Kathi Williams and Neil Macey have spent a good part of their lives working in real estate, but their biggest deal, the one they'll always be remembered for, still embarrasses them.
They built Coors Field.
Perhaps more than any other two people, Williams and Macey are responsible for bringing major-league baseball here and ensuring the construction of Denver's field of dreams. The two friends love having a team in Denver, but they can't forget the sequence of events that led to a shutout for taxpayers and a big win for the team's owners. They'll always remember just how easily public money and private profiteering can become entangled in the world of professional sports.
Williams, a former state representative from Westminster, carried the legislation in the Statehouse that allowed metro-Denver voters to approve a 0.1 percent sales tax to fund construction of the ballpark. Macey, a founding member of the Colorado Baseball Commission that lured a major-league team to Denver, worked hand in hand with Williams in writing the legislation, lobbying lawmakers and then promoting the sales tax to voters.
The two spent countless hours talking on radio shows and speaking to Rotary and Kiwanis clubs, pointing out the benefits a major-league team would bring to the Mile High City. They promised voters that a new, baseball-only stadium--which National League officials had demanded as a condition of Denver getting an expansion team--would be built with substantial private funding. They assured voters that everything from the sale of naming rights to leases on luxury suites would cover more than $46 million--or 30 percent--of the ballpark's total cost; those who stood to profit from the partially taxpayer-funded stadium would chip in their fair share.
Then the baseball stadium district board and the Colorado Rockies made them liars.
After the election in August 1990, before Denver even had a team, John McHale Jr., the chairman of the Denver Metropolitan Major League Baseball Stadium District board, struck a tentative deal with the ownership group of the aspiring franchise. The outline of a lease for the new stadium--which was negotiated in secret--called for the team to collect virtually all of the revenue from the new ballpark, leaving taxpayers to pick up almost the entire $215 million tab for the future Coors Field.
Today, with revenues of $1 million per game, the Rockies could be pulling as much as $30 million a year in profits out of their brick-lined ballpark, estimates Financial World magazine. The Rockies' stunning success at winning one of the most lucrative leases in major-league baseball caught the attention not only of baseball's other owners, but also of the Denver Broncos' Pat Bowlen. Casting a jealous eye toward Coors Field, Bowlen soon started insisting that the Broncos deserved every bit as lucrative a deal as the upstart Rockies.
"Coors Field is a beautiful place to see a game," Bowlen told Westword in 1995. "Football needs those kinds of venues to stay competitive. Five years ago, the fact I didn't get any revenues from concessions was no big deal. Now football needs those kinds of revenues to stay competitive."
Fast-forward to 1998. This November, there will be a measure on the ballot to extend the Coors Field tax--which will end in little more than two years--to pay for a new, $350 million football stadium. (The baseball tax was originally set to run through 2012, but Denver's booming economy brought in far more tax revenue than had been predicted.) Needless to say, that new football stadium would feature lavish luxury boxes for wealthy fans, club seating, restaurants, bars and retail shops. The Broncos hope to generate as much as $30 million per year in additional revenues from the taxpayer-funded stadium.
To get that, they need a lease not unlike the one the Rockies won in 1991.
More than just seven years separates these negotiations from the Coors Field deal, though.
For starters, the 1996 legislation that cleared the way for a ballot measure this fall specifies that voters must see a proposed lease for the new football stadium before the November election, not after.
And so the legislature also authorized a Denver Metropolitan Football Stadium District board, which, like the baseball stadium district board set up nine years ago, is supposed to represent taxpayers in negotiating a lease agreement with the sports team. But this time, there's a third player: the City of Denver. Before the football stadium district and the Broncos can sign off on an interim lease, the city must agree to release the Broncos from their lease at Mile High. Negotiations are now under way, with a goal of having a proposed lease in place by the end of the month.
While the baseball stadium board felt under pressure to help Denver win a team, the Broncos are already here. Although Bowlen has threatened to sell the team if the stadium election fails, the Broncos have a lease at Mile High that runs through 2018, and a new owner would still have to find a way to break that lease if he wanted to move the team out of town. And Denver is insisting that before the team is freed from the lease, the Broncos must agree to pay more than $20 million to cover bond payments the city has been making with seat-tax revenues from Mile High.
The three parties are now engaged in a high-stakes game of political maneuvering, with possible risks and rewards for each side. The city wants its money--but it wants the team, too. So does the stadium district board, which needs to craft a lease that will help convince voters that the Broncos need a new home. If the Broncos are perceived as demanding a lease that's outrageously unfair, it could cost them the election. After the Super Bowl win, polls showed a significant increase in public support for a new stadium, with a majority of potential voters saying they would approve the plan. But the team's private polling reportedly shows that large parts of the electorate still firmly oppose the proposed stadium, including anti-tax conservatives, liberal voters in Denver and Boulder counties, and women.
Since the Broncos make no secret of the fact that they want a new stadium to help fund multi-million-dollar player salaries, opponents are already painting the proposal as Robin Hood in reverse, taxing the public to make wealthy players (and a wealthy owner) even wealthier.
When the Coors Field lease was negotiated, Denverites were still starry-eyed at the prospect of winning a major-league baseball team, and few were willing to spoil the planned honeymoon by asking hard questions about public funds and private profits.
"In some respects, we're still a small town," says Williams. "We were naive."
In 1988, Neil Macey decided the time was right to bring major-league baseball to Denver.
Macey has been a real estate broker in Denver for years, specializing in downtown properties. In the 1980s he worked closely with John Dikeou, who then owned big chunks of downtown real estate, as well as Denver's only baseball team, the minor-league Denver Zephyrs (formerly the Denver Bears).
Dikeou told Macey he would be interested in helping to back a major-league team, one that would perhaps play in a stadium built on his land, and Macey started investigating what it would take to win one. Major League Baseball was talking about adding expansion teams, and although the National League had yet to make any commitment, the league made it clear that it preferred baseball-only facilities to a shared stadium like Mile High. Struck by the success of the 1988 sales-tax measure that created the Scientific and Cultural Facilities District, Macey began to wonder if a similar setup would work for baseball.
"The SCFD won with 75 percent of the vote, which was amazing," recalls Macey. "I said, if you can get 75 percent for that, you can get 51 percent for baseball."
Macey had been active in Republican party politics for some time, and he began talking with Republican legislators. While Denver mayor Federico Pena had set up a Denver baseball commission to try to lure a major-league team here, polls showed that Denver voters would turn down a proposal to build a baseball-only stadium. So Macey tried to find a suburban legislator who would work with him to create a six-county tax district.
"When Neil came to me, he had a concept of doing a district based on the SCFD," says Williams. "He'd already asked three Republican legislators to do this, and they'd turned him down flat."
Williams had never been to a major-league baseball game in her life, but she thought bringing a team to Denver would boost the spirits of the recession-wracked town. "We were in an economic funk," she remembers, "and we were looking for any kind of economic stimulus we could find."
Together, Williams and Macey wrote a plan calling for the creation of a six-county baseball stadium district to be supported by a 0.1 percent sales tax. The 1989 legislation specified that the newly created Colorado Baseball Commission would make the pitch to bring baseball to Denver, while the baseball stadium district board and employees would handle all the technical aspects of building a ballpark and watching out for taxpayers' interests.
"We wanted a totally clean group that could decide how the bonds would be sold and do the design without having a personal ax to grind or a bed to feather," says Williams.
Once Williams and Macey had won over the legislature, they set out to win over the voters. Macey's easygoing sense of humor appealed to audiences, and he was a good match for Williams, a down-to-earth Adams County Republican who made a dollars-and-cents argument for the benefits of bringing a team to Denver.
With an August 1990 vote looming, the first polls showed only 26 percent of the electorate would support the proposed baseball stadium district. So the pro-ballpark campaign began emphasizing community pride, and that proved to be a powerful force in a city just emerging from its worst economic downturn since the Great Depression. A $100,000 contribution from cable magnate Bill Daniels jump-started the campaign, which eventually assembled a $500,000 war chest.
In Denver in 1990, homes were still being sold at bargain-basement prices after being repossessed from their bankrupt owners, downtown skyscrapers were known as "see-through" buildings because they were half-empty, and lower downtown was a place suburbanites were afraid to go for fear they'd stumble over a bum passed out on the sidewalk.
The town had a major inferiority complex and was desperate for some sort of good news. By election day, 54 percent of the voters had decided to take a gamble that the possibility of getting a major-league team to Denver would be worth a sales-tax hike. (Even though Coors Field would become the quintessential urban ballpark, the tax was turned down in Denver; suburban voters provided the winning margin.)
While Denver's hard economic times helped to sway voters to baseball's side, they'd also created a psychology that made the city vulnerable to fast-talking hustlers who could promise better days ahead. Sure enough, a pair of them showed up soon after the vote, and they played off the city's low self-esteem to win themselves a financial grand slam.
Building a ballpark wasn't enough. To land a team, Denver had to assemble an ownership group with pockets deep enough to convince the National League that the owners could cover the substantial costs of launching an expansion team.
By now, John Dikeou's real estate empire had crashed; he no longer had the financial resources to bankroll a team. Spooked by the economic freefall of the 1980s, the people in Denver who still had money weren't offering to pick up the tab for a new team. Since money was tight, outsiders with cash were welcomed with open arms.
Enter Mickey Monus and John Antonucci, two wheeler-dealer Ohio millionaires who had been friends since childhood. When they showed up shortly after the election with seemingly enough money to single-handedly keep the prospective team afloat, Romer quickly designated them the team's primary owners.
With an ownership group in place, the wooing of the National League commenced in earnest. There was plenty of courting to be done, as Major League Baseball was skeptical that Denver had enough people to support a team. And even if it did, would football-loving Coloradans rally around baseball?
"Behind the scenes, the National League was telling us they had strong reservations about bringing a team here," says Tom Gleason, former deputy director of the baseball stadium district. "They thought there wasn't enough population here. They were very concerned that the ownership group have enough resources to support a team, especially in the early years."
Monus and Antonucci used the National League's hesitation as a bargaining chip in their lease negotiations with the baseball stadium district. Give us a great lease, they argued, and Denver will be more likely to win an expansion team.
And so in private, McHale sketched out a lease that would give almost all stadium revenues to the Rockies, saddling the taxpayers with virtually all the costs for the new stadium.
This was quite a change from McHale's promise to voters before the crucial August election. Nine days before the vote, McHale wrote in the Denver Post: "Our finance plan makes the stadium a true private/public partnership, with $42 million in revenue coming from the private sector and $97 million from sales tax revenue...Taxpayers are protected."
Within weeks of making these assurances, though, McHale was slurping down martinis and sharing cigars with the new, out-of-town owners of the future team. "They started kissing McHale's fanny right away," Williams says. "They started going to games together and having drinks with John. They knew John had a lot of power as chairman of the stadium authority."
Monus, whose Phar-Mor drugstore fortune made him the chief carpetbagger, was also wowing the locals in oil-bust-weary Denver, pulling up in a limo at society soirees and boasting of his numerous financial conquests. His partner, Antonucci, plunked down $2 million for a Cherry Hills home with an elevator and disco floor. Denverites hadn't seen such a display of cash-fueled chutzpah since dozens of Texas oil millionaires descended on the city like buzzards in the early 1980s.
Macey remembers Monus showing up at a cocktail party at the Women's Bank with a gun-slinging bodyguard in tow. The short and stocky Monus wowed the ladies with a silk shirt open at the chest to reveal three gold chains.
"When you talked to him," says Macey, "you knew he was a slimeball."
Monus would later be convicted of 109 felony counts and sentenced to nineteen years in prison as part of a $1.1 billion corporate fraud-and-embezzlement scheme that devastated his Phar-Mor drugstore chain. But by then, he'd already pulled a fast one at Coors Field, pushing through a lease that ensured the new ballpark would become a taxpayer-funded money machine for the Colorado Rockies.
By late 1990, negotiations were in high gear. On March 14, 1991, McHale signed a memorandum of understanding with the team for a lease at Coors Field. The owners showed off the agreement to National League officials just 48 hours later, when they flew into Denver to meet with the team's management. The sweetheart deal greatly impressed the league, which granted Denver a team in July of that year.
Williams believes Monus and Antonucci persuaded McHale that Denver would never get an expansion team without a lease that would assure a gusher of green. "I don't doubt that in John's mind, he thought they had to do this to get a team," she says. "I think Monus and Antonucci were crooks. They worked very hard to convince John they couldn't get backing for the team without a lease like that."
"They asked for the sun, moon and stars," she adds. "John decided they should only have the sun and the moon."
Besides the revenue from parking, advertising and concessions, McHale agreed to give the team the money from the sale of naming rights for the ballpark. The Coors Brewing Company had paid $15 million to slap its name on the stadium, money that voters had been told would be used to help fund construction of the ballpark. Instead, it went to the owners of the team, who apparently used it to pay part of the National League's $95 million expansion fee. And despite pre-election promises that no taxpayer funds would be used to build luxury boxes and club seating, McHale agreed to let sales-tax revenues be used to build those facilities.
By the fall of 1991, terms of the lease began to leak out. Upset that their original intent had been perverted, some state legislators made noises about replacing the stadium district board. To prevent that from happening, the Rockies hired an all-star lineup of lobbyists, who collected on favors owed from lawmakers on both sides of the aisle. "They hired every heavy-hitter lobbyist they could find," says Williams.
National League president Bill White got into the act and sent a letter threatening to cancel Denver's expansion team if the terms of the lease were changed. It was later revealed that the letter was written by Rockies officials, who faxed it to White for his signature.
The lease negotiated by the baseball stadium district board stood.
And chairman McHale's hard work was rewarded: In the summer of 1992, with opening day less than a year away, he was hired by the Colorado Rockies as executive vice president.
The man who had been appointed by Governor Romer to protect the taxpayers' interest in negotiations with the team's owners was now sitting behind a desk in the Rockies' front office.
Macey still seethes over what he sees as McHale's conflict of interest. "He was part of the Antonucci team, in effect," he says.
Sam Suplizio, who was a member of the baseball stadium district board and now sits on the football stadium district board, also regards McHale as a Benedict Arnold. "I thought John McHale was totally self-serving," says Suplizio. "He signed a lease with Monus and Antonucci and then immediately quit and took a job with them. I thought what McHale did was a terrible abuse of public trust. His job was to construct a ballpark and bring a team, not to have a hidden agenda to seek a job for himself. If he wanted a job in baseball, he should have gotten a job with a team and worked his way up, like everyone else does."
A lifelong baseball fan, McHale used the Rockies position as a stepping stone to his dream job: president of the Detroit Tigers, a position he holds today.
McHale did not return phone calls from Westword seeking comment, but when he was in Denver, he defended the Coors Field lease as a necessity to win a team. He also pointed out that the Rockies would be responsible for maintaining the new stadium, a cost that runs to several million dollars per year.
But just as McHale has his critics, he has his defenders. Denver wouldn't have a baseball team without McHale's persistence, they say, and the sweetheart-lease deal was simply the price of joining the major leagues.
"McHale had more knowledge about what it would take to get a baseball team in Denver than all the other people combined," says Steve Katich, who worked closely with former mayor Pena in an effort to bring baseball to Denver in the mid-1980s.
McHale's father had been a general manager of the Montreal Expos, and McHale had remarkable access to the owners and executives in the National League. Katich remembers a league meeting in Palm Springs where McHale asked his father to introduce Katich to baseball's movers and shakers. "He took us around to every owner of every team," recalls Katich. "It was the kind of thing where we went from knowing no one to having really solid relationships. McHale was quietly working behind the scenes to make this happen. He had more contacts with owners and team presidents than anybody else."
Katich believes the Coors Field lease that McHale negotiated was also what finally brought substantial local money into the Rockies' ownership group. "When local investors looked at this as something to invest in," he says, "the lease was a factor."
And locals were soon taking a good, hard look at the Rockies. In August 1992, Monus was forced to sell his share of the team after the embezzlement scandal broke. Antonucci exited shortly thereafter, and Jerry McMorris became the new team leader. The lease remained in place.
But in 1993, after the Rockies had taken to the field at Mile High and it was apparent the team would be a great success, the Rockies asked that Coors Field be expanded from 43,000 to 50,000 seats.
In exchange for the district adding the seats, the Rockies agreed to pick up about $30 million in costs for the larger ballpark; the team also said it would give the district a 20 percent share of parking revenues and a small cut of ticket sales. In addition, the Rockies would pay the district 25 cents per fan every time attendance went over 2.25 million, 50 cents per fan when it hit 2.5 million, and $1 per fan when turnout reached 3 million.
Stadium district officials say the revised lease is a much better deal for taxpayers, one that will result in as much as $32 million being returned to local governments over the 22-year lease.
McMorris is far more sensitive to community opinion than Monus and Antonucci were, says former stadium district deputy director Gleason, and as a result, he agreed to put more team money into the ballpark. "Once the old ownership faded away, it made it much easier," Gleason adds. "Jerry McMorris lives here and has a strong sensitivity to what the community needs and deserves."
But Williams and Macey aren't as impressed and say this new lease is little improvement over the old one. It's unlikely the record attendance the Rockies have enjoyed will continue for twenty years, they say, so it's doubtful that local governments will see much profit-sharing from the Rockies' field of green.
"Once the stadium debt was retired, we wanted any revenue from naming rights and other sources to go back to the counties that had paid the sales tax," says Williams. After all, back in 1990, voters had been told the Rockies would pick up 30 percent of the cost of the stadium, then estimated at about $139 million. After the stadium district board made several additions and added a brick facade, the final tab for Coors Field swelled to $215 million, with the Rockies picking up less than 14 percent of the ultimate cost.
Today the Rockies' owners are scoring big at the bank, if not during actual games. And the precedent-setting lease that made such profits possible continues to be the envy of baseball teams around the country, as well as a certain football team in Denver.
"This raised the bar," says Williams. "All of a sudden, everybody wanted a lease like the Rockies."
Will the Broncos' lease on their proposed stadium be a duplicate of the deal the Rockies originally got at Coors Field?
"I'll tell you, it won't happen again as long as I sit on that committee," says Suplizio, who is negotiating the lease with the Broncos as a representative of the football stadium district. "I favor fairness on behalf of the taxpayer. There will not be an agenda where the Broncos get everything, and nobody is going to use this to get a job with the Broncos."
Suplizio also vows that no promises made to taxpayers will be broken, as they were at Coors Field. By law, the Broncos must pay 25 percent of the total cost of the new stadium, currently estimated at $350 million. While the legislation also allows for $75 million in taxpayer-financed cost overruns, the Broncos are still committed to covering one-quarter of the final tab. "They'll be sharing 25 percent of whatever the final cost is," Suplizio says.
The city is also involved in the current negotiations. Before a new stadium can move forward, Denver will have to agree to release the Broncos from their lease at Mile High, which runs through 2018. Since the legislation allowing a November election on the stadium issue also requires that a tentative lease be ready before the vote, all three parties are under the gun to come up with an agreement by the end of the summer.
"We're making good progress, but it's a lot of stuff to get done in a constrained period of time," says Liz Orr, an aide to Mayor Wellington Webb who is representing the city in negotiations.
According to Orr, the biggest issue for Denver is what will happen to $27 million in debt the city has been paying off with revenues from Mile High. Those funds were used to make improvements at the Denver Performing Arts Complex and at Red Rocks, and the city has made it clear that the Broncos will have to cover those debt payments. "Not having major financial obligations left from Mile High is a big concern," says Orr.
According to sources within the team, the Broncos have countered that the city will save millions in Mile High maintenance expenses if a new stadium is built, and the team wants that sum deducted from Denver's estimate of what it will lose in Mile High seat-tax revenues. A 1995 report by the Lonco engineering firm estimated that it would cost the city more than $14 million to maintain Mile High through 2008. (There's reportedly been some discussion that if voters give the team a thumbs-down in November, the Broncos will go to court with the claim that Denver has violated the terms of the lease by not adequately maintaining Mile High--as shown by that Lonco report.)
Denver also wants to be sure the lease for the proposed stadium cannot be broken sometime in the future by an owner with wanderlust. The legislation authorizing the election specifies that the new lease must run at least twenty years, although Orr says the city would prefer a 25-year commitment from the Broncos.
"We want to make sure it's very difficult to try to break this lease," adds Orr.
It's already assumed that the Broncos will get the lion's share of revenue from parking, concessions, luxury boxes and advertising at the new stadium. Suplizio wants the team to agree to provide $2 million to $3 million per year from those sources to pay off the taxpayers' debt on the facility. After that, he'd like to see the money go back to the community.
"Something like that could be used, after the debt is paid, for high-school sports programs," says Suplizio, noting that the Broncos could generate $30 million or more a year in revenues from the stadium.
The Broncos aren't saying much about what they want to get out of those current negotiations. The team is being represented by Steve Farber, the politically well-connected Yber-mensch whose law firm, Brownstein Hyatt Farber & Strickland, lobbied the legislature hard on behalf of Pat Bowlen this spring. Farber also represented Ascent Entertainment Group in its negotiations with Denver over construction of the Pepsi Center.
Bowlen has freely admitted that the team's push for a new stadium is motivated largely by the multi-million-dollar salaries now commanded by football superstars. To pay those salaries, the Broncos say they need the cash that would come from a state-of-the-art stadium that includes lavish concessions, club seating and dozens of luxury boxes. "Our whole reason to do this is to get the stadium revenues," Broncos spokesman Porter Wharton told Westword earlier this year. "It's increasingly difficult for us to maintain a competitive franchise at Mile High."
One source who has been working with the team says the Broncos want to make sure they'll be in the same financial league as the Dallas Cowboys, who reap a startling $40 million per year from Texas Stadium. "What the Broncos want," he says, "is a lease that will put them in the upper tier and allow them to compete."
Williams and Macey are watching this fight from the sidelines. Williams is trying to win a seat again in the Statehouse, which she left in 1990, while Macey is focusing on his real estate business. Still avid scorekeepers of political games, they're predicting that the three-way negotiations now under way on a new Broncos lease will be difficult.
"It will be a really tough negotiation," says Macey. "Bowlen has to have enough on his plate to make it worthwhile. You may see all three groups at one time or other standing up and saying, 'We can't go any further.'"
As negotiations shift into high gear, the groups may form strategic alliances. "Any two parties could gang up on the other," Williams says.
And even after the Broncos have gotten their lease, they'll still have to win over voters. Williams thinks that will be a tougher job. For one thing, hardly anyone actively campaigned against the baseball proposal.
"We didn't have an organized opposition group," says Williams.
By contrast, the Broncos already have a vocal group of opponents: Citizens Opposing the Stadium Tax, or COST. While Broncos boosters may spend millions pushing the stadium proposal and will undoubtedly outspend opponents of the plan by as much as 100 to 1--their campaign committee raised more than $250,000 in June alone, including $100,000 from Bill Daniels--COST has managed to get its message out.
Bill Schley, president of COST, predicts the Broncos' new lease will pad the team's profits with public dollars. "When Mr. Bowlen's people negotiate the lease, they'll refer to other leases in the NFL," says Schley. "The last five NFL leases gave almost everything to the teams. Pat Bowlen looks at Dallas and says, 'Why should I give any parking revenues to the stadium district?' The taxpayers build the parking lots, and the team gets all the revenue--and it's called a public-private partnership."
The rhetoric will grow more harsh as the election nears. Whether the euphoria over Denver's Super Bowl win will carry over into the voting booth is anybody's guess, but Williams sees trouble ahead for the proposal.
"Baseball," she says, "was easy compared to what this will be."
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