Part XVII: Phoenix -- This Thread Title Available For Lease

[MaskedSonja]

The part that I don't get is 32 major events at $20/spot is $3.2M. With no additional debt to service. Makes more sense to go this route.

I'm confused, how would the 3.2 Mil not go to servicing the interest on the anticipated Bond that to be issued?

 

[Whileee]

I did the math (I think) and 73 events (41 games plus 32 major events), and put at 20.00 a pop:

1,460 per spot, 5000 parking spaces, that's an income of about 7 mil a year-that's at 20 dollars a shot.


Would 7 mil/ year even cover the debt/bond interest?

The point of the analysis is that the revenue from the parking over the next 30 years, making all of the assumptions in the analysis, will total about $250 million, which has a present day value of $109 million (assuming 6% discounting). I think it is fair to say that based on this analysis, I think it would be near impossible to "sell" the parking rights for $100 million because the buyer would be taking the huge risk with the assumptions, which even if they hold true, would only have the buyer breaking even. The reality is that the $100 million could be put to much more valuable use. Beyond that, I don't see the argument that Glendale is in the position of having to purchase these parking rights to ALL arena events from Hulsizer.

 

[Evil Doctor]

http://www.thestar.com/sports/hocke...9--cox-there-is-no-veto-bettman-says-to-leafs

"There is no veto," Bettman said after an uneventful two-day board of governors meeting wrapped up. "There are two votes that, from a constitutional and bylaw standpoint, would be important. The relocation of a franchise requires a majority vote. Period. End of story. No veto. The granting of an expansion team, because that's also a new owner and a new team, requires a three-quarter vote. No vetoes. I understand that there's ongoing confusion about that point but there shouldn't be."

Sounds like no veto.

I think it was during the Coyotes Bk hearing that he stated there was no veto for relocation but there was one for expansion. The reason there is ongoing confusion GARY is that YOU keep saying something different everytime!

I'm getting OT here... but I heard Bettman say on CBC recently that maybe Hamilton isn't the best SO city for an NHL franchise..maybe it's London. Yes, Sir Gary Bettman actually said London! That would eliminate the $150M indemnity fees for Toronto & Buffalo, and London is too far from Detroit for indemnity. That makes it an interesting option for the NHL.. the local metro size is only 490,000, but having Kitchener and Hamilton metros a reasonable drive away pushes the market size to well over 1.6 million.

Hardly a reasonable drive from Kitchener. I had a few days on the TV series MVP when it was filmed in London a couple of years ago, and had to commute from Cambridge to London. No traffic, but it was a loooooong drive. Honestly, you can't hang your hat on anything Bettman says...

 

[OthmarAmmann]

If you read page 69 of the Walker parking report there estimated revenue from parking is 2.1 million in year one and 3.1 million in year 5. that would not even be enough to pay the interest on the bond @ 6%.

I am going to read the other report to see what we get.

Hocking appears to be much more optimistic and figures that the net revenue from the parking per year would be 6.5 million. enough to cover the interest @6% but not enough o pay off the bond.

However, the hocking report does not seem as detailed as the walker, so I think the walker report may be much closer to the truth.

Walker is dated Nov 2, 2010. Hocking is dated Nov 22, 2010.

 

[Kismet]

Page 53 of the Walker report says, "...the Arena had its best year (in terms of total attendance) in 2005 at roughly 1.15 million attendees and 95 events."

If the year (or at least a part of the year) of the strike provides the best ever attendance, how can they reasonably argue that this NHL team is such a critical tenant?

 

[Whileee]

I'm confused, how would the 3.2 Mil not go to servicing the interest on the anticipated Bond that to be issued?

Another overall point from the analysis is that without the Coyotes they calculate that parking revenues would total about $126 million over the next 30 years, or an average of about $4.2 million per year. There will also be a total of about 615,000 patrons attending events at the Jobing.com arena. Sounds almost like an okay "Plan B", if you ask me.

 

[OthmarAmmann]

The point of the analysis is that the revenue from the parking over the next 30 years, making all of the assumptions in the analysis, will total about $250 million, which has a present day value of $109 million (assuming 6% discounting). I think it is fair to say that based on this analysis, I think it would be near impossible to "sell" the parking rights for $100 million because the buyer would be taking the huge risk with the assumptions, which even if they hold true, would only have the buyer breaking even. The reality is that the $100 million could be put to much more valuable use. Beyond that, I don't see the argument that Glendale is in the position of having to purchase these parking rights to ALL arena events from Hulsizer.

It might give pause to somebody who was going to hand over $100 million to finance the sale.

Then again, the bonds are secured by excise taxes.

 

[MaskedSonja]

The point of the analysis is that the revenue from the parking over the next 30 years, making all of the assumptions in the analysis, will total about $250 million, which has a present day value of $109 million (assuming 6% discounting). I think it is fair to say that based on this analysis, I think it would be near impossible to "sell" the parking rights for $100 million because the buyer would be taking the huge risk with the assumptions, which even if they hold true, would only have the buyer breaking even. The reality is that the $100 million could be put to much more valuable use. Beyond that, I don't see the argument that Glendale is in the position of having to purchase these parking rights to ALL arena events from Hulsizer.

I agree with what you're saying. I guess I was thinking that, even if the 32 "non hockey" events weren't charged, the amount they get from the non events, they would put towards the interest anyway to try and pay it down bond servicing.

And you speak what I think-under best circumstances, you're paying 100 million to "break even" as it were. But, maybe CoG now is just "pay it, and hope he buys the arena".

But I think we've already concluded that CoG is in a desperate state, and is willing to make this deal to avoid potential (at least immedate) armageddon.

 

[MaskedSonja]

Another overall point from the analysis is that without the Coyotes they calculate that parking revenues would total about $126 million over the next 30 years, or an average of about $4.2 million per year. There will also be a total of about 615,000 patrons attending events at the Jobing.com arena. Sounds almost like an okay "Plan B", if you ask me.

Yea.....sounds okay....all's good here!

Thank you Whileee for breaking into layman's terms for me, the whole legalese, well heck I trouble speaking English these days, nevermind a variation thereof

 

[OthmarAmmann]

Page 53 of the Walker report says, "...the Arena had its best year (in terms of total attendance) in 2005 at roughly 1.15 million attendees and 95 events."

If the year (or at least a part of the year) of the strike provides the best ever attendance, how can they reasonably argue that this NHL team is such a critical tenant?

Whoops.

 

[MaskedSonja]

Whoops.

Didn't the arena OPEN in 2005?

So, if your your BEST year (your opening year), was during a lockout, without an NHL team....


and now you're averaging around 95 to 100 events (I believe) INCLUDING an NHL team....where did the 40 some odd events go?

 

[OthmarAmmann]

They had 95 events during the lockout?

How many events have they averaged after the lockout? I mean, otherwise, the arena these past few years have had 126 events a year, 1/3 filled with events! Yet everything I've read is that they seem to average 95 events WITH an NHL team-what am I missing here?

The number of non-hockey events have declined. Of course, a lot of that probably has to do with the economy, but the economy was still very strong in 2006 and 2007.

 

[OthmarAmmann]

Didn't the arena OPEN in 2005?

2003

 

[cbcwpg]

Page 53 of the Walker report says, "...the Arena had its best year (in terms of total attendance) in 2005 at roughly 1.15 million attendees and 95 events."

If the year (or at least a part of the year) of the strike provides the best ever attendance, how can they reasonably argue that this NHL team is such a critical tenant?

Your not suggesting the CoG is lying about the Coyotes being critical are you?

 

[MaskedSonja]

2003

I was ABOUT to correct that-you beat me to the punch!

 

[Whileee]

See the TL Hawking analysis on the Goldwater website:

http://www.goldwaterinstitute.org/file/5526/download/5528

Assumption is $12 to park at a Coyotes game in the first year, increasing by 2.5% per year. 32 "major" concerts/events at an average price to park of $17.50 per event.


edit: There's also another 80 page parking analysis

http://www.goldwaterinstitute.org/file/5528/download/5530

Another problem with the analysis is that they appear to assume too high a number of parking spots. The lease agreement specifies that the City is purchasing the rights to "not less than 5500 parking spaces", of which 500 will be designated for the Team parking. That leaves 5000 parking spots to generate revenue for the City of Glendale. However, their calculations seem to be based on the assumption that revenue will be generated from 6000 cars per Coyotes game (15,000 fans divided by fans per car). If the actual number of spots is 5000 then they have overestimated revenue potential for parking from the Coyotes games by about 20%.

Someone more familiar with the parking space situation and agreement could perhaps comment.

 

[Kismet]

Your not suggesting the CoG is lying about the Coyotes being critical are you?

Me? Heaven's no. I would never suggest such a thing. Lying is such a strong word.

 

[MAROONSRoad]

See the TL Hawking analysis on the Goldwater website:

http://www.goldwaterinstitute.org/file/5526/download/5528

Assumption is $12 to park at a Coyotes game in the first year, increasing by 2.5% per year. 32 "major" concerts/events at an average price to park of $17.50 per event.

This is a case of "if you pay for it, a so-called expert will document whatever you want."

The assumptions in that report are laughable: 15,000 per game with a new $12 parking fee. According to documents submitted in the bankruptcy case, the Coyotes have averaged 12,000 persons in actual attendance for all of their years in Phoenix. And at their time at Jobing.com, that includes free parking and cheaper than average NHL ticket prices.

Why is it reasonable to assume that 3,000 more individuals will turn up for games once a new $12 parking fee is added? That is not a reasonable assumption. It is more like a "best case scenario" or even wishful thinking. You would expect a report such as this to be based on conservative assumptions, but in this case the COG has paid someone to attempt to justify providing an illegal subsidy to a private business. Go figure.

GHOST

 

[Tommy Hawk]

The number of non-hockey events have declined. Of course, a lot of that probably has to do with the economy, but the economy was still very strong in 2006 and 2007.

I think it has less to do with the economy than the number of available dates. Once you throw the money pit Coyotes into the fray, they are probably using more than just the game dates. For example, if they have a game on Saturday night and Sunday afternoon to start a home stand then on Wednesday and the next Friday, they would be unable to rent the arena for events that would require a significant amount of set-up and break down time so while this scenario is only 4 games, it basically takes up 8 event dates or more.

Your not suggesting the CoG is lying about the Coyotes being critical are you?

I am.

Me? Heaven's no. I would never suggest such a thing. Lying is such a strong word.

I am suggesting such a thing. I think someone posted it before that this seems to be an ego/prestige/arrogance thing the CoG is doing instead of looking at it from a business standpoint.

 

[OthmarAmmann]

I think it has less to do with the economy than the number of available dates. Once you throw the money pit Coyotes into the fray, they are probably using more than just the game dates. For example, if they have a game on Saturday night and Sunday afternoon to start a home stand then on Wednesday and the next Friday, they would be unable to rent the arena for events that would require a significant amount of set-up and break down time so while this scenario is only 4 games, it basically takes up 8 event dates or more.

that would seem to indicate that jobing/Westgate is actually better without the Coyotes.

 

[MaskedSonja]

Me? Heaven's no. I would never suggest such a thing. Lying is such a strong word.

Lying in the business world! Shame on both of you for suggesting (not) such a thing!


Now being "economical with the truth....."

 

[MaskedSonja]

that would seem to indicate that jobing/Westgate is actually better without the Coyotes.

That, plus the earlier comment of the arena having it's best year in a lockout year, may seem to suggest that indeed that the Yotes leaving would indeed help the bottom line!

I wonder if others have pointed this out to him-he's doing a service for the Yotes being gone, not being in Phoenix

 

[RR]

Page 53 of the Walker report says, "...the Arena had its best year (in terms of total attendance) in 2005 at roughly 1.15 million attendees and 95 events."

If the year (or at least a part of the year) of the strike provides the best ever attendance, how can they reasonably argue that this NHL team is such a critical tenant?

As I look at the report it appears to me that Walker counts all non-hockey events in a calendar year and hockey attendance over a complete hockey season.

So in 2005 the total attendance includes 2005-06 season hockey attendance (Oct. 2005 - April 2006) with 2005 non-hockey event attendance (Jan. 1 2005 - Dec. 31 2005).

Walker is consistent through the report.

 

[MaskedSonja]

As I look at the report it appears to me that Walker counts all non-hockey events in a calendar year and hockey attendance over a complete hockey season.

So in 2005 the total attendance includes 2005-06 season hockey attendance (Oct. 2005 - April 2006) with 2005 non-hockey event attendance (Jan. 1 2005 - Dec. 31 2005).

Walker is consistent through the report.

That's not a year, that's a year and a half:

He's quoting from Jan 1 2005-to April 2006. (A year and 4 months)

Then he shouldn't be saying year, he should be saying year and half. He either should be quoting from Oct 2005-Oct 2006, or from Jan 1, 2005, to Dec 2005, and including events in that 365 days only.

Adding the 4 months skews, so technically he's not being accurate when he says a year.

 

[OthmarAmmann]

That's not a year, that's a year and a half:

He's quoting from Jan 1 2005-to April 2006. (A year and 4 months)

Then he shouldn't be saying year, he should be saying year and half. He either should be quoting from Oct 2005-Oct 2006, or from Jan 1, 2005, to Dec 2005, and including events in that 365 days only.

Adding the 4 months skews, so technically he's not being accurate when he says a year.

True, but the important thing for comparative purposes is that everything is measured consistently.