Friday, April 29, 2005

Discussing the Mickey-Mouse Bill

Arizona House Bill 2365 has just passed 44-8 in the State House and Governor Napolitano has 5 days to sign or veto it. And what exactly is H.B. 2365? That depends on who you ask.

In an effort to win tourism dollars in Arizona, the State is proposing the creation of a special State Theme-park district devoted to developing two theme-parks, one in Williams near the Grand Canyon and one in Southwest Phoenix. The legislation calls for creation of a 1,000-acre park near rural Williams in an effort to win back tourism dollars that the State feels have been lost to Nevada in a battle over Grand Canyon tourism:

Trying to wrestle Grand Canyon tourism away from Nevada, state lawmakers Thursday gave a thumbs up to a $3 billion venture that would put theme parks and roller-coaster rides in the northern Arizona city of Williams.

In addition to the larger park in the rural north, the district would also include a 60-acre park in Southwest Phoenix. The Phoenix venture would include an indoor water park and would be situated near Cricket Pavilion.

State legislators and others are bullish on the prospect of raising new tax revenues estimated at between $75 & $150-Million dollars annually. Other folks in the state aren't as entranced by the proposal.

For me, assuming the financing (which I'll discuss in a moment) works as actually proposed, this appears to be a win-win. One of the things I noticed early on when we came here was the absence of any sort of large-scale amusement or theme-parks. Which didn't make a lot of sense to me given that the area lives in large part on tourism.

Tourism here is better described as golf-courses and day-spas. If you're not a golfer or an outdoor enthusiast, your tourist attractions are limited to fancy hotels, museums and civic attractions. Aside from the tiny few-acre facility at Castles-n-Coasters at I-17 and Dunlap and Westworld in Scottsdale, there's nowhere to go for a fan of roller coasters and/or the traditional amusement-park fare.

This plan would change that. The question is, at what price to Arizona taxpayers. As originally envisioned and proposed it seems very little, if at all:

"This (the legislation) gives us the ability to go out and get investment dollars and give them confidence that this is a real project," said former Page Mayor Gary Scaramazzo, who is part of the project team. "The taxpayers are not on the hook for a dime. This will be so much more than a theme park."

Financing would be a mix of private investment dollars and bonds. The yet-to-be-named developer of the project is required to show $500-million in private funds before any bonds are issued to pay for construction of the park(s), in tandem with those private funds:

The district is a legal mechanism that private investors could use to issue about $1 billion worth of bonds in the private market. That additional 9 percent levy would finance the bonds, which would be paid off in 30 years. The bonds would pay for the infrastructure for the two sites.

Yet not all are enthusiastic about the project, as noted earlier. Some see it as a hand-out to the vague-and-shadowy corporate-development interests: Some legislative critics called it "the Mickey Mouse bill," saying it sets a bad precedent by creating a new layer of government to assist private developers.

Frankly I don't see it that way. There is a clear-cut financing mechanism built-in here. And a fair one at that; you don't use the park(s), you don't pay. The only way Mr. or Mrs. Taxpayer-at-large gets dragged into this against their will- seems to me anyway- is if one or both of the facilities were to go under, leaving part or all of the debt-obligation on the books with no revenue to pay it off. A risk, but one that I believe acceptable. Assuming that the project isn't handed out to Fly by Night Development, Inc.

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