Phoenix XXIII - Bond: The Phoenix Project

[goyotes]

It's become fairly clear that the COG actually selling the bonds is a bit of a hail mary as investors are staying away for a variety of reasons. I think the more interesting factor is that rather than the COG just admitting that their end around didn't work and that their deal won't work as is, they're trying to pass the buck to blame the GWI as if the GWI is the only reason why people don't want to buy. The interest rate and the reports from all of the reputable sources of bond information like Moody's go hand in hand.

If anything, GWI will probably end up saving the COG some money as they won't have to pay back nearly half a billion dollars in interest and principle. In fact, if the bonds sell at 9%, it will actually cost the COG more than their "worst case scenario" of the arena getting boarded up while they move the entire COG five miles down the road.

Actually, if MH can be believed, I think your wrong. I think the bonds can be sold, but the interest rate right now is too high. Everything has a price.

 

[CasualFan]

For Informational Purposes:

Turken v Gordon (City North) Timeline

- March 7, 2007
Phoenix City Council adopts Ordinance S-33743 denominated “An Ordinance Adopting Findings; Authorizing the City Manager to Enter Into a Parking Space Agreement with Thomas J. Klutznick Company for City North; and Authorizing the City Controller to Disburse Funds.â€

- July 3, 2007
Phoenix City Contract No. 121803, denominated “Parking Space Development and Use Agreement†was executed by Donald L. Maxwell, Director of the Community and Economic Development Department, on behalf of Defendant Fairbanks and the City of Phoenix; and by Steven R. Rudolph, authorized representative of NPP City North, LLC, a Delaware limited liability company.

- August 8, 2007
Goldwater Institute files complaint with Maricopa Superior County Court.

Note on Payments by City: Phoenix was not obligated to begin parking lot payments until 1.2 million square feet of retail space has been completed and is open for business.

Source: SUPERIOR COURT OF ARIZONA FOR THE COUNTY OF MARICOPA

 

[Fugu]

Let me ask you, after the thousands of recent posts, and the hundreds of pages of documents we have all reviewed in our spare time, do you really believe that the GWI lacks the information necessary to determine whether this transaction is unconstitutional? I found that exceptionally diffficult to believe personally. I also am of the opinion that the GWI is doing what they can to kill this deal because they don't like it from a policy standpoint. If it was unconstitutional, the GWI would be in court today seeking an injuction to stop the City from selling bonds to secure the sale of the team. Because, it is only their action at this point that is the only chance there is to prevent this from closing.

So far, on this issue, the GWI has proven itself to be a paper tiger.

I think what they lack is the evidence they would submit if they filed with a court. They require Glendale's original and approved documentation of all relevant agreements.

Glendale has yet to transfer everything that GWI believes exists (and for which a request has been put in via the Freedom of Info act).

Why don't you address why Glendale has taken so long to provide documents that it must legally make available to the public? This isn't a privately owned corporation after all, but an elected government.

 

[roccerfeller]

For Informational Purposes:

I see.

So this information implies then that GWI may wait until bonds sell before they file suit?

 

[davemac1313]

I think the council authorized a sale of the bonds and the City ordinance allows up to 9%. I'm sure the CoG will try and get the best rate they can, which is why there is so much out there now about the GWI needing to back off. As to the higher interest rate going to a gift, I don't think the GWI can make that claim given they would be at least one of the greatest factors in why the bonds sold at a higher rate. I'm sure the CoG would bring in experts that the GWI would have a hard time rebutting that would testify that the cloud of the GWI's litigation threat was the factor in raising the interest rate.

Having said that, I'm not completely sure that a court will not take into consideration the interest rate when looking at whether what the City was paying was grossly disproportionate the what direct benefits it was receiving.

I don't think that someone questioning a gift would be considered a mitigating factor in the get vs give requirement and a factor of justification. If it got to the point where get vs give is now not justified and the COG went ahead and sold the bonds, wouldn't they be more complicit in court than any argument against GWI. Shouldn't they try to go back to the drawing board? so as not to knowingly violate the gift clause? We both know where that leaves them, at this stage of the game, however if they go ahead they don't have much of a case that GW caused it, rather it would be GW made me do it and I don't think thats a winning case.

 

[Fugu]

They haven't sold as yet, despite many assurances they would be offered previously. Do you think that COG could be leery of the increased cost due to a higher rate and is hesitant to commit? They have to see the higher rate makes this tougher for them to show they get more than they give? Yes?

My feeling is that the current rate is higher than even the 9% approved by the city-- hence the delay and demands that GWI back off.

According to one report, JPM was putting the bonds out for subscription, which is different than offering. Subscription is to gauge interest in the bonds. IF it is taking this long, must not be a lot of interest in the bonds.

Based on Othmar's calculations, 6.8% is a good starting point based on actual market feedback (State of IL); however CoG had been predicating the entire float on their earlier 5-6% projections. When they realized that wasn't going to work, the retrenched and approved up to 9% (per the info from CasualFan and GSC).

I think MH gave it away with that $100m additional debt that would arise, which even with a starting point of 5-6% puts the going rate at ~10-11%.

 

[RAgIn]

More from Sunnucks:

Hulsizer said Monday that he doesn’t want a fight with Goldwater. If the institute believes the deal is illegal it should sue.

“We don’t want to do an unlawful deal,†Hulsizer said in a telephone interview.

Hulsizer said he met with Goldwater leadership and attorneys a couple of months ago to discuss his deal with Glendale.

He did pose the question of what Goldwater suggests Glendale do with Jobing.com Arena if the Coyotes deal falls apart and the team moves. And if Glendale’s deal is so good why aren’t more buyers stepping forward?

http://www.bizjournals.com/phoenix/news/2011/02/28/hulsizer-goldwater-spar-on-coyotes.html

 

[AllByDesign]

I think MH gave it away with that $100m additional debt that would arise, which even with a starting point of 5-6% puts the going rate at ~10-11%.

Starting to get into sub-prime lending at those rates. In the personal finance industry, sub prime car loans have a 50/50 split of default. Looks like the COG is spending Cadillac prices on a Pinto.

 

[Brodie]

Matt sure likes to talk, doesn't he? Back off (unless you think it's unconstitutional). Closing is imminent (unless the team relocates).

 

[goyotes]

I think what they lack is the evidence they would submit if they filed with a court. They require Glendale's original and approved documentation of all relevant agreements.

Glendale has yet to transfer everything that GWI believes exists (and for which a request has been put in via the Freedom of Info act).

Why don't you address why Glendale has taken so long to provide documents that it must legally make available to the public? This isn't a privately owned corporation after all, but an elected government.

My response would be consistent with what MH said. The CoG should have given the document to them earlier.

They don't need signed documents, however, if their intention is to stop the sale of the bonds, since it is the bond sale that allegedly causes the taxpayers' harm. There is no Catch-22 here. They could sue to stop the deal if they can demonstrate, based upon the already available public documents, most importantly the bond offering, that the contemplated deal is in violation of the constitution. Other than gamesmenship, and the need to avoid posting their own bond if they sue for an injuction and lose on the merits later, there is no good reason to not bring suit if the deal is, in their opinion, unconstitutional.

Again, do you really think they lack the information to make that evaluation? Really....

 

[CasualFan]

I see.

So this information implies then that GWI may wait until bonds sell before they file suit?

If we want to draw a loose comparison:

- December 14, 2010
Glendale adopts Ordinance No. 2757 Authorizing and directing the execution of Arena Management and Use Agreement and Non-Relocation Agreement. Glendale adopts Ordinance No. 2758 Authorizing bond sale.

- ????
Glendale executes contracts authorized on December 14, 2010.

If the contracts have been executed, I am not aware of it. I defer to anyone who is rigorously following Glendale public records if that is inaccurate.

Additionally, we can see that Goldwater required a month following the execution of agreements to prepare a filing on a case that hindsight shows they had teed up perfectly.

To suggest that Goldwater has everything they need to file a complaint immediately, or worse, is purposely neglecting to file in favor of attempting to disrupt the deal is an imprudent thought to say the least. It also belies the fact that Glendale has been, as ruled by Judge Burke, guilty of failing to provide Goldwater the public records the required to analyze the deal.

 

[AllByDesign]

My response would be consistent with what MH said. The CoG should have given the document to them earlier.

They don't need signed documents, however, if their intention is to stop the sale of the bonds, since it is the bond sale that allegedly causes the taxpayers' harm. There is no Catch-22 here.

They have never stated which aspect was to cause harm. It has been the opinion of many of us here that the violation of the gift clause is within the Arena Management fee, not the parking rights issue. Since the Bonds are tied directly to the parking rights purchase, Goldwater has no standing on the Bond issue. If the COG claims that they are being damaged from the threat of litigation, it is collateral damage.

In order to challenge the Arena Management fee they need a signed and registered AMULA.

 

[JetFan4Ever]

My response would be consistent with what MH said. The CoG should have given the document to them earlier.

They don't need signed documents, however, if their intention is to stop the sale of the bonds, since it is the bond sale that allegedly causes the taxpayers' harm. There is no Catch-22 here. They could sue to stop the deal if they can demonstrate, based upon the already available public documents, most importantly the bond offering, that the contemplated deal is in violation of the constitution. Other than gamesmenship, and the need to avoid posting their own bond if they sue for an injuction and lose on the merits later, there is no good reason to not bring suit if the deal is, in their opinion, unconstitutional.

Again, do you really think they lack the information to make that evaluation? Really....

Along with the bonds, I think there are other componants to the deal that GWI objects to. This may be why they have not sued yet.

 

[davemac1313]

My response would be consistent with what MH said. The CoG should have given the document to them earlier.

They don't need signed documents, however, if their intention is to stop the sale of the bonds, since it is the bond sale that allegedly causes the taxpayers' harm. There is no Catch-22 here. They could sue to stop the deal if they can demonstrate, based upon the already available public documents, most importantly the bond offering, that the contemplated deal is in violation of the constitution. Other than gamesmenship, and the need to avoid posting their own bond if they sue for an injuction and lose on the merits later, there is no good reason to not bring suit if the deal is, in their opinion, unconstitutional.

Again, do you really think they lack the information to make that evaluation? Really....

If they go ahead based on MH's comments on cost, are they not perpetuating a perceived gift and in fact making it a gift? The get vs give requirement? I mean 278 on the bonds + 160 left on the arena + the interest on the arena exceeds the 500 million total they lose if the yotes leave even without the management fee factor. That is the COG's stated impact if they leave. They already admit the arena loses money as well. they can't sign off on this and avoid gift violation without a much lower interest rate. Looks to me COG is in a catch 22. Yes?

 

[David_99]

Again, do you really think they lack the information to make that evaluation? Really....

They say they still haven't received everything they wanted from CoG. What's wrong with wanting to cover all their bases? Again, where does the other $97 mil come from? If that part of the deal is still left blank, how can GW know everything they need to?

 

[MAROONSRoad]

My response would be consistent with what MH said. The CoG should have given the document to them earlier.

They don't need signed documents, however, if their intention is to stop the sale of the bonds, since it is the bond sale that allegedly causes the taxpayers' harm. There is no Catch-22 here. They could sue to stop the deal if they can demonstrate, based upon the already available public documents, most importantly the bond offering, that the contemplated deal is in violation of the constitution. Other than gamesmenship, and the need to avoid posting their own bond if they sue for an injuction and lose on the merits later, there is no good reason to not bring suit if the deal is, in their opinion, unconstitutional.

Again, do you really think they lack the information to make that evaluation? Really....

Why should GWI take action according to COG's or MH's timetable. You call it "gamesmenship." I'm sure they see it as part of their overall strategy -- to kill the deal. Or are you suggesting that GWI is making a tactical error in trying to kill the deal by not acting now?

GHOST

 

[ATHF]

Actually, if MH can be believed, I think your wrong. I think the bonds can be sold, but the interest rate right now is too high. Everything has a price.

You could have just stopped talking right there. Judging from his snake oil salesman's grin and his loose lips, I think that Hulsizer will tell anyone whatever they want to hear to try to get this deal through. That way, he can gain an asset for roughly a third down payment and sell it at full price whenever he thinks he can make the most while someone else foots the bill for the rest of his purchase and recieves none of the profits when he sells.

 

[aj8000]

Again, do you really think they lack the information to make that evaluation? Really....

My take,

1) The GWI, based on the documents they already have at the moment, feel that the deal is on the wrong side of the law and are ready to sue.

2) I also believe that the GWI is not out to send the Yotes packing from Glendale and knows that a lawsuit will kill the deal immediately

3) The COG keeps insisting that the deal is on side and wants the GWI to drop the case.

4) Based on the above, the GWI, has not filed suit and keeps telling the COG to prove it.

5) Considering the GWI is still receiving documents from the COG, I do not think the COG would have a case against the GWI in respect to delaying the suit and causing harm to the COG. If the COG gave everything to the GWI in December and the GWI was still delaying, then I would tend to agree with you.

 

[davemac1313]

The city of Glendale declined comment on Hulsizer’s statements last night.

Read more: Hulsizer, Goldwater Institute spar on Phoenix Coyotes bonds | Phoenix Business Journal

Does it mean anything that the COG won't comment on this, on the record so to speak, or is this just standard for COG. Memory serves me Julie Frisoni usually has something to say when the press calls. All the GWI rhetoric over Bond rate has come from the AZ Central and MH, yet COG remains silent despite the fact that they are the most invested party in the Bond sale. Would not positive comments regarding the deal benefit them through the interest rate so a comment or some posturing be beneficial?

 

[blues10]

Matt sure likes to talk, doesn't he? Back off (unless you think it's unconstitutional). Closing is imminent (unless the team relocates).

I must say I am really enjoying what is playing out in the media right now and TSN remains oblivious to this story. I can only imagine what is going on behind the scenes. Good to see Hulsizer joining the war of words. Hopefully the COG chimes in soon. They are awfully quiet. I imagine and speculate that they are carefully crafting a plan b to keep the sale going. One way or another things seem to be heating up. Too bad Hulsizer hadn't been making comments earlier in this drama other than "two weeks" and " imminent". No comment from the NHL today? Not surprising as it was trade deadline day.

 

[ATHF]

Double post when the boards went a little schizo for a minute, but I also find it interesting that the COG, who have seemingly not hesitated to issue press releases or statements when IEH, JR or MH pass gas, have nothing to say at all about the developments of the past few days. Not sure why they've decided to go quiet now though. It's not like them putting their foot in their mouth again is going to make things any worse....

 

[AllByDesign]

Does it mean anything that the COG won't comment on this, on the record so to speak, or is this just standard for COG. Memory serves me Julie Frisoni usually has something to say when the press calls.

You'd think a quick "We agree with Matthew that this will close this week" would have been tossed out there.

I must say I am really enjoying what is playing out in the media right now and TSN remains oblivious to this story. I can only imagine what is going on behind the scenes.

TSN puts a lot of production and emphasis on the trade deadline with their annual "Tradecentre". I wouldn't expect they would want to take any focus away from the days events. Once the dust settles, I would bet they start joining the story already in progress.

 

[kdb209]

Part XXIII: The Phoenix post-Bankruptcy saga has now exceeded the Phoenix Bankruptcy soap opera.

Be with us next time for "Brother, Can you spare a dime" or "The Phlight of the Phoenix"

12-08-2008 Hockey in The Desert (Phoenix franchise and finance/business matters)
02-04-2009 Hockey in the Desert II (Phoenix Coyotes franchise and business matters)

05-05-2009 Balsillie puts in $212.5 mil offer for the Coyotes
05-07-2009 Balsillie/Phoenix part II
05-18-2009 Balsillie/Phoenix part III
05-22-2009 Balsillie/Phoenix part IV
06-03-2009 Balsillie/Phoenix part V
06-09-2009 Balsillie/Phoenix Part VI
06-12-2009 Balsillie/Phoenix Part VII: I'm just waitin' on a judge
06-16-2009 Balsillie/Phoenix Part VIII: It's dead, Jim
06-24-2009 Balsillie/Phoenix Part IX: 'Dorf on Hockey
07-25-2009 Phoenix bankruptcy/ownership Part X: The Truth? You Can't Handle The Truth!
08-03-2009 Phoenix bankruptcy/ownership Part XI: A Fistful of Dollars?
08-07-2009 Phoenix bankruptcy/ownership Part XII: For a Few Dollars More
08-12-2009 Phoenix bankruptcy/ownership Part XIII: The Good, The Bad, and The Ugly
08-21-2009 Phoenix bankruptcy/ownership Part XIV: The Wrath of Baum
08-27-2009 Phoenix bankruptcy/ownership Part XV - SITREP: SNAFU
09-02-2009 Phoenix bankruptcy/ownership Part XVI: Barbarian at the Gate
09-08-2009 Phoenix bankruptcy/ownership Part XVII: Wake Me Up When September Ends
09-10-2009 Phoenix bankruptcy/ownership Part XVIII: Is that a pale horse in the distance?
09-12-2009 Phoenix bankruptcy Part XIX: How I Learned to Stop Worrying and Love the Baum
09-21-2009 Phoenix Bankruptcy Part XX: There Will Be Baum
09-28-2009Phoenix Bankruptcy Part XXI: 2009 -- A Sports Odyssey
10-26-2009 Phoenix Bankruptcy Part XXII: Long and winding road

Followed up by the ever popular:

11-24-2009 Keeping up with potential owners for NHL Phoenix Coyotes (UPD: Ice Edge signs LOI)
03-14-2010 Part II. Potential owners of NHL's Phoenix Coyotes
03-26-2010 Part III. Prospective Owners - Phoenix Coyotes (UPD Lease vote 4/13; IEH signs MOU)
04-10-2010 Part IV Phoenix Coyotes post bankrtuptcy; UPD COG approves Reinsdorf MOU, not IEH MOU
05-02-2010 Part V Phoenix Coyotes post bankruptcy UPD Reinsdorf out? IEH back in? else Winnipeg?
05-11-2010 Part VI Phoenix Coyotes post bankruptcy
05-23-2010 Part VII Phoenix Coyotes post bankrtuptcy
06-07-2010 Part VIII: Phoenix Coyotes Post-bankrtuptcy
06-07-2010 Part VIII: Phoenix Coyotes Post-bankrtuptcy
06-22-2010 Part IX: Phoenix Coyotes Post-bankruptcy UPD: Pres Moss fired 6/30 with IEH input
07-26-2010 Part X: Phoenix Coyotes - Between Scylla and Charybdis
08-27-2010 Part XI: Phoenix Coyotes -- Greetings, Starfighter, You have been selected ...
09-16-2010 Part XII: Phx Coyotes - Still haven't found what I'm looking for
10-12-2010 Part XIII: Phoenix Coyotes - The Final Cut?
10-27-2010 Part XIV: Phoenix Coyotes - To Infinity And Beyond....
12-05-2010 Part XV: Phoenix - the battle of evermore
12-14-2010 Part XVI: Phoenix -- Money for Nothing
12-20-2010 Part XVII: Phoenix -- Thread Title Available For Lease
01-09-2011 Part XVIII: Phoenix -- Imminence Front
01-24-2011 Phoenix XIXth: Nervous Breakdown
02-02-2011 Phoenix XX: Two weeks
02-11-2011 Phoenix XXI: When will then be now?
02-22-2011 Phoenix XXII: It's Now or Never
02-28-2011 Phoenix XXIII - Bond: The Phoenix Project

 

[pegcity]

You'd think a quick "We agree with Matthew that this will close this week" would have been tossed out there.



TSN puts a lot of production and emphasis on the trade deadline with their annual "Tradecentre". I wouldn't expect they would want to take any focus away from the days events. Once the dust settles, I would bet they start joining the story already in progress.

I noticed that too. TSN has completely lost interest in the story.

I wounder if the casual fan has lost interest in the sale, "Wake me up when it's over" or maybe TSN thinks the station will lose credibility if it comments on every little detail. Just look at this board from week to week to see the sway in opinion. I'm pretty sure most of us thought the sale was close to being done when the Thrashers co-owner sent out his SOS signal.

 

[JetFan4Ever]

I have just learned that Justin Bieber is on tour. Maybe Scruggs and the other yes voting members all have a very bad case of Bieber Fever. This could be causing their irrational thoughts/actions.