Phoenix CXXIII: Who Wants to Pay Our Bills?

[Fugu]

Where we left off from http://hfboards.mandatory.com/showthread.php?t=2185449 :

http://arizonasports.com/story/1024...rovide-funds-for-new-coyotes-arena-explained/

To build it, the team would contribute $170 million and the host city $55 million. Another $170 million would be raised through bond sales.

As part of the Coyotes’ pitch for the bill — which included a slideshow presentation — they noted that most other sports facility projects around the country are funded with a variety of taxes, and while theirs will also require government funds, it will not require any tax increases or state financing.

Therefore, they reason, there is no risk to the state nor use of existing state funds. Instead, the project will bring in new revenue with the franchise assuming all construction risk.

According to the Coyotes, once the arena is built their annual cost to maintain it will be around $24.4 million, which is among the highest for comparable NHL teams.

***

https://www.glendaleaz.com/documents/Study-ComparisonofOperatingCostsforSimilarArenas.pdf

Based on this they estimate $13 million to $15 million in arena operating costs for Glendale.

So IA is going to move into an arena that will cost them ~$10 million more per season to operate than the one in Glendale.

And where is IA going to get the $24.4 million / year to maintain the building? Not pay the players.

Hmmm...going on in Senate Finance Committee now...SB1404 and SB1480 are being melded regarding community facilities districts?

From SB1480:

"On presentation of a petition signed by the owners of at least twenty‑five percent of the land area proposed to be included in the district and a completed application for formation of a district by an individual or entity, the governing body of a municipality or county within sixty days after submission of the completed application shall hold a public hearing to consider the application for formation of the district. Immediately after completion of the hearing, the governing body may adopt a resolution declaring its intention to form a community facilities district that shall include contiguous or noncontiguous property that is wholly within the corporate boundaries of the municipality or county. If the governing body does not adopt a resolution declaring its intention to form a district, the governing body shall provide a written basis for not adopting the resolution and shall identify the specific changes needed for the application to be approved and for the resolution declaring its intention to form a district to be adopted.

Any fees or other charges paid by the applicant before formation of the district that exceed the actual costs of forming the district shall be used by the municipality or county solely to support the formation or administration of the district, including the issuance and sale of bonds."

I simply cannot wrap my mind around the fact that it's actually going to cost $24.4 million/year to maintain the building. The suspicious part of my brain wonders if, because apparently the arena will be owned "free and clear" by the city in which it resides, it's a backdoor subsidy built into the deal since, I'm guessing, the Coyotes would consider themselves the arena managers and thus would need the $24.4 million as their fee.

If that's the case, then this deal gets even worse.

Click to read more...

 

[IceAce]

Phoenix CXXIII: Doo, doo, doo, looking at a backdoor (subsidy)

Phoenix CXXIII: L.A.M.E. Law

Phoenix CXXIII: I'm Just a Bill, a Subsidy Bill

Phoenix CXXIII: The Biggest Patsy Since Cline

Phoenix CXXIII: Who Wants to Pay Our Bills?

Phoenix CXXIII: You get an arena, and YOU get an arena, and YOU get an arena and....

 

[The Feckless Puck]

Phoenix CXXIII: You get an arena, and YOU get an arena, and YOU get an arena and....

Simplified to Phoenix CXXIII: The Oprah-ning

 

[Llama19]

Phoenix CXXIII: The SBs Award Goes To...
Phoenix CXXIII: TIF for That?

 

[passive voice]

Have we done a LeBlanc Cheque/Check title yet?

Watched John Wick 2 last night. It was pretty bad, but I realized where the inspiration for all these impossible-to-kill action movie heroes is coming from. Coyotes gonna outlive all of us.

 

[The Feckless Puck]

OH GOD PLEASE TAKE OUT THE APOSTROPHES BEFORE MY BRAIN EXPLODES

(I know it was a subtle jab at IceArizona's intelligence but my pseudo-OCD is going to drive me crazy.)

EDIT: Thank you, thank you, thank you!

 

[Fugu]

OH GOD PLEASE TAKE OUT THE APOSTROPHES BEFORE MY BRAIN EXPLODES

(I know it was a subtle jab at IceArizona's intelligence but my pseudo-OCD is going to drive me crazy.)

Killion did it!


All fixee now.

 

[kihekah19*]

Never expose a weakness!

 

[MNNumbers]

Leblanc: OK, city of Mesa. Here's the deal... You get a CED. All you have to pay is 55M up front for the construction of the arena. The state backs the rest through a TIF, so that's their problem if the TIF funds run short.

Mesa: Ok, we'll think about it.

LeBlanc: Oh, and you need to pay us 24.4M/yr for 30 years, for upkeep on the building.

Mesa: What?!!??!! Not interested. That's an actual cost to us of 800M. Are you nuts!?!?!

or, hopefully, something like that.

 

[Spartachat]

The new arena will have trouble getting concerts and other events competing against two other arenas. Without an anchor tenant I would assume that Glendale would offer attractive pricing to event organizers just to limit their losses. A family going to see a Justin Bieber concert will be less sensitive to traffic than a STH that goes to 41 games a year. Also, events organizer will not want to compete against other large events on the same night. For example, it would not be good for the Yotes to compete against the Suns and a concert on a Saturday night.

 

[Mightygoose]

Is there a reason, and maybe there is why the Coyotes would mention that it would cost 24.4 million to run the place right off the back?

If anyone that does even the slightest bit of scrutiny, should know that someone would need to cover that amount as even with a slight bump in attendance should it last, the Coyotes can't cover it.

It seems like Mr. Worsley knows this won't go anywhere even if it does get full legislative approval. Get the bidding war that will never come.

Considering it took amending another bill that pretty much had the votes built in already to get it to this stage...the original one failed on it's own.

Official prediction, by Mightygoose: This will end up sitting in the Rules committee collecting dust and will eventually turn into dust....doom

Passage with bang yesterday, dies in a wimper.

 

[Headshot77]

Wait, is this 24.4 a request for another shoddy AMF pseudo-subsidy, or are they just mentioning is saying "We'll put in $170 million, then every year it will cost us $24.4 to keep it running, so we are showing our commitment".

If it's a request for district tax money AGAIN then there aren't enough emojis on HFboards to adequately describe my feelings towards that.

EDIT: just glanced over the last thread. So, Mesa (or whatever sucker agrees to "own" this arena) would be on the hook for 55 million, and $24.4 million a year for THIRTY YEARS. You've got to be ****ing kidding me.

 

[WildGopher]

It seems like Mr. Worsley knows this won't go anywhere even if it does get full legislative approval. Get the bidding war that will never come.

Considering it took amending bill that pretty much had the votes built in already to get it to this stage...the original one failed on it's own.....this will most likely sit in the Rules committee collecting dust and will eventually turn into dust.

Passage with bang yesterday, dies in a wimper.

That's my guess, too, but it has to be noted that IA might have been helped today with Sen. Lesko having to pull back her SB1404 from consideration in the Finance Committee. That delay might not be permanent, but it looks like Valley developers other than IA don't like her bill, for probably understandable reasons. If her bill doesn't go anywhere, it maybe clears the air a bit for full attention to Worsley's bill, and with one less roadblock to contend with. Still a long hill to climb, but he and IA have at least navigated the first couple of hurdles.

(Note: I wouldn't usually use words like "roadblock," "navigate" and "hill to climb," but I'm just trying to help out Sen. Worsley here, who has to convince everyone that his bill is really about "Transportation." So the more we use transportation terms, the more legit this whole thing becomes! Just doin' my part).

 

[cbcwpg]

I just don't understand LeBlanc or IA sometimes or most of the time...

If it was me trying to get a sweetheart deal passed thru the senate so I could get a fancy new arena built for me, I sure as hell would wait until AFTER IT WAS BUILT before I told anyone that it was going to cost $24.4 million per year to keep the lights on.

 

[GuelphStormer]

this just keeps getting better. $24.4M to maintain and operate a brand new facility?

tony should just go all in, and demand that they pay player salaries and cover his prius lease.

 

[kihekah19*]

I just don't understand LeBlanc or IA sometimes or most of the time...

If it was me trying to get a sweetheart deal passed thru the senate so I could get a fancy new arena built for me, I sure as hell would wait until AFTER IT WAS BUILT before I told anyone that it was going to cost $24.4 million per year to keep the lights on.

They just like being real upfront and forthcoming.

 

[BattleBorn]

I just don't understand LeBlanc or IA sometimes or most of the time...

If it was me trying to get a sweetheart deal passed thru the senate so I could get a fancy new arena built for me, I sure as hell would wait until AFTER IT WAS BUILT before I told anyone that it was going to cost $24.4 million per year to keep the lights on.

I realize I'll anger a few people saying this, but the 24.4 doesn't make a lot of sense to disclose.
A.) Wouldn't the site itself have a lot to do with maintenance?
B.) While I'm sure they've paid some money to have some conceptual work done, how can you determine maintenance until the thing has been completely engineered? Especially if the maintenance cost is so much higher than comparable facilities.
C.) What's the point of disclosing it at this point with any specificity instead of just using average maintenance for facilities of this size anyway?

Just for comparison, a new elementary school in Las Vegas (just because I'm familiar with the area) costs $28,775,000 to build and equip since they all use the same plans. They're really saying that maintenance on an existing facility will cost almost as much as a brand new Clark County School District elementary school every year?

This is starting to smell a lot like PR to me. I realize that's not a new concept, but are they really trying to stay in Phoenix or are they just trying to make it seem like they're trying to stay in Phoenix?

 

[Killion]

OH GOD PLEASE TAKE OUT THE APOSTROPHES BEFORE MY BRAIN EXPLODES

(I know it was a subtle jab at IceArizona's intelligence but my pseudo-OCD is going to drive me crazy.)

EDIT: Thank you, thank you, thank you!

Killion did it!


All fixee now.

.... sorry TFP.... I guess things like the Leaning Tower of Pisa must drive ya nuts huh?... somebody post a picture of it would they? Just for Feckless.

 

[GuelphStormer]

I realize I'll anger a few people saying this, but the 24.4 doesn't make a lot of sense to disclose.
A.) Wouldn't the site itself have a lot to do with maintenance?
B.) While I'm sure they've paid some money to have some conceptual work done, how can you determine maintenance until the thing has been completely engineered? Especially if the maintenance cost is so much higher than comparable facilities.
C.) What's the point of disclosing it at this point with any specificity instead of just using average maintenance for facilities of this size anyway?

Just for comparison, a new elementary school in Las Vegas (just because I'm familiar with the area) costs $28,775,000 to build and equip since they all use the same plans. They're really saying that maintenance on an existing facility will cost almost as much as a brand new Clark County School District elementary school every year?

This is starting to smell a lot like PR to me. I realize that's not a new concept, but are they really trying to stay in Phoenix or are they just trying to make it seem like they're trying to stay in Phoenix?

do teacher salaries add up to $60M/yr?

 

[objectiveposter]

They arent asking for 24 million a year to run the arena. They are just showing how much of an investment they will be making. 24 mill is likely more bs, but they arent asking for an additional subsidy.

 

[MNNumbers]

I don't think any of us really understand the disclosure of the maintenance that IA is forecasting.

But, i do think we all know what it is: It's a subsidy, like the 15M/yr they got in Glendale.

That tells you a lot about the situation.

Think about it. That's for maintenance. They promise to run the place (manage it) at cost.

GRA costs Glendale about 1M year contractually, although occasionally they have put in more. Let's be generous and call it 2M.

That leaves 22M for the organization. That's 7M/yr more than in Glendale.

What does that tell you about their losses??

Why that got out, I don't know. I just know what it means.

And, one thing it means is that it's going to be a really hard sell to Phoenix or Mesa or wherever even if they get this bill through the Senate.

Can you imagine?? I don't know the length of lease they are promising. I said 30 before. The deal with Glendale in 2013 was for 15, so let's go with that. They would have to be quickly served bonds, but let's go with that.

170 from the state.
55 from the city.
22M (net) x 15 years = 330M more from the city.

Almost 400M from another city, when they've already scammed Glendale for 170M to build, 50M in extortion, 30M in AMF fees, the first time, and 6M more in the amendment, or 260M or so.

It's unconscionable. And, I think it's going to be a really hard sell anywhere.

But, at least it's up front about what they need.

Can someone post a link for the 24.4M/yr?

 

[Llama19]

.... sorry TFP.... I guess things like the Leaning Tower of Pisa must drive ya nuts huh?... somebody post a picture of it would they? Just for Feckless.

 

[MNNumbers]

They arent asking for 24 million a year to run the arena. They are just showing how much of an investment they will be making. 24 mill is likely more bs, but they arent asking for an additional subsidy.

The phrasing we saw was, "This arena will cost 24.4M/yr in maintenance, far more than any other arena."


There is no reason to think of that as anything other than "physical maintenance."

And, although it is not specified who will pay, we know enough about the financials to know that IA is not going to be able to pay that, as well as try to stay solvent paying the 170M loan for construction costs. So, the municipality must be the one paying.

 

[cbcwpg]

They arent asking for 24 million a year to run the arena. They are just showing how much of an investment they will be making. 24 mill is likely more bs, but they arent asking for an additional subsidy.

So you are saying it really only costs IA say $10 million / yr to run but IA is saying $24.4 million so they look like they are really putting a lot of skin into this project?

If that was the case, why not say $20 million or $25 million or some round number? $24.4 million sounds pretty specific like someone has actually costed this out.

Remember that for all appearances it looked like IA was willing to stay in Glendale long-term under the original AMF. And if IA couldn't help but lose money in Glendale with a $15 million AMF and said Glendale was in the wrong location only after Glendale cancelled the AMF, then how is this troop going to manage paying $24.4 million out of pocket in the new location?

And let's just suppose IA does have the where-for-all to cover costs of $24.4 million, that makes it look even worse as to the stunt they pulled in Glendale getting the AMF.

 

[Montrealer]

The phrasing we saw was, "This arena will cost 24.4M/yr in maintenance, far more than any other arena."


There is no reason to think of that as anything other than "physical maintenance."

And, although it is not specified who will pay, we know enough about the financials to know that IA is not going to be able to pay that, as well as try to stay solvent paying the 170M loan for construction costs. So, the municipality must be the one paying.

I'm so confused by this part. They're bragging it's going to be more far more costly to run this proposed arena than normal?!