More details have come out about the proposed retractable-roof ballpark for the Texas Rangers, who will be receiving some tax savings and other concessions in the deal.
Pending approval through a voter referendum in November, the Rangers and the City of Arlington will evenly split the cost of a $1 billion retractable roof ballpark in Arlington. The funding formula calls for the City of Arlington to pay for its share using a half-cent sales tax, and 5% and 2% taxes on hotels and car rentals. Those fees were instituted for the Dallas Cowboys’ AT&T Stadium—which will be paid off seven years early—and will be extended to cover the ballpark.
As for the Rangers, they will be aided in their payment by a 10% ticket tax and a $3 parking tax, which will need to be included in the referendum. The idea behind this formula is that it will save the Rangers money by allowing them to borrow at a lower rate, though the effectiveness of the taxes depends on revenue generated by games. More from the Dallas Morning News:
Dick Larkin, director of credit analysis at Stoever Glass, said he couldn’t guess what — if any — savings there would be without much more information.
“The fact that they’re putting taxes on the bonds aren’t necessarily going to make the bonds better, because it’s still going to depend upon the performance of the Rangers,” he said.
Brian McCabe, a bond lawyer in the Austin office of Shackelford, Bowen, McKinley & Norton, LLP, said this is generally a good time to enter the bond market. But interest rates will rely on the deal’s details.
“Does the addition of the taxes increase the attractiveness or decrease the interest rate on the bond?” McCabe asked. “Yes, if you believe the underlying assumptions, which we don’t have yet.”
There are also some separate agreements that could be extended or otherwise affected by voter approval of the ballpark. By leasing parking lots—including one that is to be developed on the Stonegate Pines sites—from the city, the Rangers will save on annual property taxes, though the team is on the hook for operating and maintaining the lots. If the ballpark is approved, the annual property tax savings—which includes $17.4 million from additional lots, plus another $5.4 million for the planned parking area—will run through at least 2054.
Furthermore, there is still the partnership agreement for Texas Live!, an adjacent entertainment complex that is being evenly funded by Arlington and the Rangers. According to the Dallas Morning News, the Rangers would kick in more money for the $200 million complex if the ballpark comes in below its $1 billion price tag.
Another component worth noting is the lease, which calls for the Rangers to pay $2 million per year in rent. Once the bonds for the ballpark are paid off, the team will be able to redirect that money toward improvements.
If the ballpark is approved by voters, it could open as early as 2020 or 2021.
Image courtesy Populous.
RELATED STORIES: Council Unanimously Approves New Rangers Ballpark; Vote Up Next; New Rangers Ballpark: A Billion Dollars, 2021 Opening; New Retractable-Roof Ballpark on Tap for Texas Rangers; Construction delayed on Texas Live!; Will Entertainment Development Lead to New Rangers Ballpark?; Mixed-use development pitched for Globe Life Park