Part XV: Phoenix - the battle of evermore (UPD #443ff 14-Dec agenda/lease links)

[wpgallday1960]

And where is your calculation to pay the debt servicing on the 100 million dollar bond?

At a meager 5% thats 5 million per.

Correct - based on my calcs, debt repayment & 5% interest (over 30 years) exceeds parking revenue by $12.5M (30years X 5500 spots X 50 events X $20 per spot)

 

[jmichael7753*]

Or force the Coyotes to lower ticket prices even further to compensate...

actually the coyotes only lowered a small portion of ticket prices on the ends of the lower bowl they went from 60 down to 45, while the rest of the arena went up in price or stayed the same. The cheapest ticket last season was 15 dollars and this year it is 21. The entire upper concourse went up in price or stayed the same

 

[Fugu]

Noted this line on an Arizona Republic article...

"Counting the money now pledged to Hulsizer, Glendale's debt on sports-related venues with interest tops $1 billion."

In a city of 250,000. Ouch! That's $16,000 for a family of 4.

http://www.azcentral.com/sports/coy...0/20101210phoenix-coyotes-glendale-lease.html

Some claims:

The city plans to repay the debt by implementing arena-parking fees of $5 to $20 during hockey games, concerts and other events, as well as selling advertising and naming rights on the lots.

Naming rights for the lots next to Jobing.com arena. Interesting.

The city has done preliminary work to find investors to purchase $125 million in bonds to cover the up-front payment to Hulsizer. The bonds would likely be paid over 30 years, although the terms, including annual debt payment are not yet known. Another way of helping to pay that debt could be to form a special taxing district near the arena, although that is not outlined in the agreement.

There sure are a lot of unknowns. You structure a deal w/o knowing the annual debt payment? I thought the special taxing district was shot down earlier. I guess you can keep layering on costs and fees to pass on, but someone has to be willing to pay more.

A point not addressed in the lease is $25 million the city put up earlier this year to cover team losses and arena expenses. Glendale officials believe the NHL may allow the city to keep the $25 million, which has so far gone untapped.

Hmmm. A shell game? The NHL just passes that on to Hulsizer in the sale price, and Hulsizer passes that back to Glendale to put into the subsidy he's getting?

Glendale estimated losing the Coyotes could have a "devastating" economic impact to the area, which is also home to Westgate City Center and University of Phoenix Stadium. The city cited a 2008 economic study that said the Coyotes and the arena generated 750 jobs in Maricopa County, $20 million in annual wages and $4.5 million a year in indirect business taxes for Glendale, the county and state.
In addition, Glendale is in the running to host the NHL All Star Game in 2013 with an estimated $10 million to $30 million economic impact.

$4.5m that goes not just to Glendale, but the county and the state. That's not a huge amount of money, imo.

Anyone know if the $10-30m for an All Star game is realistic?

 

[aj8000]

Game on...

Not sure if if it is game on...

Just looking at the costs to see how badly the COG got suckered.

What will be will be

 

[Dado]

We simply have to look at the price paid for the parking lot and naming rates ($100 million) and whether the amount the City has agreed to pay is grossly disproportionate to what it will receive.

That's why we're doing 2-minute round-number analysis on this, to see if Glendale will have to use taxpayer funds to cover the short fall between what the parking spots can produce and what Glendale is paying for the privilege of charging for parking spots. It's plain as day that they will, by a large margin.

Whether there are legal ramifications to this - whether it fits a particular judge's definition of "grossly disproportionate" - no way to know unless it actually goes before a judge.

 

[goyotes]

For the life of me, I don't understand why the relocationist care what the COG is paying. Seriously. I live in the Valley, am a STH since 1997, and pay the taxes. If we as a "non-hockey" market are willing to step up and commit financially to keep the team, what do you care? It's not your MONEY.

Had your communities done so when offered the opportunity, we wouldn't even be talking about the Phoenix Coyotes.

 

[Fugu]

So they basically need ~$13M a year in revs from the place to break even. Dumping the Coyotes and associated costs and simply leasing the building out to a management company would seem to get them a lot closer to that breakeven point.

So with some of aj's calcs, and your figures.... why would Glendale think this is a better alternative?


The economic impact studies they cite cannot begin to make up for their costs.

Never mind opportunity cost. I wonder if they have any idea what that even means.

 

[cheswick]

http://www.foxsportsarizona.com/12/13/10....12&feedID =3702

Nealy in an open letter to ALL arizona hockey community to go out to Glendale to show support.

So yes they are asking for people from outside of Glendale to submerge there to back Glendale's use of Glendale's taxpayer money to keep the Coyotes. Nice and classy.

 

[Fugu]

For the life of me, I don't understand why the relocationist care what the COG is paying. Seriously. I live in the Valley, am a STH since 1997, and pay the taxes. If we as a "non-hockey" market are willing to step up and commit financially to keep the team, what do you care? It's not your MONEY.

Had your communities done so when offered the opportunity, we wouldn't even be talking about the Phoenix Coyotes.

Can we please stop with the "relocationist" schtick?

I care about --- that much --- where the teams are located. I think it's more in the NHL's interest to have a team in Phoenix than it is Glendale's, to be perfectly honest.


Many of us are just trying to figure out why a municipality would agree to this from a financial perspective. There MUST be some payback or return on that money. Are elected officials in the business of figuring out how to funnel public monies to private investors? (Answer: No, they aren't. So why would ANY govt agree to this type of deal?)

Heck, it's possible that Glendale really might make out better, but no one has come up with any figures yet that support that conclusion.

 

[cbcwpg]

actually the coyotes only lowered a small portion of ticket prices on the ends of the lower bowl they went from 60 down to 45, while the rest of the arena went up in price or stayed the same. The cheapest ticket last season was 15 dollars and this year it is 21. The entire upper concourse went up in price or stayed the same

So now add parking costs to that. Back to my question... will it cause an issue?

A $21 pair of STs = $1722 ( no taxes or fees )
add in $5 parking = $205 -- Basically your price went up 12%

There is a reason people buy STs or game tickets at $21 per game, and now potentially you will be adding $5 - $20 to that per game. IMO some people might chose to stay away or park somewhere else. Either way that parking revenue will be lost.

 

[kdb209]

http://www.foxsportsarizona.com/12/13/10....12&feedID =3702

Nealy in an open letter to ALL arizona hockey community to go out to Glendale to show support.

So yes they are asking for people from outside of Glendale to submerge there to back Glendale's use of Glendale's taxpayer money to keep the Coyotes. Nice and classy.

Bad link. Fixed link:

http://www.foxsportsarizona.com/12/...otes-/landing.html?blockID=372212&feedID=3702

To The Arizona Hockey Community:

<snip>
On Tuesday, December 14th the Glendale City Council will vote to approve the new lease.
On behalf of the Coyotes organization I implore you to show your support at this most critical juncture. Wear your jerseys and help the Coyotes win the biggest fight that we have faced. I’ve attached the location and time of Tuesday’s meeting below. This is your chance to once again display your Coyotes passion and ensure that NHL hockey stays in the Valley. This is YOUR team. Show the league along with 29 other NHL cities and Glendale City Council that Arizonians fight for what they believe in. This is your chance to be heard!

What: Glendale City Council Vote to Determine the Coyotes’ Future

Where: 5850 West Glendale Avenue, Glendale, AZ

When: Tuesday, December 14, at 7:00 p.m.

....

Mike Nealy
Chief Operating Officer
Phoenix Coyotes Hockey

 

[goyotes]

I think the City has a far better idea what loosing the Coyotes as an anchor tenant in Westgate means than anyone on this board operating with piecemeal information, and I think they have decided to eat a crap sandwitch because its is the best of several really bad choices. Moyes' decision to throw this into bankrutpcy, while his right, really left the City with no real good options.

What they have now is the hope this can work financially, rather than the certainty that the City will take an enormous loss if the anchor tenant leaves and all the minor tenants of Westgate soon bail on the leases.

 

[AllByDesign]

While I have always, and still find Casual Fan's legal input very helpful and enlightening, I find it difficult to believe that a lawyer could not file an injuction and have it stick long enough to present a case.

As mentioned before win or lose, if an injustion is achieved it will accomplish the same goal for this deal. You have a whole organization of lawyers who have had 4 days to examine the lease deal and come up with a case based on either the Arena Management portion, or the parking lot portion, or on both. GWI could ignore this, but have been very quiet in this regard. Somethings cooking... who knows if the souflee will rise.

 

[King Woodballs]

For the life of me, I don't understand why the relocationist care what the COG is paying. Seriously. I live in the Valley, am a STH since 1997, and pay the taxes. If we as a "non-hockey" market are willing to step up and commit financially to keep the team, what do you care? It's not your MONEY.

Had your communities done so when offered the opportunity, we wouldn't even be talking about the Phoenix Coyotes.

It is your democratic right to allow your governments to spend pubic money on private money losing companies.
You can choose to accept that and that is fine with me. In this case it isnt my money.

However if it was my government, I would be up in arms yelling and screaming at them.

 

[goyotes]

Can we please stop with the "relocationist" schtick?QUOTE]

It is not a "schtick" when you have over 20 reincarnations of this topic debating the relocation of the Coyotes for nearly two years. If the comment doesn't apply to you specifically, then don't feel the need to respond. It wasn't intended to be mean spirited, just point out the fact that the community has stepped up so let it go. But fundamentally, my comment was directed to those clearly in favor of relocating the Coyotes, and their opinion aside, when its not their money, they shouldn't really complain if a deal is done.

From a purely financial standpoint, I don't think anyone disagrees that the deal makes very little sense other than to avoid an even worse outcome if the team leaves.

 

[Jesus Christ Horburn]

I think if this deal goes through, it sets a huge precedent for struggling teams in all major franchises in the future.

IMO, the City of Glendale is essentially buying this team themselves. Hulsizer is just the face they're standing behind.

I'm guessing they've been planning this as a last resort for a while. I remember an interview a while back where they open talked about the possibility of the city buying the team themselves.

My guess is that before Hulsizer, they tried to make this arrangement with Reinsdorf, but Reinsdorf demanded a "relocation clause" after a certain number of years. Then they moved on to Ice Edge (which somewhat justifies why Ice Edge remained involved in this saga for over a year when they never had the money).

 

[pucka lucka]

It is not a "schtick" when you have over 20 reincarnations of this topic debating the relocation of the Coyotes for nearly two years. If the comment doesn't apply to you specifically, then don't feel the need to respond. It wasn't intended to be mean spirited, just point out the fact that the community has stepped up so let it go. But fundamentally, my comment was directed to those clearly in favor of relocating the Coyotes, and their opinion aside, when its not their money, they shouldn't really complain if a deal is done.

From a purely financial standpoint, I don't think anyone disagrees that the deal makes very little sense other than to avoid an even worse outcome if the team leaves.

Look, this is a BUSINESS forum. We talk about BUSINESS. If you don't want to talk about BUSINESS, there are plenty of fan forums here. You are quite free not to participate. This discussion isn't a team sport.

 

[AllByDesign]

But fundamentally, my comment was directed to those clearly in favor of relocating the Coyotes, and their opinion aside, when its not their money, they shouldn't really complain if a deal is done.

From a purely financial standpoint, I don't think anyone disagrees that the deal makes very little sense other than to avoid an even worse outcome if the team leaves.

My friend, this is the business portion of HF boards. Questioning the numbers and evaluating the merit of the business side of hockey is why we frequent here. First of all the deal isn't done yet. Ink not dry on any deals. GWI has not made its intentions heard. It may very well pass on like a perfectly smelling rose. If you had spent any real time in this discussion you would note that absolutely nothing has been that easy in this topic.

This thread is not for the thin of skin. There is a mish-mash of logic, legalese, math and emotion. Frick if it weren't for the math part I'd have this place licked.

 

[goyotes]

It is your democratic right to allow your governments to spend pubic money on private money losing companies.
You can choose to accept that and that is fine with me. In this case it isnt my money.

However if it was my government, I would be up in arms yelling and screaming at them.

Which is one reason why losing teams leave markets. I will take you at your word regarding what your response would be if the Winnipeg City Fathers were given the choice back in 95, but it will be interesting to see what Winnipeg and Quebec City are willing to do now in order to get an NHL team. Will public money eventually be spent in either city as part of an arena deal? Maybe...maybe not.

However, I believe once a community crosses that line, as the COG did by building the team an arena, then they are in for a penny, in for a pound.

 

[TheWestWing]

All I can is that if I had known that I coulda paid Biteman $170M and COG would give me $197M, I woulda bought the team as an Xmas present.

 

[Dado]

So with some of aj's calcs, and your figures.... why would Glendale think this is a better alternative?

IMO because they're politicians whose goals are different from someone running an actual business and needing to rely on some measure of fiscal responsibility. By their political calculus it's better to take a deal like this than face the consequences.

(That's not a slam, the world is what it is, to some degree or other we all live in such jurisdictions)

Alternately, this is a diabolically clever plot to such the NHL into a longer tenure as owner...

 

[mouser]

50 events. Not 50 NHL games. All Arena Events. Like I said, you might be focused on all the wrong things.

Those lots are right next to University of Phoenix stadium also, which is good each year for 10 NFL games, the Fiesta Bowl, and 2-4 miscellaneous sellout level events [e.g. Wrestlemania and U2 in 2010] that should consume all parking.

In addition there are a few misc Westgate non-Arena events that get most of the parking like the annual pro beach vball tour.

 

[Dado]

actually the coyotes only lowered a small portion of ticket prices...

That was a reference to the Coyotes already absurdly low gate revenue relative to the rest of the league, not to a comparison between last season's low prices and this season's low prices.

 

[King Woodballs]

Which is one reason why losing teams leave markets. I will take you at your word regarding what your response would be if the Winnipeg City Fathers were given the choice back in 95, but it will be interesting to see what Winnipeg and Quebec City are willing to do now in order to get an NHL team. Will public money eventually be spent in either city as part of an arena deal? Maybe...maybe not.

However, I believe once a community crosses that line, as the COG did by building the team an arena, then they are in for a penny, in for a pound.

Well... the local governments are talking about paying for the new football stadium.... and i am not impressed one ****ing bit about it...

as for an arena deal in Winnipeg the guys owning the team would be the ones that outright own the arena so it is a different situation...

but if our government here was to give out a deal like this I would be super pissed... they are always *****ing and whining here about a major infrastructure deficit... so giving out something like this would be asinine.

 

[goyotes]

My friend, this is the business portion of HF boards. Questioning the numbers and evaluating the merit of the business side of hockey is why we frequent here. First of all the deal isn't done yet. Ink not dry on any deals. GWI has not made its intentions heard. It may very well pass on like a perfectly smelling rose. If you had spent any real time in this discussion you would note that absolutely nothing has been that easy in this topic.

This thread is not for the thin of skin. There is a mish-mash of logic, legalese, math and emotion. Frick if it weren't for the math part I'd have this place licked.

I've read your posts. It's all about business for you...rigghhhhtttt. I don't take issue with your opinion that the Coyotes might be better off someplace else, or that the league may be better off with the Coyotes relocating. Your opinion doesn't bother me. I've lived this Coyote situation since 1997. It is a less than ideal situation no matter your opinion about the market. What I am saying is to argue that the COG was wrong for doing this deal, or the deal shouldn't stand up, is not something an outsider should really have a say in. You have no "dog in that hunt". If the community decides to do this, its their decision. Simply point really. Didn't think it would be that controversial. Doesn't mean this is a "good" market. It just means it stays an NHL market because it did what it had to do for that to be the case.