(Source: ScottsdaleIndependent): Terrance Thornton – If you build it, they will come to WestWorld of Scottsdale AZ, tourism aficionados, public relations executives and elected leaders of Scottsdale opine.
Scottsdale City Council Tuesday, Oct. 10 approved $879,500 worth of tax dollars in three different formal resolutions to cover expansions and improvements event promoters at WestWorld say they can’t live without.
The funding measure passed 6 to 1 with only Scottsdale Councilwoman Linda Milhaven dissenting citing a lack of a fundamental explanation of the return on investment these improvements will bring to the city of Scottsdale.
The funds would primarily support two key events: Barrett-Jackson — The World’s Greatest Collector Car Auction and the Arabian Horse Show, both of which are held annually at the WestWorld facility and funnel millions of dollars into surrounding business that, in turn, provide both sales and bed tax remits to local coffers.
Barrett-Jackson’s case, the numbers are undeniable as its car auction sales have a direct impact on sales tax remits, officials say.
WestWorld is seeking to pave what officials and event promoters call “G Lot” at a total cost of $530,000. Barrett-Jackson is kicking in $200,000 to help shoulder the costs. Also, an additional $12,500 was allocated to provide for rubber material to be put atop “G Lot” when the Arabian Horse Show comes to town.
In addition, a $160,000 project focused on upgrades for an electrical component in “Lot H” is being pursued to accommodate additional tent space for consigned cars during the Barrett-Jackson auction while WestWorld officials are looking to expand the RV parking pedestals at a cost of $377,000.
“We directly supported 119 events last year spread over 52 weeks that yielded over 800,000 attendees through the gates,” said Brian Dygert, WestWorld general manager, during the Oct. 10 public hearing.
During his presentation Mr. Dygert explained a tint of consternation has swirled regarding the additional RV pedestal improvements.
“There is a point of interest here because there has been some conversation that WestWorld is competing with the hotels of the area — that is not true,” he explained. “We are not trying to go into the hotel business or any of the rest of that. The RVs are a specific component for most events they all come in their different forms whether it’s bike week or the horse show it’s a convenience factor. And, a lot of the RV users also get hotel rooms that is true the longer the event is.”
Mr. Dygert says adding more RV pedestals to WestWorld of Scottsdale will be like a rising tide for local hoteliers.
“We are not trying to compete with the hoteliers, we are actually trying to compliment them by being able to attract some bigger events that have large RV demands as well as support the growth of the existing events that we have,” he said of adding 128 portable RV pedestals.
Both Scottsdale City Council members Suzanne Klapp and Guy Phillips lauded the pending improvements at WestWorld.
“We have a lot of money invested in WestWorld,” Councilman Phillips pointed out prior to his affirmative vote.
“We are getting more and more events every year — this is actually a success motion in my view. I think this is an ongoing process and I think we have to do it and that is why I am in favor of it.”
Each funding measure was provided with a recommendation for approval from both the Tourism Development Commission and city council subcommittee focused on WestWorld operations of which both Mr. Phillips and Ms. Klapp are apart.
“I am in support. This was approved by the WestWorld subcommittee of which I am a member,” Councilwoman Klapp said.
The brass tax
Not everyone was elated with proposed WestWorld improvements — pending private investment or not.
“I am not going to support any of these three and I just want to explain why and it really relates more to process than it does to these specific projects,” Councilwoman Milhaven said alluding to the stark contrast to public opinion regarding public investment in WestWorld compared to the possibility of public investment in a desert-appreciation venue within the borders of the McDowell Sonoran Preserve.
“It seems to me, we have very sharp pencils and a lot of financial rigor in looking at the returns for our investments except when it comes to WestWorld — when it is a matter of faith that it is a good thing and that if you build it people will come.”
Councilwoman Milhaven says significant investment has already been made at WestWorld of Scottsdale.
“We already subsidize WestWorld from the General Fund and unless we can demonstrate our investment saves us money or makes us money, I am not comfortable investing more money in WestWorld — we need a master plan around WestWorld and we need to find out where we are going.”
Numbers show WestWorld of Scottsdale has for the last several years been operating at a deficit, according to records obtained by the Scottsdale Independent newspaper.
In fiscal year 2015-16 WestWorld recorded $4,422,499 in operating revenue but accumulated $6,202,145 in annual operating expenses during the same time period, which represents a $1,779,646 shortfall, a statement of operations shows.
Final expense numbers were not provided for fiscal year 2016-17, but data does show WestWorld of Scottsdale was provided a total General Fund budget of $6,921,135. Actual expenses reported for that time period were not provided.
However, this fiscal year, which started on July 1, 2017, WestWorld of Scottsdale has a total General Fund budget of $5,839,903 but is expected to be revised by fiscal year end to $7,209,427 once utilities costs have occurred.
Meanwhile, the city of Scottsdale continues to pay debt service on municipal property corporation bonds that total just over $54 million for the construction and expansion of WestWorld a handful of years ago. The total debt service payments are:
- FY 2013-14: $3,559,251;
- FY 2014-15: $3,794,278;
- FY 2015-16: $3,797,802.
- FY 2016-17: total debt service payment budgeted at $3,811,082.
- FY 2017-18: total debt service payment expected to be $3,793,591.
Craig Jackson, co-founder of the Barrett-Jackson car auction, agrees WestWorld needs a succinct economic development plan focused on the years to come — and the expenses those will ultimately carry.
“Ms. Milhaven, I would love to have a masterplan,” he said during the public hearing. “In the meantime, I have an auction coming up in a few months … my customers have been pretty vocal and that is why we put up our money to do it.”
Mr. Jackson also explained to city council members the days of the municipal tent being available — a place where millions of dollars of sales tax remits are generated — are numbered.
“We are trying to be proactive to work with the council, the city, to try and alleviate some of that sticker shock when that day does come — and be partners — and help work with you. That’s basically it, it is something that needs to happens and it needs to happen now.”
Mr. Dygert says the city tent is likely to be functional into spring 2018, which is based on council direction made in spring 2017 — and that has everyone’s attention.
“It is not just a simple issue to address,” said Scottsdale City Manger Jim Thompson regarding the overarching theme an economic development plan is needed at WestWorld.
“It is one that we are hopeful can come back and talk about the long range plan of WestWorld. I didn’t want to delay the improvements out there because they all fall into a category of a long-range plan. There is quite a bit of issues we would want to discuss.”