VOL. 128 | NO. 224 | Friday, November 15, 2013
AutoZone Park Deal Resurfaces at Crucial Time
By Bill Dries
The Christmas tree in the plaza of AutoZone Park is more than a reminder of the holiday season.
A plan has surfaced that would have the St. Louis Cardinals buy the Redbirds and the city buy AutoZone Park.
(Daily News File/Lance Murphey)
The tree serves as a reminder for the tight timeframe that awaits a proposal for a city government purchase of the baseball park as the St. Louis Cardinals baseball franchise buys the Memphis Redbirds ball club, the Cardinals AAA minor league affiliate.
Potential investors including city government leaders have been invited to a rally Tuesday, Nov. 19, by the nonprofit Memphis Redbirds Baseball Foundation, which owns the team franchise and the ballpark.
The foundation financed $72 million in bonds to build the ballpark in the early 1990s on the northeast corner of Third Street and Union Avenue.
The purchase of the franchise by the Cardinals is something the Cardinals front office has considered several times in recent years. The first move was stopped by the coming of the national recession in 2008.
This past April, team executives renewed their interest. But it came with no interest by the Cardinals in buying the ballpark.
The plan that has emerged since then for the ballpark involves the city issuing revenue bonds to buy it from the foundation.
The bonds would be repaid from money the Cardinals pay as they lease the ballpark for their team, sales tax rebates on items bought by fans at the ballpark as well as money the city gets from payment-in-lieu-of-taxes – the tax breaks that are used in economic development projects.
“I am on board with the concept that was presented initially,” Memphis Mayor A C Wharton Jr. said Thursday, Nov. 14, in his first public reaction. “I’m still waiting to see the final product – if it remains in the framework in which the city is not left exposed to greater financial liability. That’s first.”
The impact on city finances is also expected to be the first question Memphis City Council members ask when they are formally presented the proposal at their Dec. 3 meeting, most likely in that day’s executive session of the council.
The Tuesday session at AutoZone Park is designed in part to build support for the project in advance of going to the council, which was cool to the general idea last year when it first surfaced.
Wharton said there is likely to be a push by the foundation to get a quick vote from the council by year’s end.
“From what I hear for their compressed time sequence obviously investors and all are looking at tax considerations and a lot of things will probably have to be done in December before the first of the year,” Wharton said.
The council is expected to have a crowded agenda of financial items already in the last month of the year, which is the midpoint of the local government fiscal year. It is a time of “mid-year fixes” to budgets in normal fiscal years. This is not a normal fiscal year at City Hall.
At one of the two council sessions in December, Wharton is expected to make his recommendation on how to fund at least more if not all of the city’s unfunded pension liability – a fix that could mean devoting an additional $60 million to $80 million annually toward the liability. The additional funding of that is expected to take money from other high-profile projects outside the inner financial workings of City Hall.
The city is under pressure to take the steps itself or risk having a fix for the unfunded liability imposed by Tennessee Comptroller Justin Wilson.
Earlier this year, Wilson threatened to withhold approval of a city bond restructuring unless the city took immediate steps including using its reserves to restore several accounts within city government that had money advanced from them to other initiatives. At the time, Wilson also said the unfunded pension liability was another concern he had about city finances.
When the city resolved his initial concerns, Wilson reminded Wharton of the pension liability concerns again.
If the city doesn’t act on those concerns and even if Wilson doesn’t act, the Tennessee legislature could.
Wharton said he supports the general concept of the AutoZone Park plan, but wants to hear more of a case for what the benefit to the city is beyond the brick walls of the ballpark.
He talked specifically about the backing of a Major League franchise for nonprofits and charities similar to those undertaken by the other professional sports franchise with a presence in Memphis – the Memphis Grizzlies of the NBA.
“What’s going to be the benefit beyond the parameters of the park Downtown,” he said. “Whether the city stands or is exposed directly or not, the full faith and credit of the city is behind it and the entire city ought to benefit. I want to see that there is a benefit to the community as a whole.”