The Los Angeles Dodgers signed seven free agents this winter, including stars Jason Schmidt and Nomar Garciaparra, but the best deals they made might be the ones that enable them to move their spring home from Florida to Arizona.
The Dodgers will pay nothing to terminate their lease in Vero Beach, Fla. They will pay nothing to move into a new, two-team complex in the Phoenix suburb of Glendale, Ariz., in 2009. They could earn millions from selling a minor league team in Florida, millions more from running the Glendale facility and millions more by developing nearby land they could purchase at a substantial discount.
As baseball's training camps open this week, the Dodgers start reporting to Vero Beach on Friday for what they expect to be their penultimate spring there. Although the Dodgers are expected to challenge the Chicago Cubs and San Francisco Giants as the top draws in Arizona's Cactus League -- and profit from it -- owner Frank McCourt said he wouldn't pack up six decades of memories at storied Dodgertown only for the money.
"This is not an economic decision," he said. "This is a fan convenience decision."
In November, the Dodgers and Chicago White Sox agreed to move to Glendale, into what the city promised in writing would be "the finest spring training facility in major league baseball." In December, the Arizona Sports and Tourism Authority approved funding for the project.
The city is hammering out the details of separate contracts with the authority and the teams, with construction expected to start this summer and the grand opening scheduled for 2009.
For the first time since the Dodgers moved to Los Angeles in 1958, their fans would be able to experience spring training without a cross-country excursion. That accessibility was the primary factor in pursuing a deal in Arizona, McCourt said, even as he acknowledged the possibility of abundant revenues in this particular deal.
"I wouldn't do it if it wasn't a great thing for the Dodgers, the fans and the health of the franchise," McCourt said. "The way you're looking at it is [with] a little bit of rose-colored glasses."
The Glendale blueprint envisions a 12,000-seat stadium and adjacent parking area, separate clubhouses for the Dodgers and White Sox and six practice diamonds for each team. Glendale officials estimate construction costs at $76.8 million.
When a city or county in Arizona lures a team, tourists typically pay the majority of the construction costs, from taxes on rental cars and hotel rooms. The city or county generally picks up the rest of the bill, runs the stadium year-round and agrees with the team on how to split spring revenues from tickets, parking, and concessions.
In the Glendale deal, however, the Dodgers and White Sox would run the stadium year-round and keep all the revenue -- from naming rights, Cactus League games and non-baseball events such as concerts and trade shows. The teams would pay for routine maintenance but not for major renovations.
In addition, the teams can purchase 30 acres of city-owned land elsewhere in Glendale. The teams have 10 years to decide whether to buy, but the price is fixed, even as property values there escalate rapidly.
The deal minimizes an economic risk to Glendale, City Manager Ed Beasley said, because Cactus League stadium operations usually are not profitable. By affording the teams a financial incentive to book events year-round and enticing the teams to buy and develop other property in town, Glendale anticipates a significant increase in sales tax revenue.
"What cities live and die by is sales tax," Beasley said.
McCourt initiated discussions on including development opportunities in the deal, city spokeswoman Julie Frisoni said. The city agreed to hold two vacant parcels of land for the Dodgers and White Sox to purchase jointly, or for one team to buy if the other decides not to buy.
The parcels are not adjacent to the stadium but about one mile away, across the Loop 101 freeway, closer to the Arizona Cardinals' football stadium and the Phoenix Coyotes' hockey arena. The Dodgers and White Sox can buy the land at any time within 10 years, but the price is fixed at $10.85 a square foot.
"It's a nice feature," McCourt said. "No particular bargain there."
Not at this time, perhaps. Nearby land available for commercial development currently sells for $8 to $10 a square foot, said Bruce Campbell, first vice president at CB Richard Ellis in Phoenix. But he said that value has roughly doubled in the last four years and, with Glendale growing rapidly, could double again in another four years.
At that rate, the land could be worth $20 a square foot, or more, by the time the Dodgers and White Sox exercise their option to buy.
"I think it's a very good deal," Campbell said. "If they exercise it five years out or eight years out, and it's fixed at that price, that's a really good deal."
The two parcels total 29.6 acres, so the purchase price would be $14 million. If the land value doubles before the teams buy, the city would lose almost $12 million because of the difference between the fixed option price and market value.
The city bought the land for $7 million in 2001, Frisoni said. The land has since remained vacant and generated no revenue.
Mayor Elaine Scruggs said the city had to buy the "irregularly shaped" parcels of land to clear the way for future development.
"We will be making a fair return on the purchase price," she said.
Whatever revenues the Dodgers generate from developing that land would not be tapped for baseball's revenue-sharing pool, Major League Baseball President Bob DuPuy said.
McCourt declined to say whether he would have made the deal if it did not include a development opportunity or if he had to pay market value for the land. He said he would not consider exercising the land option for three to five years and would not discuss what he might do with the property.
"I'm focused on the spring training facility," he said.
He called it "conceivable" that he could replicate Glendale development ideas in the Dodger Stadium parking lot, but said he has not yet considered any such concepts. His interest in pursuing development in Arizona, he said, reflects the relocation of his real estate company from Boston to Los Angeles.
"That is one of our core businesses," he said. "We do have the desire to develop both here in Southern California and in other parts of the Western United States. We're not going to rush into anything. The Dodgers are our No. 1 priority."
In Vero Beach, the Dodgers have long been a top priority, so much so that the city and county bought Dodgertown from the team in 2001, renovated the facility and leased it back to the team for $1 a year.
For the Dodgers to break their lease, Florida officials initially said, the team would have to pay about $15 million to cover outstanding bonds.
However, the lease also offers the Dodgers the option to buy back Dodgertown. If they did, they could profit by selling the property to a developer, who might raze the complex rather than allow the city and county to seek a team to replace the Dodgers.
As a result, Vero Beach and Indian River County tentatively have agreed to let the Dodgers break the lease without charge, Vero Beach City Manager James Gabbard said. In exchange, the Dodgers will let the city and county remain in control of the property. McCourt would not say whether he would have moved had the Dodgers remained obligated to pay the $15 million.
"What they're saying to us is, they just want to walk," Gabbard said. "They're leaving something on the table. They're being gracious. Mr. McCourt could already have sold it and walked with some extra money."
The Dodgers could walk with some extra money nonetheless, by selling the minor league team they own in Vero Beach. As a precursor to the spring training move, they have shifted one of their Class-A affiliations from Vero Beach to San Bernardino.
For the next two years, they have agreed to operate the Vero Beach franchise as an affiliate of the Tampa Bay Devil Rays. In 2009, as the Dodgers move into their new spring home in Arizona, the Devil Rays will move to a new spring home in Port Charlotte, Fla.
The Devil Rays could then buy the minor league franchise from the Dodgers and move it to Port Charlotte. A Florida State League franchise is worth $3 million to $5 million, according to the general manager of another team in the league.
"We'll cross that bridge when we come to it," McCourt said.
Although the Dodgers committed $127 million to free agents this winter, including $47 million to Schmidt and $44 million to Juan Pierre, McCourt said the winter spending and the potential increase in spring training revenues were "totally disconnected."
Glendale has yet to secure final approvals, McCourt said, and the cash will not start flowing until 2009. In any case, he said, revenues from spring training represent "a small piece of our overall economics."
The Glendale complex will provide the players with a state-of-the-art training facility and provide fans with easier access to spring games, McCourt said. With land values subject to fluctuation and development opportunities uncertain, he said he cannot predict how much revenue the Glendale deal might deliver.
"It remains to be seen," he said. "We didn't make the decision based on that."
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Spring training in Arizona
The expected 2009 moves of the Dodgers and Chicago White Sox to Glendale, Ariz., and the Cleveland Indians to Goodyear, Ariz., would make 14 teams at 11 spring training sites in Arizona. The teams and facilities:
[please see microfilm for full map information]
Major league teams that train in Arizona
Royals: Surprise Stadium
2. San Diego Padres, Seattle
Mariners: Peoria Sports
3. Milwaukee Brewers: Maryvale
4. Dodgers, Chicago White
Sox: Glendale, 2009
5. Cleveland Indians: Goodyear,
6. Oakland Athletics: Phoenix
7. San Francisco Giants:
8. Angels: Tempe Diablo
9. Chicago Cubs: Hohokam
10. Arizona Diamondbacks:
Tucson Electric Park
11. Colorado Rockies: Hi Corbett