The House GOP tax reform bill has the potential to throw a nasty curveball on Arlington’s financing of the Texas Rangers new $1.1 billion ballpark, Globe Life Field.
But U.S. Rep. Joe Barton, R-Ennis, whose district includes the stadium, is trying to insert language in the bill to protect Arlington from a portion of the legislation that would prohibit local governments from taking advantage of tax-exempt municipal bonds to finance stadium projects.
“The City of Arlington was going to sell their bond package starting March of 2018, and so obviously if we change the rules on them so they’re not tax-exempt, they’ll have to offer a higher interest rate because they’re re-taxable and that will cost more, they’ll have to pay more interest,” Barton said Tuesday.
Without any changes to the legislation, Barton said eliminating the use of tax-free bonds on the project would cost Arlington more than $200 million.
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“Since this project was approved and construction has started — they just haven’t sold the bonds — they feel like it’s fair to let them stay under the old rule, and I agree with them on that, and everyone I’ve talked to on either side of the aisle up here agrees with that,” Barton said.
The bill could come to the House floor as early as Thursday. It’s uncertain if Barton’s language will be included but the congressman remains confident that a fix will be included.
“It could be in the bill that comes to the floor tomorrow, because Chairman Kevin Brady supports it, but because of the way these big bills come together it may be too late to put it in the bill,” Barton said. “It’s not going to be a separate amendment on the floor because they’re not going to allow any stand-alone amendments to be debated. So if it doesn’t go in the bill, we will put it in when we go to conference with the Senate.”
Arlington officials were pleased with Barton’s efforts but declined to confirm the $200 million figure.
“It is hard to estimate a cost, given we don’t know what the interest rate will be when we issue the bonds,” city spokesman Jay Warren said. “It is fair to say it will be significant.”
Arlington Mayor Jeff Williams said the $200 million number “sounds way high” but it’s important that the criteria for the stadium project not change after the project has started.
“I think it’s really the right thing to do,” said Williams, referring to Barton’s fix. “Our voters moved forward based on the rules in place.”
The issue has caught the attention of Arlington City Council members including Kathryn Wilemon, who met with Barton earlier this week in Washington.
“It’s extremely important,” Wilemon said. “It would up the price we would have to pay for the bonds and cause us to spend more money. It would probably cause us to slow down the project.”
Last year, Arlington voters approved using up to $500 million in tax revenue for the retractable-roof stadium. It plans to sell the bonds in the first quarter of 2018.
The Rangers broke ground on the stadium in late September and are currently doing dirt work for the project.
The Rangers are picking up the remainder of the tab for the $1.1 billion stadium. Team spokesman John Blake referred all questions concerning the bonds to Arlington officials. The GOP legislation has no impact on the Rangers portion of the financing.
Warren, the city spokesman, said officials were encouraged about Barton’s efforts.
“The City of Arlington has been following this issue and we’re pleased to see that a change to the House tax plan is under consideration,” Warren said. “Changing the tax policy in the middle of the process is not good public policy, particularly when the stadium is already being built and the change would add significant cost to the project.”
Arlington City Councilman Charlie Parker, whose district includes the Entertainment District, also spoke with Barton on Veterans Day and said he believes the issue will be resolved.
He said the concept of changing the rules on stadium bonds after the project has been approved is unfair to voters.
“If we knew it was going to cost an additional $200 million — if indeed that’s a good number — we would have looked at the project in a different way,” Parker said.