Part VI Phoenix Coyotes post bankruptcy

[peter sullivan]

WEll, Peter, it is nothing like a land exchange.

You could look at it this way. THe ability to spend the money to build a parking garage by the arena is intended to develop and enhance the viabiltiy of the arena, which is city-woned infrastructure. That enhancement, though, would be of little use without a lead tenant. The existence of a long-term lead tenant is also an enhancement to that infrastructure. Accordingly, the CoG is, given the exigent circumstances, electing to use the money towards a different enhancement to the same facility.

I usually just hate using everyday examples to explain business transactions, but consider it this way, perhaps. You have been given $25,000 to build a swimming pool for your house. However, before you spend that money, you discover that your house has developed some structural defects that are going to result in your house collapsing in a pile of bricks and wood splinters. Keeping that money to build the pool would sure be nice, but it would be pretty pointless to have a swimming pool on a lot where no one lives because the house fell down in a heap. So, you spend the $25,000 to fix the structural defects.

not quite...its more like you had been given $25000 to build a pool and you end up paying your gambling debts with it using the logic that if you didnt do that there would be nobody left to pay the rest of the mortgage.

this money doesnt provide a long term tenant....it provides a tenant for 1 year.

i understand your point, but i find that transition in logic to be problematic....i dont buy that paying the operating losses of a private company can be considered an infrastructure enhancement....there are lots of uses for that arena that dont involve public handouts.

i dont see how it is not a land exchange....in the end the money came from a real estate asset and is being used to finance a private company...it was illegal to use taxpayer money so they think they can get around it by using this money....they obviously feel that the source is the critical difference....what was the source?....the property asset owned by the taxpayers.

the crux of the argument is that they have to present the case that paying the losses for a private company is an infrastructure enhancement or else they face the gift clause issue....or maybe they think this money is exempt from that for some reason?

if they are successful making that argument then why could they not have just used tax money because it is not illegal to spend money on infrastructure.

 

[Killion]

i'm saying this is not getting any "play" in Arizona, much like everything to do in Arizona with the Coyotes - it is not a "big" story, there is no public outcry one way or the other ( stay- go- meh) , it seems as if it's an inconvenience to all but the couple of thousand die hard Coyote fans. Not front page news- nobody cares ( and that is the problem)

Ah, I see. And ya, coverage of this is almost non-existent; coverage of the Coyotes' in general's always been lousy with traditional media in Arizona, something the team has been bemoaning for years.

 

[Hawker14]

Grasping at straws to fund this disaster.

By the way, who's gonna buy the team ? The two groups that haven't been able to close the transaction after a year ?

What an embarrassmemt and a disgrace for the diehard fans of the yotes

 

[DeathToAllButMetal]

That enhancement, though, would be of little use without a lead tenant. The existence of a long-term lead tenant is also an enhancement to that infrastructure.

That's one hell of a stretch. Who says? Where is the proof that the Coyotes staying would benefit the arena, and the bottom line of Glendale? How do you get from parking garage to funding losses of a hockey team? Based on 15 years of the franchise gushing money into the sand, I look at this sort of "investment in infrastructure" and I see "money pit."

At any rate, if/when this goes to court, the judge has a lot of questions to ask. Here's one for you, GSC -- What is the benefit to having a lead tenant that loses money every year, and cannot be sold to a local buyer without the city guaranteeing massive subsidies, a la Reinsdorf? Why not cut bait, get rid of the NHL albatross and try something different, after seven years of failure in Glendale with the Coyotes? Or just shuttering the arena entirely? That would seem like like of a money loser than paying Reinsdorf and the NHL to run an NHL hockey team out of the place.

 

[DeathToAllButMetal]

Ah, I see. And ya, coverage of this is almost non-existent; coverage of the Coyotes' in general's always been lousy with traditional media in Arizona, something the team has been bemoaning for years.

Coverage is lousy because the people in AZ *don't care.* If the people wanted Coyotes coverage, media would give it to them to boost ratings and ad rates. Yet another one of the long lists of nonsense excuses for the Disaster in the Desert.

 

[peter sullivan]

It seems that by using the parkade money they have two routes to avoid the gift clause. Prove that it isn't taxpayer money or GSC's argument that bailing out the team is an infrastructre improvement.

To prove that it's not taxpayer money the source of that revenue becomes very important. Money doesn't just appear magically. It was not a charitable donation. It came from the sale of a public asset so I fail to see how it is not considered public money.

If they are going to make the argument that the team is an infrastructure asset. Or at least critical to the operation of a piece of infrastructure then why are they going to all the trouble of using this money in escrow? If that argument can fly then tax dollars could have been used.

I guess I dont fully understand their approach yet. I wonder I'd they do. Maybe it's a case of making it so convoluted that challengers might get lost.

 

[Bryan574]

Coverage is lousy because the people in AZ *don't care.* If the people wanted Coyotes coverage, media would give it to them to boost ratings and ad rates. Yet another one of the long lists of nonsense excuses for the Disaster in the Desert.

If I remember correctly, when the Grizzlies were basically on the brink of leaving Vancouver they had far more coverage from the likes of tsn and others as the whole country was following it and they were a far worse product then the Yotes have ever been . It seems the only coverage this is getting is from canadian Hockey fan Brahm Resnik's twitter page and Shoalts in Canada.

 

[TheLegend]

Coverage is lousy because the people in AZ *don't care.* If the people wanted Coyotes coverage, media would give it to them to boost ratings and ad rates. Yet another one of the long lists of nonsense excuses for the Disaster in the Desert.

The media in PHX is like that because the media *presumes* things just like you're doing.

 

[pucka lucka]

The media in PHX is like that because the media *presumes* things just like you're doing.

Yes, that's exactly it, the media doesn't know anything about media.

 

[Dado]

Yes, that's exactly it, the media doesn't know anything about media.

That's right!

There are actually millions of hockey fans in Phoenix, but The Media feels it already makes enough money, so it's deliberately ignoring them.

 

[GSC2k2*]

That's one hell of a stretch. Who says? Where is the proof that the Coyotes staying would benefit the arena, and the bottom line of Glendale? How do you get from parking garage to funding losses of a hockey team? Based on 15 years of the franchise gushing money into the sand, I look at this sort of "investment in infrastructure" and I see "money pit."

At any rate, if/when this goes to court, the judge has a lot of questions to ask. Here's one for you, GSC -- What is the benefit to having a lead tenant that loses money every year, and cannot be sold to a local buyer without the city guaranteeing massive subsidies, a la Reinsdorf? Why not cut bait, get rid of the NHL albatross and try something different, after seven years of failure in Glendale with the Coyotes? Or just shuttering the arena entirely? That would seem like like of a money loser than paying Reinsdorf and the NHL to run an NHL hockey team out of the place.

Where is the proof? See the following for starters:

1. the terms of the existing AMULA;

2. the previous financial statements of the Phoenix Coyotes.

Please read those source documents and read some things regarding the $150M or so in outstanding indebtedness in respect of the contrauction of the arena. THere is a lot of information out there regarding revenue streams of the AMULA, arena losses, etc.

I would also direct you to some of the affidavits filed in the Coyotes bankruptcy which address some of the benefits of keeping the Coyotes in PHO.

Look. The fact of the matter is that you are perceiving this situation not with the idea of chewing over the numbers and engaging in legitimate back-and-forth or considered analysis. You have simply determined that this is all stupid, and that there is no hope of success for the NHL in PHO - no hope of the NHL copying its success in DAL, SJ, ANA, etc. With that mindset (that the franchise can never succeed), no deal is sensible. Number crunching, analysis, discussion of whether assumptions that one might hold are justified, and all of the other things that I am interested in discussing don't matter in that context.

Given that to be your mindset, what is the point of engaging with you?

I guess we will all see what happens. Take care.

 

[peter sullivan]

the lack of media attention is amazing....its because people dont really care all that much about hockey in phoenix and they care even less about winnipeg in general....when balsille was trying to move them to hamilton it was top story news for months...every little detail was being disected....now, every three weeks half way through sports centre TSN runs a 5 second clip of an empty arena with a voice over saying that the coyotes have been saved again.

even in winnipeg the local media has been so terrified to say anything wrong that until recently have simply taken the true north press releases as gospel....there has been no level of investigative journalism whatsoever....they would know more if they simply read this thread.

if true north is able to take the team and run it 16 weeks from now, think how much work has been going on behind the scenes....they are a long way down the line and the press had no interest in exposing all the rumours all this time...there are so many people in winnipeg that have known about this for so long yet it was never uncovered....they didnt just decide to make an offer for the team yesterday.

a couple of months ago the director of winnipeg's downtown development corporation said in the paper that there has been an option taken out on all the land across from the MTS centre to build a parkade, hotel and entertainment facilities....he said they would know if it would happen by june 30th.....that date meant nothing to anybody so nobody bothered to call and find out that it was chipman's real estate company....how hard was that to connect those dots...but the media was completely oblivious.

 

[Hawker14]

If $25 million for one year is proper legal consideration, then the City of Glendale should be able to legally offer $600 million ($25mx24) for a 24 year lease.

Correct ?

 

[Killion]

This probably A: old news or B: already been covered and I've missed it in this thread. I didn't know about this Dec 31 deadline, and I found this.

I think a link for that story was provided here yesterday. If you cruise back about 100 posts, you'll find the link to the Globes story with PDF's of the actual (unsigned ) agreement. Nothing wrong with Yahoo's links Tinalera.

 

[MaskedSonja]

I think a link for that story was provided here yesterday. If you cruise back about 100 posts, you'll find the link to the Globes story with PDF's of the actual (unsigned ) agreement. Nothing wrong with Yahoo's links Tinalera.

Thanks Killion, I'll dig that up-unsigned even eh? BONUS!

 

[LadyStanley]

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