The city of Arlington has formalized a plan to refinance its AT&T Stadium debt to help pay for the city’s half of the new $1 billion retractable-roof stadium for the Texas Rangers.
The refinancing plan is among numerous legal documents the City Council has approved recently to translate the many provisions of the master agreement between the city and the Rangers into firm contract language, city officials said.
Some documents established a larger stadium capacity than the 38,000 seats noted in the original papers, and others set a $100 million price for the stadium if the Rangers want to purchase it after the lease expires in 2054.
The city and the Rangers announced the joint venture and master lease agreement in May 2016, and updated plans call for a grand opening to start the 2020 MLB season. The city will use a half-cent sales tax, 2 percent hotel-occupancy tax and 5 percent car-rental tax to fund up to $500 million, with the Rangers committed to paying any cost overruns.
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Currently the city is using the tax revenues to pay off its $325 million share of construction costs for AT&T Stadium, where the Dallas Cowboys play. Now officials intend to put the brakes on accelerated payments and use the savings to start work on the new baseball stadium.
The city would refinance the remaining $147 million of its AT&T debt by Nov. 30, extending the note out to the original payoff date in 2034, according to Mike Finley, Arlington’s chief financial officer.
That 30-year note began in 2005, but the city was on track to get it paid off by 2021, saving $136 million, The fast pay-down already has saved $118 million, Finley said.
The city took a similarly aggressive approach and paid off Globe Life Park debt about 10 years early.
The bonds would be repaid over 30 years, ending 2048.
Also among the documents, approved at the June 27 council meeting, were contracts for the Rangers to implement a 10 percent admission tax and $3 parking tax on game days to help cover its share of the stadium cost. Both charges were part of the overall tax package approved by voters on Nov. 8. But the Rangers still haven’t decided whether to use that revenue stream.
“The documents are signed now, which puts the mechanisms in place, but we’re still working through our funding agreements,” said Rob Matwick, Rangers executive vice president of business operations. “We’ll be making those decisions soon.”
On the stadium seating, the new documents noted a 40,000-seat capacity. But Matwick said a stadium larger than the 38,000 seats has “always been our thinking.”
“It’s been a give-and-take while we’re in the design process,” he said. “I would say that in the next two months we’ll be much closer to a definitive number. But I expect it to fall in the 40,000-42,000 range.”
Among other highlights:
▪ The city has to sell its bonds and have its $500 million available by September 2018.
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▪ The city has the option to require the Rangers to demolish Globe Life Park, which might sound shocking to the fans who celebrated the Rangers promises to repurpose the stadium.
“The purpose of that is to provide incentive to the team to facilitate the ballpark’s repurposing,” City Manager Trey Yelverton said. If that’s not happening by the end the agreement in 2024 and there’s not a plan for it, he said, the city doesn’t want to be stuck with the cost of demolishing and clearing away the old ballpark.