Phoenix LXII: Abandon Hope all Ye Who Enter Here

[rt]

The increase is $0.007 (from $0.025 to $0.032) so that's an increase of 70 cents per $100 spent. On the sale of a $5,000 car it adds $35 to the cost. For a $50,000 car it's still $35 since anything over $5,000 is exempt. It will cost you more in time and gas to avoid the tax. It's not about the money.

Haha.

 

[TheLegend]

Well, I just did a quick search of his inventory, and Kimmerle's got less than 6 cars on his lot for less than $5K out of 100's, and those at $4888. So then whats really going on? Purchases over $5K are "exempt".

Maybe this Kimmerle Dudes a front for the Gila Tribe and Salt River Band who have cottoned on to the Tohono's plan to either invest or loan Jamison the money to buy the franchise, using their stake in the franchise as leverage to develop their Casino & Resort on 51st, not far from Sanderson Ford itself?

The Gila River Band have stood shoulder to shoulder with the COG against the Tohono's as they have their own interests with Casino's in Chandler & Phoenix and the Salt River Pima Band with Talking Stick Casino & Resort over in Scottsdale. Enmity between all 3 bands, but mostly directed towards & at the Tohono's by the Gila & Salt River Bands stretches back through time to pre-Spanish Conquest. Complicated & complex.

Maybe Kimmerle's really worried that if Jamisons successful, the COG going ahead with its tax increase, the Casino going up on Northern near 51st, his business will suffer, land prices will plummet even more than they already have. Including all that acreage he's got his dealership sitting on. Maybe he's bought additional property, speculatively. So you have this car dealer William H. Macy Fargo type hooking up with the Gila & Salt River Bands, convincing the COG to resist the Tohonos plans, throwing money & energy into GlendaleNow; on the other, the Tohonos by stealth backing Jamisons play....

The Gila River and Salt River bands are concerned the Tohonos' casino in Glendale would break the gaming pact approved by the voters in 2002. All the tribes were in agreement to it and now the Tohonos want to bend things. That's where they stand.

Who knows what Kimmerle's motives are? The irony in this is Sanderson Ford currently has loads of ad space purchased at Westgate and has been a sponsor of the Coyotes.

But Kimmerle isn't the only backer of this initiative. The Association of Home Builders for Central Arizona (may have name wrong) have also chipped in some big dollars into it. How does home building figure into it?

There's a lot more going on here.

 

[aqib]

Killy.... Mr. Kimmerle, Sanderson Ford's owner, was pretty specific about this tax increase affecting his car sales.... not his leasing operations.

All the more reason why to suggest this goes well beyond an AMF for a hockey franchise. Everyone here has chosen to ignore that aspect, but it's not surprising.

Well quite frankly if there wasn't a hockey team involved hardly anyone outside of Arizona would care about Glendale. You don't see any threads around here about Highland Park, Michigan. Highland Park is so broke that the electric company took the light polls away from all but the 2 main streets to recycle them to pay down the electric bill. Did you know about that? probably not because there are a lot of cities going through issues but this is a hockey forum so we only care about how it effects hockey.

 

[blues10]

I would speculate that the car dealerships and home builders were hit very hard by the recession. I don't recall the city of Glendale coming to the table with a $300 million plus subsidy to help keep those businesses afloat during tough economic times.

I would think this has a lot more to do with the $300 million dollar gift to one business in Glendale than anything else.

 

[powerstuck]

The council made it quite clear on Tuesday what would happen if the initiative passes. And the hockey team was the least of their worries.

I really hope the same council knows that if they get rid of the team and the AMF they would not have to worry about the tax issue on ballot and could even allow themselves a tax decrease.

 

[Uemoda]

Thanks for taking me up on my Dante allusion, kdb!

It looks good up there.

 

[GuelphStormer]

Killy.... Mr. Kimmerle, Sanderson Ford's owner, was pretty specific about this tax increase affecting his car sales.... not his leasing operations.

All the more reason why to suggest this goes well beyond an AMF for a hockey franchise. Everyone here has chosen to ignore that aspect, but it's not surprising.

given that the tax increase is optimistically said to raise $25M annually over the next 5 years and is being deliberately spun by the city to cover budget shortfalls and to allow for no layoffs, it's not surprising that some people in town may be persuaded to forget the singular reason for that shortfall ... the $45 to $50M already thrown down the coyote chute by the city these past two years. directly or indirectly, this is ALL about the AMF. don't anybody fool themselves. besides, that new tax revenue will barely pay for the new proposed AMF, let alone address these important other budget issues and impending layoffs.

how anyone can argue for taking the AMF out of the whole equation is unbelievable - sanderson, you or anyone else. and personally, I dont believe for a second that anyone at sanderson does not see this as being directly tied to the AMF, regardless of how they present their case.

 

[CasualFan]

But Kimmerle isn't the only backer of this initiative. The Association of Home Builders for Central Arizona (may have name wrong) have also chipped in some big dollars into it. How does home building figure into it?

There's a lot more going on here.

I think what might be going on is that an unethical, dishonest city government tried to block the initiative from going on the ballot in a very unethical and dishonest manner (Count 3: Initiative belongs on primary ballot was my favorite). It's easy to make enemies when you conduct yourself in the manner that Glendale has. From my understanding, the city did no outreach to the business community before imposing the tax increase. It was only after the outrage that the city implemented the exemption for purchases over $5k. Too late, the bridge was burned. Glendale and their dime store city attorney tried to bully the business owners but the businesses didn't run away. They started hitting back. Now the city has a fight on their hands.

Hindsight is always 20/20, but Glendale could have avoided this entire mess with even marginally competent leadership.

The council made it quite clear on Tuesday what would happen if the initiative passes. And the hockey team was the least of their worries.

Yeah, not surprisingly, the city is attempting to use the SkeeteSheet to deflect attention away from the team. The city learned nothing from the above and continues to operate in an unethical and dishonest manner. The numbers in the SkeeteSheet are completely erroneous. The $24MM vs $25MM scenario is another poor attempt to justify spending on the team. It's as fictional as the now infamous Hocking/Pollack report. In reality, the scenario is closer to:

- The city saves about $9MM per year without JIG Lease R (renegotiated to $72MM over 5 yrs)
- The city saves about $13MM per year without JIG Lease O (original lease voted on June 8)

For a community facing austerity measures, those are significant amounts.

Also, the $24MM v $25MM scenario includes another anomaly. I have to defer to the finance guys but I'm extremely skeptical of Skeete's assumption that debt can only be refinanced if the city pays to keep the Coyotes.

 

[metalfoot]

CF, it's starting to sound like you've become a relocationist. Hard to argue with the numbers, isn't it?

 

[CasualFan]

CF, it's starting to sound like you've become a relocationist. Hard to argue with the numbers, isn't it?

Realist rather than relocationist. I've never cared what happens to the team.

 

[metalfoot]

Gotcha. Fair enough. As I've said before, despite my current location, being a diehard Senators fan I have no skin in this game either.

So are we on the 39-day clock or what? Will it come down to the municipal elections to decide the fate of the Coyotes?

 

[TheLegend]

I really hope the same council knows that if they get rid of the team and the AMF they would not have to worry about the tax issue on ballot and could even allow themselves a tax decrease.

Without the team Glendale is still short and the cuts will happen if the sales tax gets rolled back.

That the reality of it, despite CF's take on it.

 

[TheLegend]

I think what might be going on is that an unethical, dishonest city government tried to block the initiative from going on the ballot in a very unethical and dishonest manner (Count 3: Initiative belongs on primary ballot was my favorite). It's easy to make enemies when you conduct yourself in the manner that Glendale has. From my understanding, the city did no outreach to the business community before imposing the tax increase. It was only after the outrage that the city implemented the exemption for purchases over $5k. Too late, the bridge was burned. Glendale and their dime store city attorney tried to bully the business owners but the businesses didn't run away. They started hitting back. Now the city has a fight on their hands.

Hindsight is always 20/20, but Glendale could have avoided this entire mess with even marginally competent leadership.



Yeah, not surprisingly, the city is attempting to use the SkeeteSheet to deflect attention away from the team. The city learned nothing from the above and continues to operate in an unethical and dishonest manner. The numbers in the SkeeteSheet are completely erroneous. The $24MM vs $25MM scenario is another poor attempt to justify spending on the team. It's as fictional as the now infamous Hocking/Pollack report. In reality, the scenario is closer to:

- The city saves about $9MM per year without JIG Lease R (renegotiated to $72MM over 5 yrs)
- The city saves about $13MM per year without JIG Lease O (original lease voted on June 8)

For a community facing austerity measures, those are significant amounts.

Also, the $24MM v $25MM scenario includes another anomaly. I have to defer to the finance guys but I'm extremely skeptical of Skeete's assumption that debt can only be refinanced if the city pays to keep the Coyotes.

Yes CF... they are significant amounts. Yet even you cannot deny the fact Glendale is still short despite them and without the sales tax increase they will still be required to make cuts to city personnel and services.

 

[David_99]

Yes CF... they are significant amounts. Yet even you cannot deny the fact Glendale is still short despite them and without the sales tax increase they will still be required to make cuts to city personnel and services.

The City made it's own bed here. I'd find it hard to believe a smaller tax increase would be so opposed had the Coyotes left. Which brings up the whole debt refinancing question CF mentioned. If they had bigger things to worry about than the Yotes, why are they still here? Cut your loses, not your city staff.

 

[CasualFan]

Yes CF... they are significant amounts. Yet even you cannot deny the fact Glendale is still short despite them and without the sales tax increase they will still be required to make cuts to city personnel and services.

Absolutely. I certainly never thought otherwise nor was it my intent to deny anything. The city deficit cannot be eliminated by removing the JIG Lease. However, the city faces far less sever cuts if they abandon the JIG lease.

That's kind of the point. The city keeps pouring gas on the fire because they keep putting out these disingenuous scenarios that drastically understate the negative impact caused by the large scale subsidization of the Coyotes. They continue attempting to use obvious misrepresentations to shield the team from scrutiny while exposing other businesses to some pretty significant impacts from taxation and service cuts. It's even more ironic when you consider that the budget armageddon is the direct result of the city's decision to pay the NHL $50MM.

You've been around for a while Legend and I'm pretty sure that none of this is news to you. As a fan, I imagine you can look the other way on a lot of it because it is a means to an end but I've never pictured you as gullible enough to actually buy what the city is trying to sell here.

 

[sipowicz]

Has the October lease agreement extension been announced yet? And if it isn't extended? Would the COG even extend the lease agreement when they want it reworked? So many questions and yet more fodder for this thread.

 

[Tommy Hawk]

Well quite frankly if there wasn't a hockey team involved hardly anyone outside of Arizona would care about Glendale. You don't see any threads around here about Highland Park, Michigan. Highland Park is so broke that the electric company took the light polls away from all but the 2 main streets to recycle them to pay down the electric bill. Did you know about that? probably not because there are a lot of cities going through issues but this is a hockey forum so we only care about how it effects hockey.

You cannot make that statement. The only reason we post about CoG and not the others is that this is a Business of Hockey board, not a Local Government or State Government or Federal Government comment board. Any posting such as the info for HP, MI or any other locale would be deleted unless it related to CoG and the Yotes.

Without the team Glendale is still short and the cuts will happen if the sales tax gets rolled back.

That the reality of it, despite CF's take on it.

Yes CF... they are significant amounts. Yet even you cannot deny the fact Glendale is still short despite them and without the sales tax increase they will still be required to make cuts to city personnel and services.

True dat there will still be cuts, HOWEVER, if they raise 25 mil per years with the sales tax and 17 on average goes to JIG, that leaves only 8 mil to close the gap if they even get their estimated 25 mil additional revenues. That still means cuts. So their statement that they need this to close the budget shortfall is BS as it will not close the shortfall and they will still need to make cuts. Without the Yotes, however, and with a more advantageous AMULA, they may be able to pass a sales tax increase when the citizens know that 2/3 of it is not going to a bunch of millionaires to pay another bunch of millionaires salaries.

I also do not see the council members agreeing to reduce their salaries to help out and keep services going.

 

[Killion]

Without the team Glendale is still short and the cuts will happen if the sales tax gets rolled back.

...absolutely, but even with the tax increases & the Coyotes gone, their still facing cuts (as TommyHawk notes aboves as well). Assuming the re-worked Lease & AMF comes in at $72M over the first 5yrs, that too is just going exacerbate matters, putting them right behind the 8Ball, having to make some serious cuts regardless. They cant have it both ways when the monies simply not there.

So my suggestion would be that they go all out, offer Jamison that $6M figure they seem to have convinced themselves is legit, heavily performance based, the $6M descending over time to about $2M per annum after year 5 with an escalator in performance %'s as he re-builds the brand, the team, starts filling in the empty calendar dates. Give him an "out". If after 48-72mnths still bleeding red ink, free to leave, give the COG 12mnths notice, try to find a local buyer.

 

[calmdown]

The same question again... Is it better with or without the Yotes for Glendale? As it has been tell to COG, whitout them it would be catastrophic for Westgate and their businesses and a lot of lost taxes and revenue. Here's my question... Whith the lockout, it is like "No hockey team"? How will Glendale survive if it last one year?

 

[JF55JF]

Absolutely. I certainly never thought otherwise nor was it my intent to deny anything. The city deficit cannot be eliminated by removing the JIG Lease. However, the city faces far less sever cuts if they abandon the JIG lease.
.

Exactly. When someone is in financial trouble they need to tighten their hold on their money. Cut corners here, save a penny there.

If you are in a spot where civic services are going to be cut and jeopardized, then you need to start removing costs and debt creators. How much would the situation in Glendale and their moneys improve if they never would of paid the cash to the NHL and the future JIG subsidy?" Might not fix the situation, but it would make it more manageable.

 

[cheswick]

The increase is $0.007 (from $0.025 to $0.032) so that's an increase of 70 cents per $100 spent. On the sale of a $5,000 car it adds $35 to the cost. For a $50,000 car it's still $35 since anything over $5,000 is exempt. It will cost you more in time and gas to avoid the tax. It's not about the money.

That's not how the press release states it.

The new rate includes approval from the Glendale City Council for a tiered system for higher-end purchases. That means those who purchase retail items that cost $5,000 and above are exempt from the increase and will continue to pay the rate of 2.2 percent.

The way its worded any item that is over $5,000 pays the lower tax amount so there would be no increase at all for items over $5,000, not that the increase only applies to teh first $5,000 of the purchase. Its unclear if automobiles are captured in the "retail items" exemption. I personally couldn't find a definition of what is considered a retail item.

 

[CasualFan]

So my suggestion would be that they go all out, offer Jamison that $6M figure they seem to have convinced themselves is legit

But that belies the fact of the matter: the market isn't viable. The team cannot operate in Glendale without a large scale subsidy. Your scenario takes away the subsidy and asks the team to survive on it's own merits. That model is already a proven failure. In order of magnitude, it was such a failure that even with the large scale subsidy, they still cannot attract ownership interest that is capable of closing a deal.

How much would the situation in Glendale and their moneys improve if they never would of paid the cash to the NHL

Well, you can't really undo anything at this point but yeah the current fiscal year budget deficit was around $32MM. That deficit was created by paying the NHL $50MM. However, even if you could undo that, since the astute folks in Glendale also took on half a billion in unfunded baseball stadium debt, the austerity measures would still be needed. Just a bit later on.

Glendale has put on a pretty convincing seminar on how to crush your city with sports facility debt. Turns out that spending a billion on stadiums, arenas, and ballparks doesn't make champagne flow from the faucets. But maybe if they spend another $300MM it will suddenly work...

 

[Killion]

The same question again... Is it better with or without the Yotes for Glendale? As it has been tell to COG, whitout them it would be catastrophic for Westgate and their businesses and a lot of lost taxes and revenue. Here's my question... Whith the lockout, it is like "No hockey team"? How will Glendale survive if it last one year?

...in my opinion they had absolutely no business agreeing to the kind of fee structure with Jamison that they have period. Completely untenable. Right over the top. Absolutely a one sided one way ticket to insolvency. Westgate's already an un-holy mess, iStar financial unable to even garner a single bid at their minimum of $40M for a near on $500M+++ commercial holding. CreditSuisse taking a bath on a $500M loan to Ellman seizing vacant land surrounding the development and they too stuck with it, no one bidding on their minimum via auction of $200M (I think that figures correct).

Sometimes its better to just say "good-bye" rather than pour on good money after bad, and it takes guts, vision & leadership to make that call, qualities that are completely absent in Glendale. Now, Im one of the very, VERY few who believe this thing can be turned around, the franchise actually viable in Phoenix HOWEVER, the recipe' theyve created with Jamison (and of course previously with Hulsizer & IEH's) guarantee's, absolutely locks' them into a rail car headed right over the edge of a cliff. Madness. Either give it a shot based on fair market value Arena Management Fee's combined with prudent & conservative financial projections with an "out clause" or pull the pin. Lay it on the line to Jamison & the NHL & if they dont like it? Bye bye. Get on with alternate plans.

Unfortunately, its' seemingly too late for that, common sense to prevail, as precedences have been set. Glendale backing the NHL's purchase of the franchise despite Baums' warnings; the $50M already paid to the league; the Moonshots agreed to through the triangulations with IEH/MH/GJ - Beasley & the NHL. And as for the Lockout, the all powerful NHL's got a grand total of 6 events & concerts currently scheduled into the building from September 2012 through June 2013. Even with hockey, 40+ home dates, at least the COG isnt fronting $25M, $17M or whatever for complete non-performance as has been the case for the past 3 seasons. Tax revenues from shopping, ticket surcharges not even remotely coming close to ameliorating those fee's & payments so in fact, the Lockout's been a healthy development for them. Time to collect themselves, re-group, take a deep breath & seriously re-consider the commitments theyve been making in writing checks with their mouths that their butts cant cash.

 

[Slashers98]

So has the NHL finally cashed in the whole $25M management fee for the past year? I heard, Glendale was short $5M or something.

 

[Killion]

But that belies the fact of the matter: the market isn't viable.

... ya, see, right there CF, you and I disagree on that fundamental premise, and Im well aware of the fact that Im in a minority of likely less than 10% of anyone who's seriously followed the Shenanigans in Glendale, crunched the numbers.

The model is a proven failure because the Architects & Generals were beyond weak, and that includes the NHL itself. They failed the market. Compounding matters you had a Lockout in 04/05, the 2nd season in the teams new building; Gretzky & Friends; Jerry Moyes who even at the best of times in the most robust of economies has a track record of intransigence & questionable integrity (sued by his kids after he tried to raid the family trust etc); and certainly no experience in sports & entertainment ownership, marketing & promotion.

Such an opinion as mine I know is one of hubris & perhaps arrogance to some extent, that "I know better, Im smarter than everyone else" but really its not. If you strip it bare, turn it inside out & start from scratch, what I see is nothing but tremendous potential worth the effort, success more than attainable without relying upon massive taxpayer subsidies. To me, its just a matter of creativity, being inclusive. All that being said however, your absolutely correct that no one of that particular ilk has stepped up to the plate, a visionary, nor are they likely to, as precedents have been set, the boundaries pushed well beyond anything we've ever seen by municipal, state or provincial authorities.