Scottsdale has inked a new deal to provide parking for the Phoenix Open that could generate millions of dollars for the city after years of little direct compensation from the wildly popular golf tournament.
City Council approved a deal with The Thunderbirds – the Valley fraternal organization that operates the golf tournament – to provide parking for fans, staff and volunteers at Westworld, Scottsdale Sports Complex and the new Bell Road Sports Complex.
The tournament has long used a mix of city properties and State Trust Land for parking but until now, the city received no direct payments in return, though the city does benefit from the increase in tax revenues connected to the influx of Open visitors.
Assistant City Manager Bill Murphy confirmed that the Thunderbirds have not paid the city in the past for use of parking space at Westworld and the Scottsdale Sports Complex, though the organization did contribute financially when the city built the $12.4-million complex back in the mid-2000s, he said.
Under the deal, the Thunderbirds will pay the city a $1 per paid attendee retroactively for this year. That rate will increase to $2 next year and $3 in 2025.
The PGA’s Phoenix Open tournament has been played at the city’s Tournament Players Club course since 1987 and has grown into the tour’s largest tournament, regularly attracting well over 500,000 fans each year.
In recent years the state has begun selling off that trust land – much of which sits in highly sought locations fronting Loop 101 – limiting the future parking options for the tournament and other major events.
At a meeting of Council’s Capital Improvement Plan Subcommittee in early 2019, City Manager Jim Thompson said the city “could find ourselves challenged” for parking in the near future.
At that meeting, the subcommittee was considering adding a $47-million sports fields project to a bond package scheduled to go before voters later that year. The fields would also double as parking for major events a few weeks each year.
Council initially balked at the cost of the project but ultimately approved adding a $40 million line item for sports fields and parking to the $319-million bond package approved by voters in 2019.
A portion of that $40-million was allocated for the 37-acre Bell Road Sports Complex at Bell Road and 94th Street, which will include up to 13 fields and can hold up to 3,000 to 3,500 cars during special events. The project is expected to be completed this January.
The city is considering building a similar facility east of Westworld with bond funds.
During the initial bond discussions in early 2019, Councilwoman Linda Milhaven questioned why the city would invest even more public money to provide free parking for successful private events like the Open.
“I don’t know that as a community we have a responsibility to create infinite parking to support the Open at the level that it is,” Milhaven said then.
She told the Progress that the new parking deal addresses her concerns.
General admission tickets at the Open have increased from $15 per day in 1987 to $75 next year, and the tournament now sells specialty memberships, cabanas and skybox packages that cost as much as $20,000.
“It was the middle of nowhere, especially when the golf tournament moved out there,” Milhaven said. “In the meantime, it was free parking. But the price of the tickets has skyrocketed over that length of time and the city deserves to make some money on it, so I’m glad to see we’ve got an agreement in place.”
It is unclear exactly how much money the city will make from the deal because its cut is based on attendance.
But if history is any indication, the city could net over $1 million per year starting in 2022.
This year’s cut, based on attendance at February’s pandemic-restricted tournament, will be significantly less.
Because of COVID-19, attendance was held to 5,000 people per day, meaning the city could net somewhere around $35,000. It is unclear how much of the attendance will be considered “paid attendees” under the contract.
But city revenues from the deal could jump to over $1 million next year when the city’s cut increases to $2 per paid attendee – if the tournament can return to pre-pandemic attendance levels. The Open has attracted as many as 700,000 fans in a single year.
Murphy declined to speculate on expected revenues, citing uncertainty about future attendance.
“We are optimistic that next year the Open event will be very successful but not sure on what the number of paid attendees might be at this time,” he said.
A spokesman for the Thunderbirds did not respond to a request to comment.
The money paid to Scottsdale will fund the city’s parking master plan at Westworld, maintenance of the parking areas and improvements, Murphy said.
That could include “repair expenses, utility cost throughout user areas, debt service requirements for the athletic fields at the Scottsdale Sports Complex, Bell Road Sports Complex and Westworld Sports Complex, and access areas within Westworld Facility,” he said.
The contract expires after the 2023 tournament but will automatically renew through 2025 unless either party opts out.
Murphy said he anticipates the the deal will be renewed, though the parking fee could change.
“We are hopeful that our partnership with the Thunderbirds will continue to grow and look for extension after this first three-year contract,” he said. “The rate might be adjusted since we will both have better idea on paid attendees moving forward.”
Murphy also confirmed that city is in negotiations with Barrett-Jackson on a similar contract for its car auction, which takes place at Westworld in January every year.