Even with tourism hurt by COVID-19, Arlington taxpayers safe in Rangers ballpark deal

Reporters and editorial writers looking for every possible way to connect the coronavirus pandemic to economic stress are presenting a worst-case scenario on the financing of Globe Life Field.

But the whole picture of how funding for the project is structured strongly indicates that even with tourism at a standstill for now, Arlington taxpayers are safe in the deal.

Let’s begin with the Dallas Morning News editorial board’s recent take on the consequences of the shutdown in Arlington tourism.

The headline on the opinion piece declared that the city was “on the hook” for debt payments that are supported by the dedicated half-cent sales tax, rent from the Rangers, and other revenues from visitors staying in Arlington hotels and renting cars.

A few days later, the Star-Telegram ran a news story under a similar headline, warning that residents could be “on the hook.”

Readers may wonder if something has changed. But the only thing the city is “on the hook” for is its agreement to forward the revenues from the dedicated funding sources to those who hold the debt on the new ballpark.

There is no other obligation. The city has not guaranteed the debt, nor have any of the city’s assets been pledged to support the repayment of almost $500 million in bonds issued for the project.

Bond holders may look only to the dedicated sources of those revenues to get their money back.

And investors love these bonds. When the city offered them for sale two years ago, there were orders for the AA+ rated debt instruments of almost $2 billion – more than four times the amount of available bonds.

There’s a better way to describe the impact of the temporary loss of tourism dollars that affect taxpayers.

Let’s begin with this reality, as explained by City Manager Trey Yelverton: Nothing has changed from when voters approved the new ballpark proposal.

The debt was structured to last for 30 years. Conservative projections of how things would work out during that time period included the certainty that economic conditions would cycle through good times and bad.

In the second year of that period, the economy entered a downturn. If that means a shortfall in revenues to support the financing, it will extend the ultimate time for the expected early payoff of the debt. It doesn’t mean taxpayers are “on the hook” for anything different from what voters overwhelmingly authorized.

There’s every reason to expect that the new project, like the two before it, will be debt-free well ahead of the 30-year payoff date.

Voters have on four different occasions approved of public funding for major sports as part of Arlington’s tourism economy. Still, a minority of them do not like paying an additional fifty-cents on every $100 dollar of sales taxable purchases to support the projects.

But shoppers may cross Arlington’s city limits in any direction and pay another city’s sales tax. Each is higher than Arlington’s, but if you are determined not to pay into its support for sports facilities, that choice is yours to make.

In the end, the notion that Arlington will be “on the hook” as a result of the pandemic may make for dramatic headlines, but the good news is that it’s very unlikely.