The constitutionality of a recently approved local tax to fund the new Chicago Cubs’ spring training facility may soon be challenged in Arizona court. The Arizona legislature approved a measure last week to levy a one-dollar tax on all automobiles rented within the state and an additional surcharge on all spring training games played within Maricopa County to finance the new stadium. In total, the city of Mesa is providing the Cubs with more than $50 million in state-raised funds in order to keep those “loveable losers” in Arizona for spring training.
The Cubs draw the biggest crowd out of all the teams that comprise the Cactus League, which is comprised of teams that hold spring training in Arizona. In order to keep these fans coming back to Arizona and spending money at the various venues throughout metropolitan Phoenix, officials realize the city must keep the Cubs satisfied with playing in Mesa.
Under the memorandum of understanding between the Cubs and Mesa, the team will buy the land for a new spring-training facility and then transfer ownership to the city. Thereafter, Mesa will build and own the new stadium, in essence gifting the Cubs a new stadium. However this decision is not sitting well with much of Major League Baseball and many throughout the metropolitan Phoenix legal community.
“The Commissioner is opposed to the proposed legislation,” Bob DuPuy, MLB’s chief operating officer, stated through an e-mail to The Associated Press, referencing the recently approved tax. “He is committed to finding an alternative method of financing that will allow the Cubs to continue training in Arizona.”
Commissioner Selig is not the only person within baseball who is at odds with this decision. Other teams within the Cactus League view this decision to finance the Cub’s new facility purely with tax money and a private bond offering as something that puts other teams at a disadvantage.
Building this facility and gifting it to the Cubs could also contravene Arizona law. Under a recent Arizona court decision, a beneficiary of a governmental gift must provide back to that entity some sort of comparable benefit. Thus, under the current arrangement between the Cubs and Mesa, a comparable tangible benefit must be present for this transaction to be constitutional.
It is quite possible that the Goldwater Institute, a local conservative constitutional litigation institution, may challenge the constitutionality of the Cubs-Mesa deal. In an opinion piece published in a Phoenix newspaper, Goldwater Institute Director Clint Bolick suggested that while a city may construct and own a sports stadium, the recently approved tax scheme might be an improper delegation of legislative authority.
As Bolick suggests, under this agreement, the Cubs need to do little more than “show up” in order to receive this tax windfall. Labeling this deal as such makes it very likely that litigation is not too far off the horizon. Such a lawsuit could be extremely costly, potentially soiling any benefit both the Cubs and Mesa hoped to derive from this agreement. Defending such a lawsuit would probably be long in duration and cost the defendants hundreds of thousands in attorneys’ fees and costs. With so many against building a new stadium through tax money, it is only a matter of time before the decision is challenged.
Jeff Levine is a staff member of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is a sports attorney, and the Executive Director of One Sports and Entertainment, International.
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