PHOENIX — Arizona’s universities could upgrade their football stadiums and other athletic facilities using money from new local businesses, under a proposal moving through the state Legislature.

The legislation is aimed mainly at Arizona State University’s Sun Devil Stadium. But the proposal could also raise cash for sports buildings at the University of Arizona and Northern Arizona University.

The heart of the proposal, sponsored by Rep. Warde Nichols, a Gilbert Republican, would let universities charge a fee on new businesses in a special district within the boundaries of each university.

The county Board of Supervisors would set up the districts upon an agreement with the Arizona Board of Regents. This step is required under existing statutes that govern stadium districts in Arizona.

Each university could then sell bonds to use for the construction or reconstruction of athletic facilities. The universities would set the fee, which could not exceed the cost of local property taxes.

Some lawmakers have expressed concern that that counties will lose money because businesses will choose to build within the university district to take advantage of a fee that’s lower than local property taxes.

But since businesses on state land don't pay a property tax now, Nichols said his bill would actually put businesses in the area on more equal footing.

The Tucson Metropolitan Chamber of Commerce supports the bill because it could help all three state universities, said Paul Parisi, its vice president for governmental affairs.

Universities, and their stadiums, help drive local economic development, Parisi said, and the potential fee would be both small and targeted.

"It seems reasonable because the money is being used for specific projects," Parisi said.

The proposal would be a boon for ASU. The university needs $170 million just to keep Sun Devil Stadium functioning, said Steve Nielsen, ASU’s assistant vice president of university real estate development.

But the UA might not gain much even if lawmakers approve it.

While the UA supports the bill, it just doesn’t have enough businesses on campus to raise the kind of money needed for major projects, said Greg Fahey, the university’s associate vice president for government relations.

“Maybe in the future we could make use of it,” Fahey said.

Nichols said this idea would help the universities fund projects they’ve said they need. But he acknowledged uncertainty about how much money the districts would raise for each school. 
“There is a certain aspect of guessing,” Nichols said, adding that potential funds would hinge on the number of new businesses.

When the proposal was introduced last year, the Joint Legislative Budget Committee, which analyzes bills, estimated the maximum amount universities could make from the fee. According to a legislative summary of the bill, the JLBC found that ASU could generate $136,500 annually through its district. The UA, according to the analysis, could raise $94,600 each year.

The JLBC estimated that ASU would need to raise $13 million per year to cover the cost of borrowing for its stadium project.

The bill’s vagueness was one of the concerns raised by Rep. Andy Biggs, a Gilbert Republican, who voted against it in the House Ways and Means Committee last month.

“I’m just trying to get you to admit there’s very little limitation,” Biggs told Nichols during the committee hearing.

Nichols said the reason for the lack of restraints is that the universities know what they need. 
Despite some concerns, the bill is poised for a House vote once it clears the Senate, although Nichols is expecting a battle there.

Meanwhile, the UA already has an almost $400 million blueprint to fix athletic facilities, Fahey said.

The Board of Regents has approved a project with an estimated cost of about $90 million for Arizona Stadium, according to Steve Kozachik, the UA’s associate director of athletics, facilities and capital projects. Kozachik is also a member of the Tucson City Council.

The project will enclose the north end zone of the football stadium and allow for other enhancements, including upgrades to some seating areas. It is the first step in a long-term plan to fix athletic facilities, which includes renovations at McKale Center.

Kozachik said the UA is raising money for the stadium improvements, but it will have to come from donors to the athletic department, since the projects won’t get any state dollars.

And if Nichols’ proposal passes, the UA will take advantage of it, Kozachik said.

“It would just be free money,” he said.

NAU is supportive of the bill, according to Christy Farley, the school’s associate vice president for governmental affairs and business partnerships. She said NAU doesn’t plan to use a stadium district immediately, mostly because NAU does not have enough development nearby to make it beneficial.

That’s not to say NAU does not want upgrades.

Although NAU Athletics does not technically own athletic facilities—they are tenants in certain facilities on campus—they could use improvements, athletic director Jim Fallis said.

The legislation is H.B. 2035.

Alec Nielson is the Bolles Fellow for the University of Arizona's School of Journalism.