Albatross of Debt Weighs on Super Bowl City

The New York Times
Sunday, January 25, 2015
Ken Belson

GLENDALE, Ariz. — Jerry Weiers lives less than two miles from University of Phoenix Stadium, where the New England Patriots will play the Seattle Seahawks in the Super Bowl on Sunday. Weiers also happens to be the mayor of Glendale.

Yet as politicians, chief executives and tens of thousands of well-heeled fans rub shoulders that day in the stadium in Glendale, a western suburb of Phoenix, he plans to watch the game on television in his living room, because he has not been offered a ticket.

“It was on my bucket list, but it’s not going to happen,” Weiers said. “If I had my druthers, I’d rather be in the stadium. I’ve had people say that if I was a team player, I might have gone to the game. But I’m a team player for my city.”

Being a team player means falling in line behind the N.F.L., the state authority that runs the stadium and the Arizona Cardinals, its main tenant. It also means spending millions of dollars to police Glendale during the week, even though many of the Super Bowl-related events will be in downtown Phoenix and in Scottsdale, he said.

Weiers is not shy about making that point, so he is not surprised that he was snubbed. Critics have called Weiers ungrateful because the Pro Bowl and the Super Bowl will draw thousands of visitors to his city, and some of them will visit restaurants and hotels there. Glendale will also receive lots of free advertising during game broadcasts, though a vast majority of people visiting Arizona for the Super Bowl will visit the city only on game day.

James Cassella, the mayor of East Rutherford, N.J., was also criticized after he complained last year that his borough had been overlooked even as the Super Bowl was played at MetLife Stadium there.

But the friction in Glendale is acute because the city has a reputation for betting big on sports — and paying a price for it. In the last decade, the city spent hundreds of millions of dollars to build a hockey arena for the Coyotes and a spring training complex for the Chicago White Sox and the Los Angeles Dodgers.

The hope was that the facilities would prompt residential and commercial development. But when the recession hit in 2008, the Coyotes went bankrupt, the mall next to the arena foundered, and the city was overwhelmed by its debt payments and was forced to slash public services.

“The city of Glendale is the poster child for what can go wrong” when a city invests heavily in sports, said Kevin McCarthy, the president of the Arizona Tax Research Association. “You don’t want to be building stadiums and not be able to hire police officers.”

Glendale is by no means the first city to have sports facilities turn into albatrosses. Cincinnati and Miami, to name just two, built stadiums for wealthy owners in deals that backfired.
But the scale of spending in the city of 230,000 residents is unique. According to Moody’s Investors Service, Glendale’s debt is equal to 4.9 percent of its tax base, nearly four times the national median and twice the average rate for cities in Arizona. More than 40 percent of the city’s debt is dedicated to paying off sports complexes.

“In general, it’s pretty uncommon to finance big sports projects like that,” said Matthew Jones, an analyst at Moody’s.

Critics say that the heavy debt burden has made Glendale less capable of helping host mega-events like the Super Bowl. At the same time, the hotels in Glendale contributed only a handful of rooms to the N.F.L.’s pool of accommodations, preferring instead to try to earn more by selling directly to visitors.

“They’ve done the bare minimum,” said Michael Bidwill, the principal owner of the Cardinals. “They’ve tried to gouge fans coming here.”

Bidwill said his trouble with the city had begun years ago. Though the stadium was built by a state authority, the city reneged on a promise to make infrastructure improvements around the stadium, which opened in 2006. He has also clashed with the city over parking.

“Glendale has been a poor partner in all of this,” Bidwill said. “They didn’t live up to their obligations to the one shining star in their community.”

Despite its past shortcomings, the city has made strides. A new city manager and finance director, installed in 2013, pushed to impose a temporary local sales tax to shrink a yawning budget gap. They refinanced the bonds issued to build the baseball training complex, and they struck a deal to pay the Coyotes $15 million a year to run the arena in return for a share of the naming rights and other revenue.

Moody’s and Standard & Poor’s have rewarded the moves by raising the city’s credit outlook to stable, from negative.

“This is the hand we were dealt, but we changed the way we do things operationally,” said Brenda Fischer, the city manager, who arrived 18 months ago. “While we stabilized things, we’re certainly not in a ‘Let’s go on a spending boom’ mode.”

Fischer said it was nice that the city was receiving mentions on sports broadcasts, but “having ‘Glendale’ said on TV doesn’t equate to money in the bank.”

The money in the bank is not overwhelming, either. According to Elliott D. Pollack & Company, an economic consultant, Glendale collected an estimated $1.24 million in direct revenue and state shared sales taxes during Super Bowl XLII, held in the city in 2008.

The revenue is expected to increase this time, because more hotel rooms have been added and the shopping options near the stadium have expanded. Glendale is also hosting a chocolate festival and football-themed activities, including concerts. DirecTV has set up a pavilion near the stadium, too.

(By contrast, the N.F.L. Experience and the media center are in downtown Phoenix. ESPN will broadcast from Scottsdale, an eastern suburb, which will also be hosting a golf tournament.)

For all it has done to attract business, Glendale expects to spend about $2.1 million on security during Super Bowl week. Weiers said he hoped that the state would reimburse the city for that cost, but a bill introduced in the State Legislature last year went nowhere. “I’m not anti-Super Bowl or anti-N.F.L.; I just want to make sure my citizens are covered,” Weiers said.

Whether that attitude gets Weiers invited is another question. Cassella, the East Rutherford mayor, said that after stories surfaced that he, too, had been unable to get a Super Bowl ticket, Jim Irsay, the owner of the Indianapolis Colts, invited him as his guest. John Mara, an owner of the Giants, sent him a parking pass.

But that did not leaven his disdain for the highhanded way he was treated by the N.F.L. and the Super Bowl organizers. His town’s firefighters, he said, spent thousands of dollars on food for other public service workers, yet the league did not even make a donation to the department.

“They make their own rules,” Cassella said of the league and the Super Bowl organizers.

Cassella sympathized with Weiers. “I feel for him,” he said. “You hope that the people who are visiting Glendale leave with a good impression.”