By Wayne Schutsky
The city of Scottsdale officially reached an agreement with the San Francisco Giants and Scottsdale Charros that will keep the baseball team here until at least 2044.
The three parties originally agreed to a memorandum of understanding that was approved by the city council on March 19. That MOU laid out a number of commitments related to the ongoing renovation of Scottsdale Stadium, including each organization’s financial commitments.
The new baseball facilities lease agreement, approved by the city council on June 11, contains many of those same stipulations.
The first phase of the renovation is estimated to cost $50.6 million.
The agreement also keeps the Giants at Scottsdale Stadium until 2044 and includes two optional five-year extensions that could keep the team in Scottsdale through 2054.
Under the agreement, the city agreed to pay up to $30 million toward the ongoing Phase 1 of renovations in addition to $5 million it already paid toward design.
The Giants and Charros are obligated to pay $15.125 million and $2.7 million toward Phase 1, respectively.
The stadium’s concessions vendor Delaware North, contracted by the Giants, also agreed to make a one-time capital contribution of $2.5 million toward the improvements on January 15, 2020.
At its June 11 meeting, the City Council also approved the second construction contract with Hunt Construction Group for the phase 1 of the stadium project in the amount of $16.57 million.
Under the contract, Phase 1 must be complete by February 11, in time for the Giants to start Spring Training. The city, Giants and Charros will meet this August to discuss plans for Phase 2 of renovations. The complete stadium renovation is expected to be completed by January 1, 2023.
The city awarded the first construction contract to Hunt on May 19 in the amount of $22.85 million.
Assistant City Manager Bill Murphy says the contract was split in two, because the city was eager to secure construction supplies in time to meet Phase 1 deadlines.
“The urgency for us to get that done was to get long lead items like steel and concrete and things like that secured in advance with the understanding that we would be working toward completing this (facilities) agreement before we would bring the second portion of” the construction contract to council, Murphy says.
Though the price tag for Phase 2 is still unknown, Scottsdale has committed to paying an additional $5 million toward design of that phase, according to the baseball facilities agreement.
Beyond capital costs, the new agreement also laid out changes to how cleaning, utilities, maintenance and operations at the stadium will be paid for.
The Giants and Charros will make payments under the old facilities use agreement, approved in 2005, until 2021.
Starting in 2022, the Giants will pay the city $345,000 annually to cover operations and maintenance costs. That payment amount will be adjusted annually based on the consumer price index but is prohibited from increasing or decreasing my more than 3% in a given year.
The Charros will pay the city $65,000 annually for maintenance and operations, subject to the same CPI adjustments and restrictions.
The Giants will also make a lump sum $2.5 million payment to the city in April 2021 to satisfy obligations to make annual $125,000 payments from 2021 to 2044 for lifecycle costs.
In an exchange for the upfront payment, the city gave the Giants an annual credit of $167,000 against its other obligations to the city.
Beginning in 2022, the Giants will also pay the Charros an annual fee of $275,000.
Under the agreement, the Charros are required to use all net revenues from the agreement in ways that will benefit the city and/or residents, including through charitable and educational donations and through promotion or sponsorship of Scottsdale-based events.
A significant change is being made to how the team will pay for cleaning and utilities.
Under the old agreement, cleaning and utility payments paid by the team were capped at $400,000 for Scottsdale Stadium and the Giants practice facility at Indian School Park.
The new agreement requires the team to pay the city the full cost of cleaning and utilities at Scottsdale Stadium for the time in which the Giants are using the facility.
City officials estimated that first cleaning and utility payment under the new agreement will be around $740,000, Murphy says.
The Giants scheduled to move practice operations from Scottsdale’s Indian School Park to Phoenix’s Papago facility by March 2021. Scottsdale leased the Papago facility from Phoenix and then subleased the facility to the Giants.
The Giants will be responsible for all utility, maintenance and cleaning costs at Papago, according to the team’s sublease with the city. ν