- Phoenix pays $150 million for arena renovations.
- Suns pay $80 million for renovations and any cost overruns.
- After the renovation, Phoenix will pay $2 million annually for 12 ½ years into a new renewal and replacement fund, which will be used for future renovation needs.
- Suns will pay $1 million into the new fund for 12 ½ years.
- Suns will continue to operate and maintain the building, including booking concerts and other events.
- Suns will continue to pay rent to the city (calculated as a percentage of annual proceeds).
- Suns will build a new practice facility (estimated to cost $25 million to $50 million) somewhere in Phoenix.
- Suns commit to staying in downtown through 2037 with an option to extend the lease to 2042. If the team leaves before 2037, it will face up to a $200 million fine.
- Requiring the Suns to spend $10 million on community benefits (either through nonprofits or city programs), including at least $2.6 million to the city’s preschool program this year.
- The city will hire someone to oversee Phoenix’s expenditures on the renovations.
- The city will commit the $1.5 million rent increase from the Suns to homeless issues.
- 80 percent of any additional revenues generated by the city from the arena will go toward city public-safety costs.
This is a favorable deal for the Suns and owner Robert Sarver. It also probably works for people who want the Suns to remain in downtown Phoenix, including some Phoenix residents.
But many Phoenix residents aren’t interested in the NBA. And it’s an awful deal for them. Their taxes will now subsidize a multi-billion-dollar business. That money could be put to far better uses – schools, police, etc.
The notion that sports arenas generate economic growth has been consistently debunked. If the Suns weren’t in Phoenix, people would find other ways to spend money on entertainment. As much as everyone talks about bars and restaurants near the arena, nobody mentions the restaurants and bars in other parts of the city that are hurt when taxpayer money is spent to push people toward the arena’s neighborhood.
This wasn’t as bad for Phoenix as it could have been. The city got more-favorable terms than the initial proposal. The Suns extended their lease for 15 years.
It just came at way too high of a cost.