Imagine, sang John Lennon. And
that's just what proponents of the Decades Music Theme Park
project are doing. They picture a major rock-and-roll-based
attraction in Eloy, with exciting rides, re-creations of album
art, concert spaces, music impersonators and hotels. Sounds like
fun.
But Arizonans are being asked to do more than imagine.
Supporters of the $800 million project want the legislation to
let them create a special district that would allow them to levy
a sales tax to support tax-exempt bonds. And thus they can get
cheaper financing.
This wouldn't be a first. Lawmakers have already approved a
similar package to spur development of a theme park in Williams.
But that doesn't change the bottom line: Arizonans are being
asked to give substantial privileges to Decades. The public
would have a stake in its success.
So lawmakers can't consider this project with stars in their
eyes. They need to take a clear, cold look at key issues,
including:
• Attendance: Decade's projections are extremely optimistic,
with 6 million visitors in the first year. Only six U.S. theme
parks, all in Florida, reached that level in 2006. "Nobody gets
6 million visitors their first year," says Dennis Speigel,
president of International Theme Park Services.
• Management: The major consultant for the park is Peter
Alexander, who created attractions in major theme parks based on
Batman and King Kong in the 1980s and mid-1990s. While project
supporters call Alexander an industry icon, his name isn't
familiar to some major theme-park experts, including Speigel,
the past president of the International Association of Amusement
Parks and Attractions.
• Market: The theme-park industry is mature, with little
growth in attendance outside the Disney parks. Hard Rock Park, a
similar project, is opening in Myrtle Beach, S.C., next spring.
It should give an indication of whether a rock-themed park will
draw crowds. Decades supporters are assuming that the $400
million S.C. park would be a complement, whetting people's
appetite for a larger attraction in the West, and not a
competitive threat. Meanwhile, there's competition from theme
parks next door. "You've got the entire developed Southern
California market just a few hours away, which markets
aggressively," says Robert Niles, editor of the Theme Park
Insider Web site.
• Legal rights: A rock-and-roll park will require legal
permission from a lot of stars or their estates, not to mention
royalty payments. Some of the most towering names, including
Elvis and the Beatles, are indispensable. The Decades group says
it has an LA attorney working on these issues.
Usually, these are issues that a company and its investors
wrestle with on their own. But they're seeking the ability to
issue tax-exempt municipal bonds, which lowers the cost of
borrowing. They want the Legislature to let Decades establish a
special district on its property that could issue tax-exempt
bonds. The district would have the authority to impose a sales
tax (capped at 8 to 10 percent) to repay the bonds.
Supporters point out that the new tax wouldn't replace the
regular sales tax but be on top of it. They say taxpayers
wouldn't be on the hook for repaying the bonds.
But Kevin McCarthy of the Arizona Tax Research Association sees
a risk if Decades flounders. "When bonds go bad," he says, "it
reflects poorly on everyone that's involved." There could be
pressure for a bailout.
Decades is promoted as an extraordinary opportunity for Arizona.
Legislators are being asked to give it an extraordinary
privilege. They need to give it extraordinary scrutiny first.
