Longform

BOB's a Bust

Page 4 of 8

Kearney points to new housing complexes, the construction of the Collier Center office and retail complex just north of BOB, and the recent groundbreaking for Phelps Dodge's new corporate headquarters as examples of businesses drafting in BOB's wake.

"BOB has made people feel that downtown has a future and is going to be a happening place for a long time," Kearney says.

Yet it's not happening enough for some. The city still has not secured the third major downtown hotel it so desires. Would-be hoteliers, such as a Marriott proposed for the Collier Center, demand significant city subsidies. In the case of the Marriott, the city had to offer to pony up more than $90 million in cash and loan guarantees, but that deal is tied up by litigation.

The Downtown Phoenix Partnership is promoting a site east of Seventh Street and south of the Southern Pacific Railroad tracks for the proposed Cardinals stadium. Kearney says downtown already has the necessary infrastructure to support construction of the Cardinals stadium and the facility could work in conjunction with the Phoenix Civic Center to host trade shows and conventions.

"We are clearly interested in maximizing the infrastructure that is here," he says.

Maximizing infrastructure isn't enough, say some downtown business owners.

Brian Weymouth, manager of Cooper'stown, says downtown needs to expand its focus beyond sports facilities.

"I don't believe the downtown is mature enough to survive just on BOB, because there is no entertainment district," he says.


Promoters of the Cardinals stadium are eager to minimize comparisons between BOB and the planned football stadium.

"I really don't want to be defending BOB," Ferris says. "I would rather draw a distinction here. The governor said very early on to the task force that we are not going to do anything close to BOB."

Where BOB collected $238 million from taxpayers, Ferris says, Arizona taxpayers would contribute only about $22 million (in today's inflation-adjusted dollars) to a new Cardinals facility.

Because local residents will be chipping in a much smaller share for the Cardinals stadium, the question of whether there is significant economic impact to the community doesn't loom as large, he says.

"With Bank One Ballpark, you're questioning whether or not kicking $238 million over a three-year-plus period has generated a stream of revenue that is a good return on that investment. That's a legitimate question.

"I would rather not compare the two," he says. "Ours was specifically designed not to be that model, to be a more creative model that leverages dollars for the benefit of Arizona. We think we have done that."

The gubernatorial task force not only has distanced itself from BOB, but from the Cardinals, who have become a mere footnote in the overall tax plan. During a January 31 press conference at the Governor's Office, task force members rarely mentioned the Cardinals. The team's vice president, Michael Bidwill, attended the 90-minute presentation, but declined to comment on the proposal.

The briefing focused on other reasons for tapping public funds, including boosting the state's tourism-promotion budget, upgrading spring training facilities for the Cactus League, keeping the Fiesta Bowl as a major college football game and landing a Super Bowl every five years.

And the only way to achieve these goals, reporters were told, is to build the Cardinals a new football stadium.

Why is the task force suddenly concerned about Arizona tourism and the Cactus League? Politics. The only tax stream palatable to voters must come from out-of-state tourists.

But taxing visitors would hurt Arizona's moribund tourism industry. The only way stadium supporters could get the tourism industry to agree to the taxes was to promise that most of the tax revenue would be spent to promote tourism.

"It's basically compensation, if you will, the quid pro quo to the tourism industry, to the hotel industry in particular," says Mark McDermott, director of the Arizona Office of Tourism. "They are going to be asked to incur an additional tax. So what's in it for them? This is the answer."

The hotel and car rental taxes were identified as funding sources during discussions between Ferris, Phoenix development attorney Steve Betts, Cardinals political consultant Jay Smith, and Bank One chairman Michael Welborn, state records show.

Initially, the plan was to impose a 1 percent sales tax hike on hotel rooms in Maricopa County and a 0.5 percent hike on hotel rooms outside the county. The hotel tax was estimated to raise $1.1 billion over 30 years.

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John Dougherty
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Amanda Scioscia
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