Bell Bank Park in Mesa needs a grand slam this fall.
After opening in February to much fanfare, revenue for the destination 320-acre sports complex’s first six months of operation fell short of projections.
The complex failed to generate profits in its opening months, and in August, Legacy Cares, the nonprofit owner of the park, slashed its revenue forecast for the year by more than half.
Summer business was especially disappointing, prompting Bell Bank Park to modify its business model to be more of a seasonal operation than the year-round venue originally pitched to investors.
In order to hit even its scaled-down revenue targets and make next year’s loan repayments due to its institutional investors, Legacy Cares is counting on a dramatic increase in income once cooler weather arrives.
The project’s principals have committed to contributing $7.9 million out of pocket to help cover the loan payment due in January 2023 and say they will kick in more if necessary.
During an Aug. 30 disclosure call with investors, representatives for the park’s creditors asked Legacy Cares leadership pointed questions about the park’s ability to start generating greater revenue.
Chad Miller, CEO of Legacy Sports – the entity that manages the park for the nonprofit Legacy Cares – told the Tribune that Bell Bank Park is well-positioned to hit its targets for the coming months and meet all its financial obligations.
“We were dealing with material delays and some facilities at the park not being able to open up 100% for the first six to seven months,” Miller said. “We unfortunately had to deal with that, and the great thing about it is we now are heading into our busy season, which is September all the way through May.”
Miller said Bell Bank Park is seeing increases in registration for leagues and events, and venue manager Oak View Group is investing in the construction of a concert venue that is expected to begin hosting concerts in November.
Little time for the bottom line
It took major companies like Google and Facebook years to become profitable, but due to the nature of its financing, the 320-acre Bell Bank Park doesn’t have a lot of time to start generating healthy profits.
Legacy Cares raised money by selling $280 million in municipal bonds through the Arizona Industrial Development Authority. Municipal bonds are usually issued by cities and towns, but Arizona law allows organizations to sell tax-incentivized municipal bonds to investors through AZIDA.
AZIDA says the practice provides financing for projects in the public interest, like low-income housing, at no risk to the state – the bond seller is entirely on the hook for the loan repayments.
A spokesman for AZIDA said that only three projects out of the 128 it funded have defaulted.
A Wall Street Journal article published earlier this month featured Bell Bank Park as an example of the risks posed to investors by high-yield municipal bonds issued by “conduit issuers” like AZIDA.
It said these types of bonds surged in popularity in the last five years, but more recently “bond prices are plummeting, construction and labor costs are soaring and risky deals are faltering.”
Legacy Cares is slated to repay its bonds over 30 years according to a fixed schedule. Next year, Legacy Cares must repay investors a total of $24 million. The annual payments then ramp up to $32 million the following year.
Adding pressure to the venture, Legacy Cares doesn’t own the land the park is built on – it has a 40-year lease with owner Pacific Proving LLC and must pay $3.4 million in rent annually.
But Bell Bank Park’s backers are exuding confidence about the coming season, saying they have numerous contracts signed and events planned.
Asked if there was any chance of defaulting on the bonds next year, Legacy Chairman Doug Moss said “no.”
“We’re right on track in the fall and winter heading into a position where we don’t anticipate having any shortfalls whatsoever in regards to those payments next year,” he said.
“Everything is trending and tracking as we suspected it would the second part of this year, so, no, we’re very confident in the revenue anticipation and the partnerships that we have.”
Fans and doubters
Lots of people are enjoying and rooting for Bell Bank Park.
Legacy Cares shared data with the Tribune from foot traffic data service Placer.ai showing 2.9 million visits to the Bell Bank Park this year from 816,000 visitors.
On a recent weekday morning, pickleball players chatted outside a building after a match and young basketballers streamed into a building.
Located next to some of the fastest growing communities in the country, residents of Queen Creek and southeast Mesa are starved for entertainment and cultural amenities closer to home.
Sitting amid concrete warehouses and data centers, Bell Bank Park is a welcome project for many in the region.
Visit Mesa, the city’s official destination marketing partners, made Bell Bank Park a centerpiece of a presentation on the city’s tourism and hospitality industry in August.
Queen Creek officials earlier this year launched the town’s first tourism website and it also touts its proximity to the venue while also discussing the use of Bell Bank Park’s LED screens to advertise its attractions.
In Gilbert, both town and school officials looked at the park as useful,
Gilbert Public Schools in June inked a partnership agreement with Legacy Sports to use the venue for its Performance Academy, a flexible learning program for student athletes in grades 4-8.
Students are bused by the district to the facility to practice their particular sport because Legacy Sports offered over 15 different athletic competitive environments for students to be trained in everything from speed and agility and baseball, basketball, softball, cheer and gymnastics.
Town of Gilbert officials viewed Bell Bank as an addition that would draw in more baseball players to the Valley, which would benefit its sports venue, Cactus Yards.
Under the terms of a development agreement with Legacy Cares revised in October 2021, the City of Mesa has invested a total of $1.4 million to accelerate road work on the Ellsworth and Williams Field Road intersection and the State Route 24 freeway.
But some people are disappointed in the park’s execution so far.
A local sports club owner who wished to remain anonymous said the region needs a venue like Bell Bank Park.
He was excited to sign a contract a year in advance to hold his season at the park instead of renting fields at local high schools as he had done in previous.
But he said when it came time to start the season, promised amenities like a locker room and media staging area were underwhelming or non-existent.
Instead of a locker room, “they gave us chain link fence with tarps on it,” he said.
There were stands only on one side of the stadium, and the venue needed more bathrooms and better food and beverages, which he felt were overpriced.
He said it felt like there wasn’t enough staff managing the fields and he was notified close to the start of the season of scheduling conflicts that required him to change plans.
“The vision of what they wanted to build is amazing; it’s the execution of the operation where they failed,” he said, adding that he plans to hold next year’s season elsewhere.
Online reviewers have raved about the park but also have complained about traffic backups while entering and exiting the park and the high cost of food and beverages.
In the face of big financial demands, Bell Bank Park needs to win back these customers and add even more to the ranks.
Legacy Cares executives say they are ironing out Bell Bank Park’s opening year issues.
In the August investor call, Moss used a sports analogy to describe Bell Bank Park as it heads into what he believes is its prime season.
In the National Football League, he said, “the teams that seem to make the best second half adjustments are usually the teams that win.”
“We’re at halftime of our first year,” Miller said, and “we were able to learn from some of the things at the start of the year, even when some of our venues were not yet being able to operate 100% capacity. We learned a lot when it
came to customer service and the customer experience.”