AutoZone Encourages You to Share Its Commitment to the Future of AutoZone Park
The Memphis City Council will soon be making a decision on whether to purchase and operate AutoZone Park, the home of the Memphis Redbirds baseball team. AutoZone strongly believes that purchasing AutoZone Park and continuing the successful partnership already established with the St. Louis Cardinals baseball organization is vital for the continued growth and improvement of downtown Memphis.
We encourage you to read the below article written by AutoZone CEO and Chairman Bill Rhodes, which outlines the reasons why he feels the partnership between the City of Memphis and AutoZone Park is the right choice. We also encourage you to contact your City Council representative to encourage them to vote yes for the purchase of AutoZone Park, and to share the below article with friends and family so they may do the same.
AutoZone Park a Home Run for Memphis
It is often said that government should operate more like a business. The opportunity for city government to purchase AutoZone Park at a discount and partner with the St. Louis Cardinals is a business agreement that's nothing short of a home run for Memphians.
At a time when the city of Memphis is facing pension obligations and budget pressures, some understandably question how we can afford to buy a baseball park. To me, though, we are comparing apples and oranges. The proposed purchase of AutoZone Park is a one-time acquisition of a tremendous self-funding community asset, while pension obligations and budget pressures are recurring events that are many orders of magnitude greater.
I am bullish on this agreement for several reasons.
The AutoZone Park purchase, based on reasonable projections, pays for itself through two funding sources already dedicated to it - the rebate of sales taxes on all purchases in the ballpark and a payment-in-lieu-of-taxes payment for the Moore Building and Garage. But there will be an added source of revenues: The St. Louis Cardinals will pay yearly rent of $300,000 for the use of the ballpark by the Memphis Redbirds. These three sources provide a reasonable expectation that no funding from the city of Memphis will be required to support this acquisition. Is it an absolute guarantee? No. In this economic environment, nothing is an absolute. But if the revenue projections prove too conservative, the city of Memphis would have additional revenue; conversely, if the projections are too aggressive, the city would have to provide funding. In an effort to limit the city's risk, the St. Louis Cardinals has pledged to increase its rent to $400,000 a year if the projections fall short. Additionally, AutoZone has pledged up to $100,000 a year for the first 10 years (the balance of the naming rights agreement) if the revenue projections fall short. These backstops are added insurance for Memphians that the ballpark will pay for itself.
So on the surface, as a stand-alone business deal, it makes sense. And, to date, all of the discussions have revolved around the "funding sources," not the broader economic impact. In addition to having a solid business deal, the city would be securing the Memphis Redbirds for the foreseeable future and protecting $24 million annually in economic impact, according to the Sparks Bureau of Business and Economic Research at the University of Memphis. Isn't it worth taking some risk to protect $24 million in economic impact and a community gem?
In business, two factors that are keys to a smart business transaction are the partner and the price. These are two of the strongest points of the proposed agreement to keep Triple-A baseball alive and well in Memphis.
First, Memphis cannot have a better and more respected partner in professional sports than the St. Louis Cardinals. In major league baseball, the Cardinals are No. 2 in attendance, ahead of much larger markets. That is a testament to the team's marketing savvy and their special game-day experiences, which have been copied by many other professional sports teams.
Second, the price is right. The $19.5 million purchase price for AutoZone Park is less than its conservative $31.3 million appraisal, and significantly less than the $60 million-plus construction price. Other cities continue to copy what we have at AutoZone Park and they are building new ballparks for more than twice as much as the purchase price here. Those cities are making such investments because they understand the value of sports in improving the quality of life for their citizens, creating vibrancy and attracting visitors to spend money in restaurants, hotels and shops.
AutoZone Park was the first project that demonstrated to our community the power sports can have to improve our image and our economy. With the Memphis Grizzlies, our two pro sports teams now bring more than 1 million people Downtown every year. Remember the lack of vibrancy Downtown in the mid-'80s? Compare that to today!
What also excites me is the opportunity to expand our RBI youth baseball program and to support other programs that give young people the opportunity to learn the lessons of teamwork, discipline, aiming for excellence and good health. The Cardinals are well-known in St. Louis for their generous support of nonprofit organizations, and with their promise of support here, Memphis will have an inner-city youth baseball program with a yearly goal of $500,000. The Cardinals have agreed to contribute $100,000 annually to this program.
It is the commitment to Memphis by the St. Louis Cardinals that is one of the most positive aspects of its proposed partnership with the city of Memphis. The Cardinals will sign a long-term lease to guarantee that Triple-A baseball remains in Memphis for years to come, and the team is confident that it can increase attendance by improving the fan experiences. That too is added insurance for Memphis taxpayers, because the more people who attend games, the more revenue is generated to pay for the ballpark's purchase. All of us at AutoZone are proud to have made a corporate commitment to AutoZone Park with our naming rights, but first and foremost, we are citizens of this community. It is as a corporate citizen and a private citizen that I believe this agreement between the city of Memphis and St. Louis Cardinals is an opportunity that we cannot miss because the downside is simply too detrimental to our national reputation, our economy and our quality of life.
I commend the members of the City Council for their diligence and their vigilance, and I urge them to cast a confident vote to keep the Memphis Redbirds in our city and to partner with one of professional sports' best teams to manage AutoZone Park.
William C. Rhodes III is chairman, chief executive officer and president of AutoZone Inc.Read Bill Rhodes' Letter in the Commercial Appeal (subscription required)