Phoenix City Council approves $230 million for Talking Stick Resort Arena renovation

It includes $150 million from the city
Talking Stick Resort Arena
Posted at 5:54 PM, Jan 23, 2019

The Phoenix City Council approved $230 million in spending for the renovation of Talking Stick Resort Arena -- home of the Phoenix Suns, Phoenix Mercury, Arizona Rattlers and numerous concerts and other live events -- in a scheduled meeting Wednesday.

The arena will undergo renovations between 2019 and 2021. The City of Phoenix will contribute $150 million toward the renovation, and the Suns will contribute $80 million.

The measure was approved by a 6-2 margin just before 6 p.m. Wednesday after over three hours of discussion by city council members, residents and business leaders who favored and opposed the renovations. Vice Mayor Jim Waring and Councilman Sal DiCiccio voted against the measure.

The city will fund its portion of the renovations through its Sports Facilities Fund, generated by existing tourism-related excise taxes -- specifically, a 1 percent hotel tax and a 2 percent rental car tax. Any spending beyond $230 million will be funded by the Suns.

Renovations will include repair and replacement of mechanical, electrical and plumbing infrastructure for the arena, which the Suns have called home since the 1992-93 NBA season.

Per the agreement, the Suns will build an off-site practice facility in Phoenix, at an estimated cost of $25-$50 million, in order to free up space at Talking Stick Resort Arena. The Suns will be required to pay for that facility.

The city council added an amendment introduced by Councilwoman Vania Guevara on Wednesday in which the Suns will commit at least $10 million toward community endeavors, including $2.6 toward the city's Head Start preschool program. Suns owner Robert Sarver, who attended Wednesday's meeting, expressed his support for the amendment.

The Phoenix City Council was originally scheduled to vote on the renovation project Dec. 12, but the vote was pushed back amid growing concern about the cost and sources of funding for those renovations. The city held a series of open forums in the last month to allow citizens to discuss the project before it was put to a vote.

Previously, the Suns' arena contract with the city ran through 2032, but the team could have opted out as soon as 2022 if certain criteria were met. With Wednesday's vote, that contract has been extended until 2037, with an option to extend it to 2042.

The city anticipates collecting additional fees and rent from the Suns as a result of the proposed renovation -- an estimated $60 million over the term of the agreement. The Suns and the city will both make annual contributions to a Renewal and Replacement Account to ensure the arena's infrastructure remains intact throughout the lifetime of the contract. Phoenix will contribute $2 million annually (up to $25 million total) from its Sports Facilities Fund, and the Suns will contribute $1 million annually (up to $12.5 million total).

The Phoenix Arena Development Limited Partnership will continue to pay all operations, event and maintenance expenses for the arena. The Suns agree to pay up to $200 million to the city if they relocate out of Phoenix before the end of the amended contract in 2037.

Sarver has been adamant that Talking Stick Resort Arena is in dire need of renovations -- but in December, he assured fans that the Suns will not leave Phoenix, despite a report that he could seek to relocate the team if the renovation measure was rejected.

Here's a breakdown of estimated renovation costs: (Go here for more details)

$99.58 million: Maintenance for mechanical, electrical, plumbing and communication systems. This includes brand-new pipe, fittings, insulation, valves and instrumentation, upgraded digital control systems, a new LED lighting system, a replacement of outdated communication systems, new plumbing fixtures, new sewer lines and new rainwater drain systems. The city says it would fund the majority of these expenses.

$26.37 million: Replacements for worn-out and non-working furniture, fixtures and equipment throughout the arena, along with new arena artwork, and repairs to food service areas and food service equipment for over 30 arena concession stands.

$18.65 million: Technology and security upgrades, including CCTV security system upgrades and a new multi-function video board, ribbon board and digital control room.

$17.63 million: Enhancements to the exterior wall and building envelope that will, in the city's words, "improve building efficiency and enhance the architecture and streetscape appeal of the facility."

$14.81 million: Improvements to lower- and upper-level seating areas, including resurfacing and recoating of stairs and platforms, replacement of damaged seats, new hallways and entrances to seating sections, and a widening of the concourse in the corners of the arena in order to provide views of the event floor.

$13.17 million: Improvements to locker rooms, VIP and premium spaces, and repurposing of the current practice courts in order to free up space for storage and circulation.

$11.67 million: New and repaired elevators and escalators throughout the arena.

$9.8 million: Main concourse improvements, including an expansion of the concourse to create more space, more concession stands, and improved circulation in order to make loading and unloading easier.

$7.21 million: Improvements to Lower Suite Level A, which includes club upgrades, improved circulation and back-of-house spaces. The Suns would pay for these improvements.

$5.01 million: Roof and structural upgrades.

$4.88 million: Improvements to the upper concourse, including widening of the concourse in order to improve circulation, which will improve access to seating, concession stands and restrooms. Also, new concession stands and storage improvements in the upper concourse.

$4.21 million: Improvements to Upper Suite Level B, including access, storage and circulation enhancements. The Suns would pay for these improvements.

$1.91 million: New signage and graphics, including "enhanced wayfinding, advertising, and other patron communications improvements throughout the arena."