Following The Money - Part 1: How Glendale Made It Happen

Over the next week, Stadium Watch will take a special look at budgets and financing. The first part details how legislators and citizens in Arizona came together to finance their stadium.

It was a moment for Glendale to be proud of.

Confetti rained on the field. Players hugged each other. The winners smiled while the losers fell to the ground in shock. Millions watching across the globe traded looks of glee and disbelief. And as one Giant after another held the Lombardi trophy high, the residents of Glendale must have felt pride. As all eyes looked at the celebration, they looked at University Of Phoenix Stadium.

The game wasn’t just a game. It was the shining moment for their monument.

The stadium, which cost over $450 million, has become the centerpiece of Arizona. It has hosted Fiesta Bowls, college football’s National Championship, major concerts and Super Bowl XLII since its inception. Other events such as Wrestlemania are being talked about.

University of Phoenix Stadium didn’t appear as a mirage in the desert. It took over five years of negotiation and preparation as well as a dip in the value of its financial source.

Stadium development had been in the minds of Arizona lawmakers since the Cardinals moved there in 1988. In 1999, Gov. Jane Hull decided it was time to make the stadium a reality.

“A … task force was formed … to develop a plan that would make good on the promise that was made to the Arizona Cardinals when they first moved from Missouri,” Chuck Foley, chief financial officer for the Arizona Sports and Tourism Authority, said.

Foley has been with AZSTA since March 2001. He was the third employee hired.

“In addition, the task force identified other areas that would bolster Arizona’s future economic picture,” Foley said, “by providing funding to the Office of Tourism, support the strengthening of the Cactus League and promote and build on youth and amateur sports.”

After months of work, politicians, business owners and residents came together to create Proposition 302. This enacted a new ‘tourism tax’ where hotel tax would rise 1% and a 3.25% surcharge on car rentals was added as well. Tourism officials told the task force that the package would help jumpstart Arizona’s largest industry.

This proposition established the AZSTA, which funnels the funds into building and maintaining new recreational facilities. The AZSTA spent over $300 million to build the stadium. The City Of Glendale spent $9 million in tax dollars on the project after they were chosen in the summer of 2002. The Cardinals contributed $145 million for the stadium and pay $150 million each year.

The AZSTA receives funds from two different sources – the tourism-focused taxes and fixed income from renters. The funds are used to pay off bonds and take care of general operation. Within the last fiscal year, the taxes are on course to bring in more than the 5% growth that was expected.

Arizona made it a priority to keep the stadium taxes from hurting the general public.

“I cannot speak for all Arizonans but believe that most people are opposed to additional taxation,” Foley said. “…98% [of the tourism tax] is borne by non-Arizonan visitors to the Valley of the Sun.”

The task at hand was daunting for Maricopa County. Industrial rates and economic growth was changing. Speculation ran high. But after major growth in a town that has swelled in population and popularity, Glendale has come from living in Phoenix’s shadow to making waves of its own.

“Glendale is a suburban community that has experience exponential growth,” Foley said. “Especially with the building of signature projects such as the Jobing.com Arena for the Phoenix Coyotes, Westgate Center and, of course, University of Phoenix Stadium.”

Glendale’s success is a far cry from its neighbor to the west. Arizona voters were willing to let a tourism tax through, but San Diego voters do not seem willing to let any tax slip through, no matter whom the tax is directed towards.

“The taxpayers of Arizona devoted far more than $9 million to the project in Glendale,” Chargers special counsel Mark Fabiani said. He maintains that the Chargers “have never proposed any contribution of tax dollars” for any stadium project.

“The Chargers have no expectation of such taxpayer contributions for the San Diego effort,” Fabiani said.

The Chargers are connected to the Glendale project. In a 2007 panel discussion held at San Diego State, Glendale Mayor Elaine Scruggs admitted she wasn’t in favor of the plan at the time, but has since changed her tune. Fabiani was also a speaker at that meeting, and kept communication with Arizona in the years previous.

“Back in 2001 and 2002 we were all working off the same cost estimates: $400 to 450 million for a stadium,” Fabiani said. “And, as it turns out, that's about exactly what Glendale spent.”

Compare that cost for a stadium in 2002 with the billion-dollar stadiums set to launch in East Rutherford and Arlington. Lucas Oil Stadium, which will be the home of the Indianapolis Colts this upcoming season, cost $675 million.

The bay front project is expected to cost at least $1.2 billion.

“Had we embarked on our Qualcomm proposal back in 2002 to 2003, when the Chargers first proposed it,” Fabiani said, “we could have built a stadium and completed infrastructure improvements for about one half the cost of what the stadium and infrastructure would cost today.”

The money the Chargers are prepared to spend is much more than the Cardinals spend on University Of Phoenix. According to Foley, the team is actually paying more then they were asked.

“The Cardinals were required to provide $85 million in stadium construction funding and they ended up contributing approximately $145 million,” Foley said. He preferred not to comment on the Chargers’ negotiations.

At this point, Chula Vistans can only wonder if a stadium at this time in that location can be the spark to revitalizing their economy as University Of Phoenix Stadium has been to Glendale.

Fabiani said that a new stadium would be “the host of Super Bowls as well as home to college bowl games.”

“The University of Phoenix Stadium and the other Glendale facilities have gotten excellent reviews,” Fabiani said, “and people who attended the Super Bowl there in February gave the stadium high marks.”

“Glendale was experiencing growth,” Foley said, “and the stadium solidified their position in the Valley and the U.S. as being a sports and entertainment destination.”