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Joyce Clark Unfiltered

For "the rest of the story"

It has been 18 years and 75 days since the city’s pledge to build the West Branch Library.

On February 26, 2016 Arizona Sports ran a story on Anthony LeBlanc’s reaction to Mayor Jerry Weiers’ remarks at his State of the City address. Here is the link:  http://arizonasports.com/story/566510/arizona-coyotes-ceo-glendale-may-want-us-to-stay-but-not-being-realistic/ .

In his prepared remarks with reference to the Coyotes the Mayor said, “I need to be clear about this. I want the Coyotes to stay in Glendale. The city wants the Coyotes to remain in Glendale. We have, since day-one, invited them to remain engaged in this process.”  In his recent remarks Mr. LeBlanc said this about the Coyotes’ refusal to engage in the bid process to manage Glendale’s arena, “…the team did not submit a bid to manage the arena because it refused to participate in a ‘flawed process’.” LeBlanc did not elaborate on his characterization of a “flawed process.”

Mr. LeBlanc went on to say, “I think they do want us to stay, but I don’t think they’re looking through a realistic lens of what that means.” Translate this statement to read that in his view “a realistic lens of what that means” is the Coyotes would only stay if Glendale continues to subsidize a portion of their annual loss. LeBlanc, et. al., may have retired their Fortress loan by adding additional owners but don’t forget they still owe a boat load of money to the NHL for another loan that covered buying the team.

What governmental entity is not only going to build a new hockey arena but also subsidize the Coyotes’ annual loss? It’s Glendale all over again. Tempe? Scottsdale? Probably not. Phoenix? Perhaps it can bury its subsidization of the Coyotes within possible plans to build a new facility for joint use by the Suns and the Coyotes.

The Coyotes want to manage their own facility. Then they collect all of the revenue generated by non-hockey events and they can claim a management fee that not only covers their cost to manage but off-sets their annual loss.

LeBlanc praised a recently approved deal between Broward County, Florida and the NHL Florida Panthers. The deal allows the Panthers to get nearly all of the arena revenue and reduces any profit-sharing between the Panthers and the county. Since the Panthers first season in 1993-94 the Broward county’s public subsidy of the team has been $342 million (an estimated $14 million a year). It should be noted that the Panthers lost $36 million last year and another $27 million the previous year. Of course LeBlanc would think that’s a wonderful deal. Reality is that the majority of NHL teams can’t survive without public financial support. That has been the model for years but many governmental entities are under financial pressure and can no longer afford this type of model. It is a model destined to die in the future as the public clamors for sports franchises to pay their own way.

LeBlanc said three options are still being discussed. They are a shared arena with the Phoenix Suns in downtown, a partnership with Arizona State University or an arena in Scottsdale’s Loop 101 corridor. Hey, if the City of Phoenix wants to pony up and pay the Coyotes to play downtown, congratulations to all. Previously the Suns and the Coyotes shared an arena downtown and it was the fans who suffered with terrible sight lines while watching the games.

Is the Arizona State Legislature delusional? It has budget problems. Will it allow a portion of its allocation of state public money to be used to pay for a new hockey arena instead of educational purposes? It seems doubtful that Scottsdale will wish to pay the Coyotes to play in their town. It would be déjà vu as they refused to do so in 2001.

LeBlanc said if a new arena is built it will take at least three years. He went on to say they would “rather not move twice in five years.” Here is where the situation becomes problematical. Glendale and IceArizona currently have a two year agreement that allows IceArizona to manage the arena for $6 million per year. The first year of that agreement is nearly up leaving only one more year of IceArizona’s management. After that it is assumed AEG, the presumed new arena manager, and IceArizona will have to negotiate short-term tenancy for two more years. Will they be able to craft a mutually satisfactory tenancy arrangement? Then the question becomes if IceArizona can live with the deal for two years, why can’t it live with the deal permanently? Can LeBlanc and company afford to rebuild its fan base in another part of the Valley while it continues to rebuild the team?

No matter what the outcome I continue to have greatest respect and admiration for the players. They have endured a great deal since Jerry Moyes put the team into bankruptcy in 2009. They are a great group of men who certainly deserve more stability than they have had. They deserve better. Let’s see if cooler heads can prevail and a deal that benefits all entities can be achieved permanently. Isn’t it time?

© Joyce Clark, 2016

 FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 18 years and 68 days since the city’s pledge to build the West Branch Library.

City council held its first budget workshop on February 16, 2016. Here is the schedule of future budget workshops:

  • March 15, 2016             9 AM
  • April 5, 2016                 9 AM
  • April 19, 2016               9 AM
  • April 21, 2016               9 AM

This first budget workshop was a review of all budget components as of December 31, 2015 or the first two quarters of Fiscal Year 2016. The only item which required council consensus for direction was the issue of raising the Secondary Property Tax rate to the maximum of 2% as allowed by state law. Council consensus was…nothing. They gave no direction to staff. Look for the vote on acceptance of a property tax rate in June when council must publicly vote on the issue.

Senior staff’s presentation on the budget’s performance was pure “government speak.” Here’s a good example, “(General Fund) Revenues are $11.2 million or 11% higher than revenues at the same time last year.” Boy, that sounds really, really good. Wait a minute. Staff then said, “Out of the $11.2 million increase in revenues, $8.3 million is due to consolidation of the general fund sub-funds into the General Fund.”

In plain English what that statement means is this. General fund sub-funds are the Arena, Camelback Ranch, Zanjero, Civic Center and Stadium events. This is not a complete list but you get the idea. Prior to this Fiscal Year, 2015-16, the sub-funds stood separately. Staff had to report on the revenues received and expenditures of all sub-funds. This Fiscal year they were rolled into the General Fund for “accounting purposes.” No longer is there a separate accounting of the sub-funds’ performance. Hmmm.

Staff went on to say, “General Fund City Sales Tax collections are $48 million which is an increase of $7.3 million or 18% over the same time last year. Approximately $6.0 million of the increase is attributable to the consolidation the sub-funds into the general fund. Without including the sub-fund revenues, city sales tax increased by $1.3 million or 3%.” This 3% figure is in line with the federal GDP.

In terms of General Fund expenditures staff reported, “The actual (General Fund) expenditures increased by $15.4 million over the same time last year. This increase is primarily due to the consolidation of the general fund sub-funds into the General Fund ($9.7 million) and reclassification of Technology and Technology Projects ($5.0 million)…” Once again most of the expenditures are attributable to rolling the sub-funds into the General Fund.

The bottom line is this. Half way through Fiscal Year 2015-16 the General Fund has an excess of $8.3 million. It can be assumed that this excess is due in great measure to the $9.0 million reduction (from the previous figure of $15 million) in the arena management fee paid to IceArizona.

Tonight, February 23, 2016 city council will host its regular voting meeting. Guess who will be AWOL? Yep, Councilmember Sammy Chavira…once again. Be reassured. He will participate telephonically.

Three agenda items are worth following: Item 20 is Resolution 5071. It is an acceptance of a $49,000 grant from the Arizona Sports and Tourism Authority to be used to help develop an archery range at Heroes Park; Item 21 is acceptance of Ordinance 2975 reflecting rezoning request ZON15-10. This action will allow for development of the Westgate Healthcare Campus PAD at the northwest corner of 99th Avenue and Glendale Avenue. This is a very welcome project and provides a fantastic compliment to Dignity’s Westgate Hospital Campus just north of this proposed project; and lastly Item 22. Council will vote on the adoption of the Loop 101 Scenic Corridor in north Glendale. This is another very welcome development that warrants expansion of this designation all along the Loop 101 within Glendale with the only exception being a narrowly tailored Westgate area.

Stay tuned for more reports on Glendale’s budget as council meets in March and April of 2016.

Don’t forget…it’s budget season in Glendale.

© Joyce Clark, 2016

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 18 years and 49 days since the city’s pledge to build the West Branch Library.

The City of Glendale received 3 bids to manage its arena. The bids were from AEG Facilities, Comcast Spectacor and SMG. All are extremely reputable, large national companies, experienced in operating venues throughout the country. After senior management reviewed all 3 bids it recommended AEG to the city council. All of the discussion with council was done in executive session and the public is not privy to those discussions. On January 2, 2016 in its executive session council approved AEG and directed staff to negotiate a final contract over the next 60 days.

It is a very positive development. AEG can add another premier venue to its portfolio that is sure to benefit Glendale when AEG negotiates packages of venues with performers. It had previous experience operating the Gila River Arena from 2006 – 2009 and during that period it acquired some major performers: one that comes to mind is Bruce Springstein. It manages over 120 facilities worldwide and the majority is located in the United States.

What does that mean for the Coyotes? I, and many others, remain hopeful that AEG and IceArizona can negotiate a deal that benefits both. That still is the best option for all parties: the city, IceArizona and AEG. Anthony LeBlanc, an owner of IceArizona and its spokesperson, continues to play poker when discussing the situation with such recent comments as, “The good news is that all of the discussions we have had have been pretty open as have other organizations — be it the city of Phoenix or Tempe or Arizona State. Everybody has been pretty open that we have had discussions with and they have all been positive (www.arizonasports.com, Rodney Haas).” If this is his attempt to raise the ante with Glendale or AEG it doesn’t seem to be working. One has only to look back upon his previous history of blustery statements that were found to be less than forthcoming.

If the Coyotes are serious about moving there are still major hurdles to overcome. A new facility would not be available for at least 3 years. No matter whether is it Phoenix, Tempe or Timbuktu, pesky voters will have to be swayed to support the construction of yet another sports venue. Voters are becoming more discerning and will question the value of diverting precious tax revenue away from community needs and to another subsidized sports facility. In today’s day and age, it is not an easy sell as it once was.

Then there is the issue of location…location…location. Larry Feiner, a Coyotes fan, recently tweeted the results of an informal poll he did about the difficulty of the commute. His responses were split right down the middle, 50/50. Those fans who live in the east valley consider the commute to Glendale a hassle. Those fans who live in the west valley consider the commute to the east valley a hassle. The question for the Coyotes is will the ticket holders they pick up from the east valley offset the losses of west valley fans? All of the good will created among west valley fans could be lost. That is a question only the Coyotes will be able to answer. For the past 10 years the Coyotes have had a home in the west valley and it has served them and their fans well. It is a wonderful facility build exclusively for hockey. It is not to be dismissed lightly in a pique of anger because the city is no longer subsidizing losses to the tune of $15 million dollars a year.

I remain positive and believe that a successful accommodation can be achieved between all parties. Can the Coyotes?

©Joyce Clark,2016  

  FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 18 years and 23 days since the city’s pledge to build the West Branch Library.

Over the holidays there wasn’t much news about the Coyotes. Now that we are in a new year on January 7, Paul Giblin had a story in the Arizona Republic citing the results of a recent poll on the subject of a Coyotes relocation. Here is the link: http://www.azcentral.com/story/news/local/glendale/2016/01/07/poll-arizona-coyotes-should-stay-gila-river-arena-glendale/78314406/ . He reported, “Approximately 54 percent of frequent voters in Maricopa County surveyed believe the Coyotes should remain at Gila River Arena in Glendale, according to the poll that was conducted Dec. 29 for Phoenix-based public-relations firms MBQF Consulting and Marson Media.”

The problem for any other governmental agency attempting to locate the Coyotes will be to garner enough public support to pay for yet another very expensive sports facility. Thirteen years ago, in 2002, the cost to build the Gila River Arena was about $180 million dollars. The cost today to build the same type of facility has exploded. It is expected that the cost would be in the $400 million dollar range. The sixty four dollar question is can enough public support be generated in some other Valley community to use precious and scarce taxpayer dollars?

Public support would probably be found if the economy was booming and world affairs were stable. That is not the case. The economy staggers along as the middle class continues its death spiral. The general public fears more ISIS inspired events on our soil as the Middle East explodes into further turmoil while China’s stock market takes a dive and North Korea’s bomb tests reminds us that we, as a nation, are vulnerable. This is not an environment that is conducive for public sentiment to use taxpayer dollars on yet another sports facility.

Anthony LeBlanc, one of the Coyotes’ owners and apparent Public Information Officer, has had to walk back some of his previous assertions about the Coyotes.  He has hired a sports consultancy firm to assist him in his quest for a new location. It seems likely that a location in any other Valley municipality will be very difficult, if not impossible, to achieve. His only hope may be can he cut a deal for another new facility funded and built by the Gila River Pima Maricopa Indian Community? His refusal to bid for management of the Gila River Arena may come back to haunt him.

Which leads to another bit of recent news. The City of Glendale received 3 bids to manage its Gila River Arena submitted by AEG Facilities, Spectra by Comcast Spectacor and SMG. All three are “big guns” in the sports management business. All have the experience and knowledge required to successfully manage Glendale’s arena. Currently the bids are TOP SECRET. In the next few weeks Glendale’s senior management staff and city council will each receive separate briefings regarding the specifics of each proposed bid. This management deal is more complicated because the Coyotes will play in the arena for another season and it is expected the chosen management company contract would begin this July 1, 2016. That means that the preferred management company and the Coyotes would have to negotiate revenue streams for one year of Coyotes occupancy. There is always the remote possibility that a deal could be crafted comfortable enough for the Coyotes to create an incentive for them to stay at the Gila River Arena beyond their final year.

The city council may be ready to vote on an arena manager as early as February 9, 2016. If a vote is not taken around that date expect that one of the bids is in further negotiation before final acceptance. The public, as is the case with mushrooms, will be left in the dark and fed horse manure. There is no opportunity for public input in this process. While everyone understands the theory of representative government they also understand the theory of transparency. It seems that once again “father knows best” trumps the public’s right to know.

© Joyce Clark, 2016

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 336 days since the city’s pledge to build the West Branch Library.

It seems that Thanksgiving got in the way of much blog writing recently. I hope your Thanksgiving Day with family and friends was enjoyable. I hope you ate too much, laughed too much and watched too much football.

It was announced that the Coyotes hired Mitchell Ziets, CEO of Tipping Point Sports, LLC, to assist in an exploration of options for the team including a move to another venue from the Gila River Arena in Glendale. Let’s explore the reality of this option.

In a November 2, 2015 story by Craig Morgan several possible venues are offered for consideration by the Coyotes. Here is the link: http://arizonasports.com/story/436156/coyotes-in-discussions-with-at-least-three-separate-groups-for-new-valley-arena/ .

In his story Morgan offers this comment from Anthony LeBlanc, “At some point you have to make a decision that you can’t continue to talk to a wall, Coyotes co-owner, president and CEO Anthony LeBlanc said. You have to accept reality and look at what your alternatives are. That’s where we are right now.” From the time LeBlanc’s group, IceArizona, commenced its deal with Glendale for the use of its arena the Coyotes simply refused to talk to and to share information with Glendale. They were decidedly off the reservation. It has only been since the new, two-year deal was inked that IceArizona has decided to play nice with Glendale.

IceArizona may very well leave Gila River Arena in two years but options to play elsewhere in the Valley are more limited than current speculation would lead one to believe. LeBlanc admits to “conversations” with Phoenix about the possibility of a shared arena with the Phoenix Suns. Out of curiosity I checked the 2015-2016 playing schedules for both teams. Here are some comparisons:

                                                            Phoenix Suns                 Arizona Coyotes

Season                                                10/28/2015-4/13/2016     10/9/2015-4/13/2016

Number of total games                                     82                                        82

Number of home games                                   40                                        41

Out of the 40+ plus home games each team plays at its current venue, if they currently played at the same shared venue, 12 playing dates would conflict. That is ¼ or 25% of their home games. To be fair, we know that can be remedied by the leagues with a gnashing of teeth and the pulling of hair. It has worked before when the Coyotes and Suns shared a venue. One would think the Coyotes fans have warm memories of their experiences in sharing a venue with the Suns and are eagerly looking forward to do so again.

In a recent December 2, 2015 Paul Giblin story in the Arizona Republic, he cites issues that Phoenix would have to consider. Here is the link: http://www.azcentral.com/story/news/local/glendale/2015/12/02/arizona-coyotes-arizona-cardinals-wont-bid-manage-glendale-gila-river-arena/76564718/ .

  •  How much would a new arena cost? The Milwaukee Bucks’ planned new arena is pegged at $500 million.
  • How much would be privately funded? How much publicly funded? Would the public-funding source be municipal, state or some combination?
  • Can voters be sold on the idea of picking up any portion of the bill?
  • Where specifically would an arena be built?
  • When would it open?
  • Can the Suns and Coyotes work out an agreement to split revenues?

Let’s look at other possible venues. Tempe and/or Scottsdale are possible candidates. Would the voters of Tempe and/or Scottsdale approve the construction of a $180 million dollar building (cost of Gila River Arena construction in 2005) and agree to subsidize, year after year, a team that is not profitable? Remember those who do not read history are doomed to repeat it. I would think many voters would be very aware of Glendale’s history and that could certainly cause them to think twice about such a proposal.

Arizona State University has been mentioned as well. ASU receives substantial funding from the Arizona State Legislature. It is conceivable that a majority of legislators may balk at the idea of state taxpayer money being used to subsidize a for-profit company.  If ASU can fund and subsidize such a project with new, private dollars and not divert private dollars already committed for existent programs then it is possible. But wait, didn’t ASU Hockey just commit to playing its games at Gila River Arena? If that is the case, wouldn’t ASU have to build a new venue?

The last location on the menu of possibles is Talking Stick. That is certainly do-able. An Indian reservation is not subject to federal, state, county or local laws. The tribe is free to build what it wants to build on reservation land.  One has to wonder if this tribe would be willing to invest in the construction of another major venue as well as subsidizing the team in perpetuity.

There was an interesting article published on October 20,2015 by the Flordia’s Sun Sentinel regarding the NHL Florida Panthers and a Broward County proposed deal. Here is the link: http://www.sun-sentinel.com/local/broward/fl-panthers-subsidy-debate-20151020-story.html .

In some ways their deal is like comparing apples and oranges for Broward County has a population of 1.87 million people and includes 24 cities. That in itself is much different from Glendale’s population of approximately 240,000 and the fact that it is one city having to deal with a hockey arena. Some elements of their proposed deal are eerily similar to the Glendale/Coyotes deal. As of this date their deal has yet to be approved but here are some of the deal points which would expire in 2028:

  • The Panthers would continue making $5.3 million annual debt payments toward the county’s $15.3 million obligation.
  • Receive $86 million from the county, or $6.6 million a year on average, but in a schedule of front-loaded payments that starts at $12 million a year. Of the total, $39 million must be used for capital expenses at the arena, $45.5 million for operating expenses like paying the electric bill or property insurance, and $1.5 million to lure a “high impact event.”
  • Provide an irrevocable letter of credit to protect the county’s financial investment if the team defaults, files bankruptcy or relocates.
  • Grant the county development rights on land surrounding the arena, where a mixed-use entertainment complex could be considered.
  • Share proceeds with the county if the NHL expands between 2015 and 2021 and gives teams expansion proceeds. After the Panthers’ losses are covered, the county would get the remainder of the one-time expansion payment.
  • Give the county 10 percent of profits if the team, made more valuable by this new deal, were sold.
  • Give the county authority to approve where the money for capital projects is spent, and authority to replace the Panthers’ Arena Operating Company with another arena manager if needed.
  • Allow the Panthers to get out of the contract in eight years if it’s not working out. They’d have to give a year’s notice, show losses of $100 million over seven years, and pay a termination amount. For example, if the Panthers leave in year 8, they’d pay back the full $72 million the county would have given them by then.

No matter where the Coyotes end up in the Valley, whether they remain in Glendale or move to another location, their quest to be subsidized by a governmental entity is surely a public policy question deserving of much public discussion. The people of any city have a right to weigh in on the question of their tax dollars being used to subsidize a private, for-profit company.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 307 days since the city’s pledge to build the West Branch Library.

On November 3, 2015 the voters of the Sahuaro district dealt a political death blow to Councilmember Gary Sherwood by voting for Ray Malnar to replace him. The unofficial vote total has Ray Malnar winning with 53.61%. There is no doubt that Sherwood caused his own demise. How?

Sherwood was elected in November of 2012. For three years his actions and votes have raised questions. One of the major centerpieces of his campaign was his strong opposition to the Tohono O’odham casino in Glendale. As a result of his position the anti-casino forces paid for independent expenditures supporting his run. He also ran pledging fiscal conservatism in managing the city’s arena. It didn’t take him long to renege on both elements of his platform.

Within a year of his first term he reversed his position on the casino and became its strongest advocate. When asked why, his answers were consistently vague and seemed to center around learning “new information.” When queried on what information and from whom, he never offered a clear and convincing explanation. There was also the nagging assumption by many that he had swapped his positive vote of support for the casino with Councilmember Chavira’s positive vote of support for the IceArizona arena management deal.

Sherwood ran supporting his constituency’s opposition to continuing the practice of exorbitant financial payments to operate the city’s arena. Inexplicitly he advocated for the IceArizona management deal at a cost of $15 million a year. His actions in connection to this support gave rise to an alleged complaint (eventually dismissed) to the Arizona Attorney General’s office regarding his divulging of executive session information. He seemed to have developed a pattern of deliberately supporting big money interests over the voices of his constituents. It was a pattern soon to be repeated.

In the matter of Becker Billboards Sherwood was a prime advocate for their interests while he once again ignored his constituency. It left a bitter taste with his constituents and now they were becoming alarmed about his lack of support for their views. His failure to connect with his constituency became an issue of contention with the proposal to sell the Foothills Branch Library. He failed to notify them of meetings on the issue usually until the day before a scheduled public meeting. He bragged about a luncheon meeting he had arranged with the Kathleen Goeppinger, President of Midwestern University, proposed buyer of the library.

He seemed to be very proud when he declared in a council workshop meeting he had met privately with one candidate under consideration as Glendale’s new city manager, Brenda Fischer. Many people were astounded that he would have done such a thing. He was her strong advocate and after she was hired he seemed to receive preferential treatment not only from Fischer but from her inner circle, including soon-to-be Assistant City Manager Julie Frisoni. It was seemingly obvious that Sherwood and his coalition of councilmembers had the ear of Fischer and her inner circle while those who opposed Sherwood and his positions were frozen out.

Sherwood appeared to be needy…he wanted to be recognized as a “major player,” locally and regionally.  He seemed to revel in the attention he received from Anthony LeBlanc, et.al, when they were seeking approval of their arena contract. After the management contract was signed he was observed lurking about at Coyote Town Hall meetings trying to catch LeBlanc’s attention until he was recognized and praised. Did he know observers reported members of IceArizona not only ignored him after securing the contract but apparently they ridiculed him as well?

When it came to Becker billboards that stakeholder group had contributed significantly to Sherwood’s campaign and so, he seemed to reciprocate by advocating for them. Again, Sherwood seemed to ignore his constituency’s overwhelming opposition to the billboards in favor of those who generously contributed to his campaign coffers. Then there are the countless recitations by many on the 4th floor of city hall who heard Sherwood’s declarations that he was the “real” mayor of Glendale. Many city employees thought he was arrogant and dismissive of them.

The nail in the proverbial coffin was his apparent belief that he was above the law. He accumulated at least 6 driving citations in a relatively short time period and then failed to follow through in fulfilling his responsibilities for those actions eventually leading to a state-wide warrant for Failure to Appear. This issue was resolved only after it was publicly reported that he was caught with his hand in the proverbial cookie jar. In a recent press release he admitted to using city funds to rent a vehicle while driving on a suspended license and pledged to reimburse the city.

After all of his purported foibles, who wanted Sherwood to remain in office? The largest supporter of keeping Sherwood in office was Phoenix Firefighters Local 493 Fire PAC Committee (responding to the bidding of its sister Glendale union) having contributed $14,000 to an Independent PAC called Citizens for Safety and Education run by a long time fire union activist, Mike Colletto. Between October 2 and October 14, 2015 the independent committee spent $11,412.96 advocating for Sherwood’s retention. By the way, per usual, Sherwood was late in filing his latest campaign expense report. He raised nearly $40,000 ($39,810.30). Of note, that’s twice the amount that his opponent, Ray Malnar, raised ($18, 800). Sherwood’s big money contributors were: Mark Becker – $3,000 on 9/9/15; the Tohono O’odham – $6,250 on 10/8/15; Nick Wood (an attorney for IceArizona) – $1,500 on 10/8/15; Jason and Jordan Rose (Becker billboards was/is a client) – $1,000 on 10/17/15; and members of the Molera Alvarez political consulting group – $1,000 on 10/21/15 and 10/22/15. Let’s not forget PAC contributions, much of it union money, totaling $28,000:

  • Arizona Pipe Trades               $10,000                             9/11/15
  • IBEW Local 640                        1,000                              9/15/15
  • Republic Services, Inc.                 500                              9/15/15
  • Iron Workers Local 75               2,000                              9/16/15
  • Phoenix Firefighters
  • Local 493 Fire PAC                    1,000                               9/16/15
  • Surprise PRO Firefighters
  • PAC                                         2,000 (cumulative)            9/16/15
  • United West Valley
  • Firefighters                               2,500 (cumulative)           9/16/15
  • Pinnacle West PAC                        500                              9/21/15
  • Gilbert Firefighters                    4,000 (cumulative)           10/14/15
  • United Mesa
  • Firefighters                               4,500 (cumulative)           10/14/15

Why has Gary Sherwood become the first councilmember ever successfully recalled in Glendale’s history? Despite the tremendous fire union financial and manpower support as well as the financial support of “big money” interests, Sherwood ignored the voices of his constituency and demonstrated that he was apparently more willing to support the interests of those who contributed generously to his campaigns. You can be sure Sherwood will place the blame on “outside interests” such as casino opponents but Sherwood was the architect of his own political demise by making choices that seemingly benefitted him in the short term while ignoring long term consequences. He died politically by a thousand, tiny cuts self inflicted as he made choices that seemed to benefit only himself. Sherwood has no one to blame but Sherwood. He made his choices and has been made accountable for them by his district’s voters. In commenting on his loss Sherwood said he plans to run again in November of 2016. Albert Einstein once said, “Insanity is doing the same thing over and over again and expecting different results.”
Sometimes…every once in awhile…the good guys do win…

© Joyce Clark, 2015

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It has been 17 years and 256 days since the city’s pledge to build the West Branch Library.

I spent some time reading the audit of the Coyotes released by the city on September 9, 2015. Here is the link: https://www.glendaleaz.com/auditor/documents/ArenaContractComplianceReview2015.pdf . The overall sense of the audit expresses the city’s deep frustration with IceArizona’s failure to provide all of the information required by the Professional Management Services and Arena Lease Agreement (PMSA).

Here are a few of the limitations utilized by IceArizona in responding to audit requests:

  • “City staff requested that the Arena Manager provide the City’s auditors and Consultant with a copy of the Team Owner’s financial statements. The Arena Manager denied this request.”
  • “The City’s auditors also requested an independent confirmation of the Team Owner’s 2013/2014 annual operating loss. The Arena Manager’s independent external auditors denied this request.”
  • “On March 13, 2015, the Team Owner issued a notice to the City of the Team Owner’s claimed operating loss for the ‘First Certification Period,’ as defined in the PMSA. The Team Owner provided no additional backup documentation, including Team Owner financial statements, for the city to verify the claimed operating loss.”

Much of the final audit findings are no longer applicable or relevant since the city council cancelled the original contract and negotiated an amended contract good for two years. The audit dealt with all of the revenue streams some of which are no longer applicable under the new temporary contract. However, there were quite a few potential non-compliance issues identified:

  • “Early Termination: The Team Owner’s June 30, 2014 financial statements were not provided to the City, prohibiting the City from verifying the Team Owner’s claimed operating loss. Additionally, the City’s estimate of the Team Owner’s 2013/2014 operating loss is greater than the Team Owner’s March 13, 2015 claimed operating loss based upon the information provided to the City and the Consultant by the Arena Manager. It appeared that the loss as reported to the City was not based upon the Team Owner’s financial results but was based upon the Partnership’s earnings before interest, taxes, depreciation and amortization from the consolidated audited financial statements.” The city had to subtract out the Arena Manager’s audited financial statements from the Partnership’s financial statements since they were not reported separately but all lumped together. The city calculated the Team Owner’s loss to be greater than what they reported to the city.
  • Naming Rights: The City was not paid their full share of naming rights under the 2006 Jobing.com Naming Rights Agreement, resulting in a potential underpayment.” Under the agreement the city was to receive 20% or $1.2 M a year ($60,000 a month). Instead the city received $55,540 for the year. Unilaterally IceArizona said if Jobing.com pays us less, the city gets less. They also independently revised the definition of what components made up the naming rights and told the city that it was not entitled to some of those revenue components.
  • “Qualified Tickets: The number of paid admissions reported by the Team Owner to the NHL was higher than the number of paid admissions reported to the City, resulting in potential surcharge and supplemental surcharge fees still due to the City estimated at $39,640.” The number of paid admissions reported to the city was 533,856; the number reported to the NHL was 542,665 ( a difference of 8,809). The number of complimentary tickets reported to the city was 43,762; the number reported to the NHL was 34,953. The city should have received an additional $39,640.50 for the unreported 8,809 tickets.
  • “Supplemental Surcharge Fees: The Arena Manager did not establish a Supplemental Surcharge Escrow Account in 2014/2014 and deposit funds into the account as required by the PMSA. The Arena Manager wired the entire amount of supplemental surcharge fees that were collected throughout the year to the City on July 9, 2014.” Again, because of the discrepancy in reported ticket sales the city did not receive all supplemental revenue to which it was entitled.
  • “Annual Financial Reports: The City did not receive the Arena Manager’s audited financial statements, which were due September 30, 2014, until February 25, 2015. The Team Owner’s annual financial statements were not reported to the city. The Arena Manager’s independent external auditors were unable to confirm the Arena Manager’s and Team Owner’s 2013/2014 revenues and expenses to the City.
  • “Sales Tax: The Arena Manager and the City have not clarified responsibilities regarding the collection and remittance of sales tax, potentially resulting in unremitted sales taxes on certain Arena revenues.”
  • “Annual Budget: The Arena Manager submitted the 2013/2014 annual budget to the City late on March 25, 2014. The budget was due within 30 days of the closing date of the PMSA.

What does all of this government-speak mean in plain English? The city was frustrated because IceArizona was very late in submitting their audit and IceArizona played games with the report they submitted. The city was put in the position of finding the hidden pea under three cups. The city was conned. IceArizona’s game playing shouldn’t come as any surprise. After all, look at with whom they surrounded themselves…Craig Tindall, Julie Frisoni and Gary Sherwood…who appear to be three little peas in an ethically challenged peapod.

The city didn’t care about the profit and loss statements of the IceArizona partnership. It wanted and didn’t get, two, separately and independently verified audits of IceArizona as the arena manager and IceArizona as the team owner. The city suspects that the annual loss was greater than IceArizona reported but without those two audits the city can surmise but not verify their suspicion. The city was underpaid on ticket sales and the related surcharges that flowed from the ticket sales. The city was underpaid on naming rights because IceArizona unilaterally changed the rules of the game. Finally, the city may also have been underpaid on sales tax revenues generated within the arena.

After having seen the results of the audit is it any wonder that a majority of council cancelled the original agreement? It also lends credence to council’s decision to move forward with putting the arena management contract out for bids. IceArizona has demonstrated an unwillingness to share crucial information, financial or otherwise. They have flexed their muscles as the “big boys” and have shown considerable distain for the city and the taxpayers whose dollars keep them alive.

IceArizona, just like any other entity, is free to submit a bid but based upon their past performance. They will have to clean up their act considerably to be considered seriously.

© Joyce Clark, 2015

FAIR USE NOTICE

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It has been 17 years and 235 days since the city’s pledge to build the West Branch Library.

On Tuesday, August 25, 2015 the Glendale city council will go into executive session. One of its topics is sure to be council’s setting of goals for and approval of a Request for Proposal (RFP) for future management of Glendale’s arena. It is a good move.

An RFP will provide information on what is the fair market value for management of its arena. The previous RFP yielded results that indicated that a fair management fee was in the $6 million dollars per year range. Those results can lead to a totally independent firm managing the arena and removing that responsibility from the Coyotes. It sets up a scenario that has the Coyotes as tenants only.

One area that will have to be resolved is that of the parking fees. Apparently under the temporary 2 year agreement the Coyotes continue to keep parking and ticket surcharge revenues. Why? These schemes…for that’s what they were…were created specifically to generate revenue for the city. They were designed to reimburse the city for the $15M a year it was paying as a management fee.

The  amount generated was approximately $8-$9M a year, not enough to cover the $15M annual management fee. Ticket surcharge revenues had always gone to the city even before the latest agreement with IceArizona. In all previous agreements there had been an escalator clause that incrementally raised the surcharge annually.

Whether the arena manager is a new entity or the Coyotes, it’s time to deal with these surcharges to the benefit of the city. Either parking is once again free as it had been before IceArizona or the parking revenue, if utilized, should go to the city. The same can be said of the ticket surcharge…either it goes away entirely or the revenue goes to the city. If the surcharges were to go to the city and the city continues to pay a $6M annual management fee it is possible that the city may actually cover that annual cost and perhaps generate some revenue to be used for the benefit of Glendale’s citizens. Now, that’s a nice thought, isn’t it? Glendale’s taxpayers have been subsidizing the arena for quite some time. It would be wonderful if the arena actually made some money. It’s time for the city to play hard ball and to stop giving away the farm.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 214 days since the city’s pledge to build the West Branch Library.

On July 24, 2015 at a special voting meeting the Glendale City Council unanimously passed Ordinance 2949 and the First Amendment to AMULA Final. With these actions the city and Ice Arizona agreed to dismiss all lawsuits and also settled the issue of the million dollars sitting around in a special escrow account as a result of the 2009 bankruptcy filing.

Before the Kumbaya vote Anthony LeBlanc, spokesperson for the ownership group said, “We’re not going to renegotiate…never, never, never.” Oops. The afternoon of the fateful vote in a radio interview with Roc & Manuch, LeBlanc was heard to say, “We haven’t been open with them (the city).”And, “We haven’t been good communicators.” And, “They’ve done well for the taxpayers. They’ve got a win.” When asked if Ice Arizona would consider buying the city’s arena, LeBlanc said about arena ownership, “That’s not the business we’re in.” Should we believe him in light of his long history of “erroneous” statements?

Councilmember Gary Sherwood, IceArizona’s staunch advocate, in an earlier, same day radio interview (July 24, 2015) with Roc & Manuch, said that he had publicly staked out a position that “he was not going to vote.” We can assume his action was to be a public display of disapproval for council’s treatment of his good friends, the IceArizona owners. In his traditional flip-flop fashion, he reversed himself with a little help from his friends. He revealed that the night before the vote “he had discussions with ownership” (presumably Anthony LeBlanc). His remark is interesting in and of itself for the only meeting council had prior to the vote was an executive session on July 20, 2015.  Did he share the conversations and results of that executive session with his good friend LeBlanc? Sherwood went on to say that “ownership wanted a 7-0 vote in support of the new deal.” Always willing to oblige his friends, Sherwood did a 180 and not only voted but voted in favor and made sure his pal, Councilmember Sammy Chavira did as well.

There has been considerable opining in the news media and on social media as to whether this is a good deal…for anybody. I contend that it is a good deal for Glendale if for no other reason than a $197 million dollar liability is gone…poof! That action should warm the hearts of the bond rating agencies. That figure represents the annual lease payments for the balance of the original lease management agreement.

The city gained in reducing the management fee to $6.5M from the original $15M annually. The actual language is: “10.1. Management Fee. Commencing on the Amendment Effective Date, and during the remainder of the Term, in consideration of the Arena Manager’s agreement to perform the management and other services set forth in this Agreement to pay all operating and maintenance costs associated with the Arena Facility (other than capital costs as provided herein), provided there is no breach by the Team Owner of the obligations under the Non-Relocation Agreement or a material breach by the Arena Manager of its obligations under this Agreement, the City shall pay to the Arena Manager, by wire transfer of immediately available funds to an account specified by the Arena Manager, the annual Management Fee in the amount of Six Million Five Hundred Thousand Dollars ($6, 500,000), paid in quarterly (on a three calendar month basis) installments in arrears on or before each October 1st, January 1st, April 1st and July 1st during the Term.” The city was losing an estimated $8+M a year under the original lease agreement even with the shared revenue it received. This management fee is budgeted within the city budget for Fiscal Year 2015-16.

The city also won two important concessions. It now has its own “out” clause with this agreement which ends in two years, in 2017 with recognition that “19. Termination Date means June 30, 2017.”  It now has the freedom to choose its own arena manager in a year’s time as stated, “46. Change of Manager. Notwithstanding what may otherwise be proved in this Agreement or in this Amendment, the City shall have the option to replace the Arena Manager at any time after June 30, 2016…” Everyone hopes the city will craft an RFP immediately and put it out on the street in a time frame appropriate to exercising that option.

The city achieved what can be considered as payback. IceArizona will no longer use former City Attorney Craig Tindall or former Assistant City Manager Julie Frisoni in any capacity including as a consultant. It is in #4 of the Settlement Agreement which states, “No Other City Employee Involved with Arena Agreement. The Parties represent and warrant that, as of the Effective Date, to the best of their individual and collective knowledge, information, and belief, no other former employees of the City, other than Craig Tindall or Julie Frisoni, have become consultants to or employees of IceArizona, in any capacity, since July 8, 2013. Ice Arizona represents and warrants that neither Tindall nor Frisoni has, in any way and to any extent, no matter how substantial or insubstantial, been involved in initiating, negotiating, creating, drafting, or securing the First Amendment. In reliance on these representations and warranties and those in Section 6, the City, City Council, City Manager, and City Attorney, collectively and individually, represent and warrant that they will never in the future seek to cancel or void the Arena Agreement of the First Amendment based o the involvement of Tindall or Frisoni, no matter how substantial or insubstantial, in initiating, negotiating, crating, drafting, or securing the Arena Agreement or the First Amendment on behalf of Glendale, so long as Tindall and Frisoni are not employed or retained as a consultant by IceArizona or any of its affiliates, divisions, parent entities, or subsidiaries.” The language is quite specific. That is just plain Karma for Tindall and Frisoni.

Did IceArizona get anything out of the deal? It stopped a lawsuit in which ultimately the city would have prevailed. Note that the new deal contains a lot of verbiage enjoining the city from suing IceArizona, ever, for any reason, regarding Tindall and Frisoni. The major gain was that it bought IceArizona time…time to decide its future. If the owners cannot put a decent team on the ice this year their future is bleak and they know it. It’s not a matter of distance that fans must travel to a game. That rationale has been over used. When teams win people will eagerly travel long distances to watch the winner. A team that is a contender also fills seats in suites and attracts more expensive advertising dollars…the lifeblood of any team. Each extra playoff game earns in the neighborhood of a million dollars and can spell the difference between a bottom line in the black and a bottom line in the red.

Another important issue finally resolved is that of distribution of the bankruptcy Operating Reserve Account as follows: “10. The Parties acknowledge and understand that in the Bankruptcy Settlement, subject to approval by the Court, the Bankruptcy Lawsuit (the “Bankruptcy Court”), the Operating Reserve Account shall be distributed as follows: $350,000 to the City, $10,000 to the David Reaves, Chapter 7 Trustee of the Arena Management Group, L.L.C., and $640,000 to Ice Arizona.”

In the same radio interviews, Sherwood stated that he wants “to see a new contract (with IceArizona) in 6 to 9 months, by April of 2016.”  LeBlanc stated IceArizona “wants a contract extension immediately” to bring “certainty.” Obviously it is an option both parties will need to pursue. Let us hope they can be successful in crafting a lease extension that is not build on the backs of Glendale’s taxpayers. No one can object to a lease agreement that is fair and equitable.

Be advised it doesn’t matter what the action or situation is, municipal governments do not move quickly. While an immediate contract extension is IceArizona’s goal, the caution is to not become frustrated if the action is not completed quickly. I learned this lesson the hard way. When I first joined city council I had ideas for projects in my district. I mistakenly thought they could be accomplished instantly. Not so. I became satisfied if a project could be completed within a year. It’s the very nature of government. All action is slow, overly deliberate, and far more complicated than it often needs to be.

Everyone appears to be relieved the issue is resolved for now. Let’s hope this positive action leads to further positive outcomes for both parties.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

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.

Westgate sales tax

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

FAIR  USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

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