teams demand, and get, state-of-the-art facilities designed to pamper fans--and to separate them from their money in as many different ways as possible. Hawking warm beer and cold hot dogs no longer cuts the institutional mustard.
"You have to make sure you have the revenue streams to make money," Arizona Diamondbacks president Rich Dozer says mildly.
The Diamondbacks expect a torrent of dollars to flow annually from Bank One Ballpark. Besides the $10 million from luxury suites and club seats, the team projects that, in the Diamondbacks' first year, stadium advertising will generate $4.2 million, concessions $7.3 million and merchandising $4.3 million.
If the stadium is as successful as everyone connected with the project expects, then Colangelo's newest business venture should be immensely popular and profitable.
As part of the ongoing negotiations between Colangelo and the stadium district over the ballpark's operations, Colangelo has secured the right to build a 20,000-square-foot microbrewery on the northwest corner of the main plaza leading into the stadium.
The business could be the first of several Colangelo opens near the ballpark on stadium district property.
Colangelo has the right to operate the microbrewery under a proposed Real Estate Management Agreement with the stadium district. As part of the negotiations, Colangelo gave up the right to control booking events into Bank One Ballpark. The stadium district insisted it have control over booking since Colangelo already controls event scheduling at America West Arena.
In addition to the microbrewery, Colangelo will have rights to control the commercial and retail space reserved on the ground floor of a 1,500-space parking garage to be built immediately south of the stadium for use by luxury-suite and premium-ticket holders.
But the first order of business will be operating a brew pub at a location where 80 percent or more of the projected 40,000 spectators per game will pass.
Dozer is quick to downplay the financial impact of operating a microbrewery at the front door to the most modern and expensive baseball stadium in the country.
"The net won't be much," he says before adding the microbrewery will probably drop "$300,000 to $400,000 to the bottom line."
Baseball fans who bypass the microbrewery have plenty of other options for food and drink once they enter the stadium. One of the most popular destinations will be a two-story, 17,000-square-foot TGI Friday's sports bar, to be located in left field.
Once again, Colangelo will get a piece of the action. Friday's will be open every day, game or not, for lunch and dinner. On game days, a ticket will be required to enter.
Colangelo's entry into the microbrewery business on public property might ruffle the feathers of some restaurant owners trying to make a go of it downtown. But it doesn't faze Bill Girard, the owner of the popular Coyote Springs Brewing Company and Cafe, which just opened its second microbrewery a few blocks from the stadium on Washington Street.
"From a competition standpoint, I think it is excellent," Girard says of Colangelo's microbrewery plans. "You want more facilities like that."
Girard compares the area near the stadium to what once existed adjacent to Coors Field in Denver. "That was a veritable war zone," he says.
Now, the area near Coors Field is jammed with microbreweries, nightclubs and restaurants. "What it has become is a location to go to," Girard says.
The same potential holds for the areas near the ballpark, particularly west on Jackson Street, predicts Girard, a former banker turned brewmaster.
And if the area develops as expected, no one will benefit more than Gerald J. Colangelo.
While they were maximizing revenue from the stadium, the Diamondbacks' investors also wanted to minimize their exposure to construction costs and future maintenance and renovations.
The cost of building the stadium, and the very real potential for expensive upgrades in the future, lies primarily on Maricopa County taxpayers. The county will divert most of its earnings from the ballpark, estimated at about $2.5 million a year--primarily from rent paid by the Diamondbacks--into a special fund to cover future upgrades. The team also makes a small contribution to the maintanence fund--about $250,000 a year.