It has been 17 years and 210 days since the city’s pledge to build the West Branch Library.
Nearly all major battles we face seem to revolve around either love or money. In the case of the Coyotes vs. Glendale it’s definitely money. Before I post a blog on the current deal between these entities it’s important to understand the effects of the biggest driver — money.
Westgate and its sales tax revenue is an important component. It cannot be denied that the majority driver of retail sales tax revenue in Westgate comes from Tanger Outlets. Before Tanger’s opening in November of 2012 retail sales tax revenue was under a million dollars a year. Tanger, when it opened, was projected to earn $2M in sales tax revenue and in fact, from the start, has generated closer to the $2.5M mark.
As you can see from the chart below in calendar years 2013 and 2014 retail sales tax revenue was over $3.5M and almost all of it is attributable to Tanger. In October of 2014 Tanger expanded and the city can now expect an estimated $4.5M in retail sales tax revenue in 2015. Restaurant/Bar sales tax revenue has also increased over time and can be related to football games, hockey games and concerts held at the University of Phoenix Stadium and the Gila River Arena. This component is also attributable to the opening of new restaurants in Westgate. This sales tax revenue has grown as well and is estimated to earn some $3M. “Other” sales tax revenue is composed of bed tax, AZSTA stadium city sales tax, licenses & permits, etc. It is estimated to earn about $5M in 2015.
In 2015 estimated sales tax revenue from Westgate looks like this: Retail — $4 to $4.5M; Restaurant/Bar — $3 to $3.5M; and “Other” — $4.5 to $5M.
The argument often used by Coyotes’ supporters is that the spillover effect from 42 nights of hockey games is essential to Westgate’s restaurants and bars survival and to the city. How much of that spillover is from 70,000 fans attending each of 10 football games? Admittedly it is substantial and could account for anywhere from 1/3 to ½ of the sales tax revenue generated from restaurants and bars annually.
The point is that Westgate has grown despite all of the drama and turmoil of the Coyotes and is strong enough to survive with or without them. If one looks at all of the factors that determine annual sales tax generation at Westgate the Coyotes (from hotel stays and restaurants/bars) are estimated at driving about $2M a year out of a total estimated annual sales tax revenue of a low of $11.5M to a high of $13M.
As long as we are on the subject of money there is another factor to consider. Many Coyotes fans are hoping that the Coyotes will move to downtown Phoenix or a new arena at Talking Stick. Dan Bickley in a recent July 26, 2015 Arizona Republic story entitled Coyotes not out of the woods – or Glendale – just yet said, “Sarver says his Suns pay $23 million a year just to play at US Airways Center: $12 million in debt service, $8 million in arena management costs and $3 million in rent. A new arena capable of housing a NBA team and a NHL franchise starts at $500 million, and that’s being conservative.” Kudos to Robert Sarver for publicly offering some expense figures (no revenue figures, mind you). That’s more than anyone has seen from the Coyotes. Any public figures associated with the Coyotes have been minimized or denied by Anthony LeBlanc, an owner and visible spokesperson for the ownership group.
The question for the Coyotes becomes can they afford to move anywhere? Sarver is not in the charity business and I suspect that the owners of Talking Stick are not either. All bets are off if the Coyotes move out of Arizona. Is there an entity out there willing to pay the Coyotes to play in a newly constructed arena? Who knows? The Coyotes will have to pay to play anywhere else in Arizona and as long as they continue to suffer losses of an undetermined amount their options are very limited. No one is offering any love to the Coyotes these days and their entire future is being driven by only one thing – money.
© Joyce Clark, 2015
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