Pima County expected to buy land for soccer fields, debt up 340 percent

pima-county-supervisors-richard-elias-ramon-valadezOn Tuesday July 1, 2014, the Pima County Board of Supervisor will consider spending $8.75 million for the purchase of vacant land near the Kino Stadium Complex for the development of soccer fields.

Generally, before prudent investors spend their money on a project of any sort of magnitude, they commission a feasibility study. This is especially true for those spending public monies on elective projects such as soccer fields.

The majority of the supervisors on the Board, at the direction of County administrator Chuck Huckelberry, are planning to approve an $8.75 million purchase of land for soccer fields on Tuesday without having conducted a feasibility study, or much else.

In fact, in response to questions from the AZDI, Huckelberry claims, “according to standards set by the National Recreation and Parks Association, of 1 soccer field per 10,000 population, the metro area still has a soccer fields deficit of 38,” yet the County manager hopes to develop 80 new soccer fields in total.

The project for the property in question would include 19 soccer fields, along with stadium seating for 5,000 to 7,000 fans, for a total of 28 soccer fields at the Kino Sports Complex.

In an email dated June 20, 2014, Huckelberry wrote that he is meetings the “demand” of a “consortium of metro-area youth and adult soccer leagues” who asked the County for more soccer fields. In his rationale for the project Huckelberry could not cite any instance in which the County had to turn away a bona fide request for proposal from any entity to Pima County in search of a site needing 80 fields for a revenue generating event.

However, in that email Huckelberry claims that the “consortium” needs “80 more fields to meet demand and relieve congestion and overuse of existing soccer fields.”

According to the Executive Director of National Association of Sports Commissions, Don Schumacher, who has over 35 years of experience developing feasibility studies, told researchers on Supervisor Ally Miller’s staff, that often it does not make good financial sense to proceed with projects, no matter how much they are wanted.

Huckelberry relied on demands from a handful of members form special interest groups, and small sampling of 2012 hotel tax revenue data provided by Visit Tucson.

The property is owned by Stardust REIF, a trust out of Scottsdale. The members of the business entity (agents/members) are Gerald Bisgrove, Robert Spieres, and Chris Heeter.

Once the land is purchased, the County plans to spend $45 million for fields. They are tying their hopes to the passage of a $500 to $650 million bond measure in 2015.

According to the Arizona Taxpayer Research Association (ATRA), “For many years, Pima County has solidly occupied the unfavorable position of the highest county property tax rates with the FY 2014 combined tax rate a full dollar higher than second place finisher Pinal County.”

As a result, the feasibility would be a necessity for almost any another other community in Arizona. As ATRA points out, Pima County is “already at a significant disadvantage both nationally and regionally,” in the “highly competitive marketplace for business retention and recruitment.” ATRA states that the tax increase recently passed by the Pima County supervisors, “not only moves Pima County in the opposite direction of where it needs to go, it is a decision that will likely handcuff economic development efforts for years to come.”

The decision to speculate on soccer fields, and as a result, exacerbate the very issue that is knocking Pima County out of contention for development, would be something a feasibility study could review and ascertain the level of risk involved in the move. Based upon that risk assessment, a prudent decision could be made.

But Pima County does not need to make prudent decisions, as long as the public is oblivious. As long as they are unaware of the debt, it remains unlikely that they will be unlikely to rise up and stop the run-away-train.

As Sean McCarty, president of ATRA notes in his column entitled; The growing debt you probably didn’t know existed, in the Arizona Republic, “The manner in which Arizona’s elected officials are acquiring debt is also troubling. Since the late 1990s, Arizona governments have migrated toward non-voter-approved debt. Since the late 1990s, Arizona governments have migrated toward non-voter-approved debt.”

McCarthy writes, “Certificates of participation (COP), municipal property corporations (MPC) and lease-purchase (LP) agreements are not only accessed without voter scrutiny, they are not subject to constitutional debt limits and draw primarily on the general fund of the entity that sells them.” according to the article.

According to McCarthy, “many jurisdictions have opted to avoid voter scrutiny and rely on ongoing operating revenues to finance the debt payments.” Pima County is one of those jurisdictions.

Pima County currently has “$1.35 billion in debt, 12 times that of Maricopa County, report McCarthy. “Its officials are growing the debt with COPs, up 340 percent since 2008, as well as revenue bonds, up 101 percent. Pima County historically spends more per capita than Maricopa County and is reflective in its county tax rates, which combine to $5.09 vs. just $1.48, the combined tax rate for Maricopa County.”

McCarthy and business interests attempt to convince the supervisors to reject Huckelberry’s proposed increase, but to no avail. They voted 3-2 to raise the taxes on June 17.

According to Schumaker, the first step in a feasibility study is market analysis. Depending on the results of the market analysis, a community would then either move to the next stage and conduct a financial analysis, in order to thoroughly to assess the return on investment.

Since the County, under the leadership of Chuck Huckleberry does not consider an actual return on investment for most pet projects, there is no reason to expect them to consider one in this case.

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