Phoenix XIXth: Nervous Breakdown

[MAROONSRoad]

I think it's fair to say we all feel the same way. Would be great to fall asleep and not wake up until...wait for it...Feb. 15th.

Is that the day Hulsizer gets his money?

GHOST

 

[Coach]

Does the COG have a meeting planned for tommorow. I found this on another site but not sure if it's real as I've heard nothing about a meeting.

Item two on the Glendale Meeting Agenda for tomorrow:

2. LEGAL MATTERS – PROPERTY & CONTRACTS

A. Discussion and consultation with the City Attorney and City Manager to receive an
update, consider its position and provide instruction and direction to the City Attorney
and City Manager regarding Glendale’s position in connection with agreements
associated with the Arena and the Hockey Team, which are the subject of
negotiations. (A.R.S. § 38-431.03 (A)(3)(4)(7))

 

[davemac1313]

Does the COG have a meeting planned for tommorow. I found this on another site but not sure if it's real as I've heard nothing about a meeting.

Item two on the Glendale Meeting Agenda for tomorrow:

2. LEGAL MATTERS – PROPERTY & CONTRACTS

A. Discussion and consultation with the City Attorney and City Manager to receive an
update, consider its position and provide instruction and direction to the City Attorney
and City Manager regarding Glendale’s position in connection with agreements
associated with the Arena and the Hockey Team, which are the subject of
negotiations. (A.R.S. § 38-431.03 (A)(3)(4)(7))

They have a council meeting scheduled every Tuesday

 

[RR]

Does the COG have a meeting planned for tommorow. I found this on another site but not sure if it's real as I've heard nothing about a meeting.

Item two on the Glendale Meeting Agenda for tomorrow:

2. LEGAL MATTERS – PROPERTY & CONTRACTS

A. Discussion and consultation with the City Attorney and City Manager to receive an
update, consider its position and provide instruction and direction to the City Attorney
and City Manager regarding Glendale’s position in connection with agreements
associated with the Arena and the Hockey Team, which are the subject of
negotiations. (A.R.S. § 38-431.03 (A)(3)(4)(7))

Regular bi-weekly workshop. That item always on agenda. Council gets update from staff, can take no action.

 

[Killion]

Does the COG have a meeting planned for tommorow. I found this on another site but not sure if it's real as I've heard nothing about a meeting.

Yes, thats correct, as is the schedule you found. They have Council Meetings every Tuesday evening, further inf. to be forthcoming tomorrow.

Doh!. Thanks RR. Thanks mac. Preciate it.

 

[Coach]

Regular bi-weekly workshop. That item always on agenda. Council gets update from staff, can take no action.

So they only can act at the 2 COG meetings each month. I guess there was only 1 meeting in December because of the holidays?
I gather this meeting (Tuesday) is behind closed doors.

 

[Hawker14]

Residential properties within a few miles of Jobing.com Arena are selling for an average of $30k, down 80% in value from a few years ago.

85009.

 

[Coach]

Residential properties within a few miles of Jobing.com Arena are selling for an average of $30k, down 80% in value from a few years ago.

85009.

Wow that's less than their water bill will be next year.

 

[Killion]

Residential properties within a few miles of Jobing.com Arena are selling for an average of $30k, down 80% in value from a few years ago.85009.

Ya, its brutal in a lot of places. Miami's similar. Waterfront condo's for $30,000 down from $160,000+ just a few years ago. It certainly gives pause for thought & is a rather sobering smack in the face as to just how far things have fallen, Arizona in particular being seriously hit.

 

[Hawker14]

Ya, its brutal in a lot of places. Miami's similar. Waterfront condo's for $30,000 down from $160,000+ just a few years ago. It certainly gives pause for thought & is a rather sobering smack in the face as to just how far things have fallen, Arizona in particular being seriously hit.

I'm more interested in how $3.5-5.5m is merely a retainer, and a starting point, for arena management fees, for an arena the size of Jobing, in a city the size of Glendale.

 

[Killion]

I'm more interested in how $3.5-5.5m is merely a retainer, and a starting point, for arena management fees, for an arena the size of Jobing, in a city the size of Glendale.

Then I suggest you go back about 3 pages & start reading.

 

[danishh]

canuck snowbirds must be loving those prices.

maybe hockey could survive after all. Glendale just needs to advertise in BC and Alberta.

 

[DeathToAllButMetal]

Wow that's less than their water bill will be next year.

Awesome. You win the internet for today!

Another amazing fact that really underlines how idiotic this Glendale deal truly is. Don't they have much bigger things on their plates down there? They don't have the money to throw at something like this. And before one of the diehards says "It'd be worse to let Westgate die, blah, blah, blah," please throw out some real numbers.

 

[Tommy Hawk]

Assuming the NHL would allow it, which I doubt, it would probably cost them more. For starters, they would have to come up with $170MM up front to give to the NHL to purchase the team. Then start adding on $30MM per year in losses and they've spent over $197MM in year one. 5 years later the cost could be over $300MM not including interest on any debt incurred.

The above is one of the reasons I question whether Hulsizer is really getting all that great of a deal. Are the Coyotes even worth $70MM as a non relocatable franchise? Probably not. The deal only makes sense for Hulsizer in the event that he can turn around the operation within 5 years or that he has an option to relocate the franchise after the ridiculous "management fee" subsidy runs out.

GHOST

Or he invests the 197 million management fee in his hedge fund, gets $400 mil back in 5 years and then buys the arena keeping all the profits for himself.

Runs the yotes at minimum payroll, has no players in the system, uses a bus to take them to all the games, and takes the players to all you can eat Old Country Buffet for meals, and stay at the Super 8 motels for road games.

 

[PitbulI]

There has to be something in the deal that he can relocate after 5 years. He might have to pay back a sizeable amount to cover that bond though. When Shankarow sold the Jets, he had to pay back the provincial government what they gave to cover his losses because there was a binding multi year deal that had to be broken.

I'm still wondering how COG is going to get that 100+ million dollars. The bond market just doesn't seem like it's going to give a favorable interest rate.

At some point, the mayor has to look at all the losses that will incur if the Coyotes leave compared to keeping them here for 5 more years then possibly lose them again. Someone has to sit her down and make her read the lease agreement.

You're telling me that a man like MH who would not be a very wealthy NHL owner, would make a agreement that he will keep this team in Glendale for 30 years with only a 5 year agreement that the COG will cover his losses, I mean Arena management fee?

 

[LadyStanley]

Runs the yotes at minimum payroll, has no players in the system, uses a bus to take them to all the games, and takes the players to all you can eat Old Country Buffet for meals, and stay at the Super 8 motels for road games.

Shades of Major League.


You need a minimum of 20 NHL contracts. However, you also need all your injury replacement call ups under NHL contract as well.

The NHL scheduler does not allow for a multi-day period to travel across country -- expect it to be done in one, so air is mandatory.

 

[yotesreign]

Residential properties within a few miles of Jobing.com Arena are selling for an average of $30k, down 80% in value from a few years ago.

85009.

That neighborhood is closer to downtown Phx than to jobing.com arena, is in Phoenix, not Glendale, is a 1950's neighborhood (homes in 85305 are predominately built in 1990s and later) - but sure, 8 to 12 miles from jobing.com there are some cheap neighborhoods.

Residential properties in 85305 (job's zip code) within one mile of jobing.com over the last four months, have been selling for a median of $140,000, down 25% from six years ago. Nothing to rejoice over, but not as dire a situation as many neighborhoods in Maricopa County (or Pinal County for that matter).

But, if you would you say a neighborhood that is 8 to 12 miles away (from closest to farthest from jobing.com) in another city and one of the worst neighborhoods in the Valley (in terms of price and retention of price) is more descriptive of the circumstances near jobing.com than the neighborhood and city the arena is in... at least you're doing it in the right place, where any knocks on Glendale will be warmly received.

 

[RAgIn]

Don't you get the feeling that if the bonds don't go to market within then next two weeks that the NHL might tell the COG that it's over. Time is over. They've had since mid December to finish this. However, there's more than meets the eye to this situation and that might be the sticking point to the deal. I say, they have 2 weeks to finalize, then all bets are off.

 

[Whileee]

There has to be something in the deal that he can relocate after 5 years. He might have to pay back a sizeable amount to cover that bond though. When Shankarow sold the Jets, he had to pay back the provincial government what they gave to cover his losses because there was a binding multi year deal that had to be broken.

I'm still wondering how COG is going to get that 100+ million dollars. The bond market just doesn't seem like it's going to give a favorable interest rate.

At some point, the mayor has to look at all the losses that will incur if the Coyotes leave compared to keeping them here for 5 more years then possibly lose them again. Someone has to sit her down and make her read the lease agreement.

You're telling me that a man like MH who would not be a very wealthy NHL owner, would make a agreement that he will keep this team in Glendale for 30 years with only a 5 year agreement that the COG will cover his losses, I mean Arena management fee?

I believe that the lease agreement explicitly mentions that the "arena management fee" will be renegotiated after the initial 5.5 years and up to $97 million. It seems very likely that Hulsizer will demand and receive continued "arena management fees" for the duration of the lease (i.e. beyond the initial 5 years). The COG have optimistically pegged these costs at $24.4 million, which assumes that there will be essentially NO arena management fees after 10 years. (I guess the cost of running an arena will disappear in the future). Even if the COG is able to convince Hulsizer to forego all future arena management fees beyond ten years, the total projected cost over 10 years is about that amount $121 million. If after 5 years Hulsizer is able to negotiate even a modest $3-5 million over the remaining 25 years of the lease, the total cost over the life of the lease just for arena management fees would be in the range of $180-220 million. So I guess the income from the new Westgate CFD is already spoken for, notwithstanding the costs associated with the $125 million bond issue.

If the City of Glendale wants to give an honest cost-benefit analysis of the Coyotes lease transaction, I think that they need to do the following:

1) Fully cost the $100 million bond issue, based on the interest rate return. They should probably also cost out the additional $25 million in the bond issue, though we are not sure of the purpose of that money.

2) Provide a more realistic scenario and/or range of future parking revenues, based not only on Hocking's analysis but also on Walker's analyses.

3) Either make a more realistic projection of the future costs of the "arena management fees", or explicitly negotiate now with Hulsizer the long-term fee schedule to confirm that it will be no more than $24.4 million over the life of the lease after the initial $97 million as they project.

 

[David_99]

I think it's fair to say we all feel the same way. Would be great to fall asleep and not wake up until...wait for it...Feb. 15th.

Question: Would the CoG giving MH a simple Valentines Day box of chocolate(covered diamonds) be against the gift clause?

 

[Dado]

"Within 8 to 12 miles" of Vancouver, $30k might buy you a parking spot.

There is no positive way to spin that - by N.A. standards a neighborhood that poor is a slum. I knew Cleveland had areas like that. And Detroit. But those are old rust belt cities.

Didn't know Phoenix did - that's news.

 

[cbcwpg]

Don't you get the feeling that if the bonds don't go to market within then next two weeks that the NHL might tell the COG that it's over. Time is over. They've had since mid December to finish this. However, there's more than meets the eye to this situation and that might be the sticking point to the deal. I say, they have 2 weeks to finalize, then all bets are off.

One does get the feeling a deadline is approaching. The light at the end of that tunnel might just be a train.

I'm sure this has been suggested before, but maybe Hulsizer should just buy the $100M in bonds. That way, he not only gets the team, but he also makes 8% ( or whatever ) on owning the bonds.

 

[OthmarAmmann]

I think it's fair to say we all feel the same way. Would be great to fall asleep and not wake up until...wait for it...Feb. 15th.

Two weeks!

 

[bacon25]

So in one sentence can someone tell me why this deal has not gone through yet? Why hasn't the COG or Hulsizer come out with a message or interview saying that this deal with finally close on such and such date?

 

[PitbulI]

One does get the feeling a deadline is approaching. The light at the end of that tunnel might just be a train.

I'm sure this has been suggested before, but maybe Hulsizer should just buy the $100M in bonds. That way, he not only gets the team, but he also makes 8% ( or whatever ) on owning the bonds.

With all the bond defaults that could occur in the near future, I'm not sure MH would like to play that game.

Anyone know of the other partners that are in this ownership group? Ice Edge was willing to spend 170 million last year but didn't get funding. How much of the 70 million will be paid for by Ice Edge?

You would almost think that the 100 million bond will fail, then MH or Ice Edge will come up with half that cost so the COG can try a 50 million dollar bond which has a much better chance of selling.