Disclaimer: I am presenting my views as a private citizen who blogs about Glendale issues. The thoughts and opinions expressed do not represent the Glendale city council or its leadership staff.
As I write this blog, news has just been issued that ASU has pulled out of the plan to allow the Coyotes to use property within their athletic district. Never the less, the information below may help shed some light on why legislation introduced on February 1, 2017 would not have passed. Here are links to stories just published: http://www.azcentral.com/story/sports/nhl/coyotes/2017/02/03/asu-pulls-out-plan-bring-arizona-coyotes-tempe/97460974/ and http://www.abc15.com//sports/sports-blogs-local/arizona-state-backs-out-of-tempe-arena-deal-with-arizona-coyotes?utm_source=SilverpopMailing
Don’t ya just love it? SB 1474 was introduced to the Arizona legislature this Tuesday, February 1, 2017. The media announced the proposed legislation today, Friday. Fridays are always good days to introduce anything controversial as this is sure to be. It gets buried amidst a weekend, filled with fun activities and is generally ignored by the media, much less noticed by the general public.
SB 1474 is a proposed amendment to well established state tax code. The amendment proposes the creation of a “community engagement district.” Here is the link to the bill’s full text:
https://apps.azleg.gov/BillStatus/GetDocumentPdf/447123 . Who introduced this bill?
- Senator Kate Brophy McGee, Republican, representing District 28 in Phoenix
- Senator Sonny Borelli, Republican, representing District 5 of Lake Havasu City
- Senator Karin Fann, Republican, representing District 1 of Prescott
- Senator Frank Pratt, Republican, representing District 8 of Pinal County
- Senator Bob Worsley, Republican, representing District 25 of Mesa
- Representative Douglas Coleman, Republican, representing District 16 of Apache Junction and Pinal County
- Representative Thomas Shope, Republican, representing District 8 of Coolidge
- Representative Bob Thorpe, Republican, representing District 6 of Flagstaff
Please note that with the exception of Senator McGee (Phoenix) and Senator Worsley (Mesa), all of these legislators represent areas outside Maricopa County…hmmm.
It proposes the establishment of a “community engagement district pursuant to Section 48-3802.” What’s in Section 48-3802? It sets the parameters under which this community engagement district may be established. Under A. it says, “The governing body of a city in which a university athletic facilities district has been established (read ASU’s district) pursuant to Section 48-4202, Subsection C may also establish a community engagement district in the city pursuant to this section if the governing body (Tempe) determines that the public convenience, necessity or welfare will be promoted by the district’s establishment…but must satisfy both of the following requirements:
- On the petition of the owner or owners of all of the real property on which a public facility will be located, the governing body of the city in which the property is located, on or before December 31, 2018, must adopt a resolution as described in this section.”
Most interesting is, “The district board of governors must have received, from the municipality in which the district is located (Tempe) or from any lawful nongovernmental source (ASU? Coyotes?), a financial commitment in an aggregate amount equal to or greater than the total amount to be distributed to the district under this section…” That aggregate amount has been stated publicly as $200 million dollars toward a $400 million dollar facility.
Lastly, the district will levy and excise tax on business activity in the district of no more than 2%. This is in addition to regular, state, county and city taxes.
I’m no lawyer but upon reading this proposed bill it seems to call for Tempe to pass by resolution a community engagement district since it is the jurisdiction in which the Coyotes arena would be built. Tempe must hold a public hearing on the matter. Bring your seat cushions because that promises to be one heck of a long public hearing.
Under this proposed legislation it appears that if Tempe creates such a district, “…that the establishment of the district may result in the levy of taxes to pay the costs of improvements constructed by the district and for their operation and maintenance.” It seems as if Tempe could have the authority to levy taxes upon every resident in Tempe if there is an annual deficit in revenues produced by this community engagement district. Beware of those bearing gifts in Coyotes’ clothing…the team sold Glendale by promising that the “enhanced revenues” it would receive would cover the costs to the city annually. Never happened.
The proposed bill also seems to require some entity to put up a bond (sort of) to be held in a separate account equal to the $200 million dollars the Coyotes want from the taxpayers…you. Well, we all know it won’t be the Coyotes. So that leaves Tempe or ASU to put up the money. Most likely ASU’s money would come from private donations rather than the annual public subsidy granted by the state legislature to all 3 of Arizona’s universities. I suspect private donors expect their money to go toward improving student education. I’m not so sure they’d be happy to learn that their money is actually going to guarantee the development of a private, for-profit entity such as the Coyotes.
I believe there is a good case to make for why the Coyotes belong in Glendale:
- The Gila River Arena was built in 2003…specifically for the Coyotes.
- The arena is 14 years old and is still one of the best, state-of-the-art arenas in the National Hockey League.
- Glendale has proven its loyalty to the Coyotes by paying the NHL $50 million dollars to run the arena after Jerry Moyes declared bankruptcy in 2009. That act of loyalty nearly drove the city into bankruptcy. You would think that NHL Commissioner Gary Bettman would be loyal to Glendale and stand behind keeping the Coyotes in Glendale.
- The Coyotes pay $500,000 in rent annually and have the use of the arena for all practice games. This is a unique to the Coyotes. Most NHL teams own and operate their own separate practice facilities at their own expense.
- The Coyotes have the second sweetest arena deal in the entire Hockey League. The team gets 100% of the parking revenue, merchandise sales, concession sales and ticket surcharges as well as 80% of the naming rights.
- Between 2015 and 2050, the West Valley will have an estimated population of 1.2 million; Phoenix will have an est. population of nearly 700,000 and the East Valley nearly 650,000. Between 2000 to 2010, the West Valley added about 300,000 people, Phoenix added about 125,000 people and the East Valley almost 250,000 people. MAG predicts future population growth in the West Valley will be nearly equal to the combined population growth of both Phoenix and the East Valley.
- Well respected economic analyst Elliot Pollack predicted that Glendale will become the geographical center of the entire Valley
- The new loop 202 bypass route known as the South Mountain Freeway will be completed by 2019 providing a significantly improved connection between the East and West Valleys
Anthony LeBlanc decided to teach Glendale a lesson when the city cancelled the contract that included a direct subsidy to the team. He is not acting in the team’s best long-term interests. While he gets short-term revenge, he fails to acknowledge and recognize the tremendous long-term growth of the West Valley and that is where his customers will come from. How long before he decides that the East Valley was a mistake because a booming West Valley customer base doesn’t want to commute eastward? After all, that is, in large part, his rationale for trying to move to the East Valley.
There have been many chapters written in the on-going Coyotes’ story. Some of those chapters were written by the National Hockey League; some of those chapters were written by the City of Glendale. But the latest chapters of turmoil and uncertainty about the Coyotes’ fate were written by the Coyotes themselves. The team attributes its lousy attendance to East Valley fans unwilling to commute to the West Valley. Perhaps they should acknowledge that the team’s performance is driving the lack of attendance these days.
There is no doubt that the Coyotes should remain in Glendale, Glendale has paid the price to keep them (something that the most rabid of Coyotes fans and LeBlanc fail to acknowledge). The Gila River Arena is a Class A hockey facility. The Coyotes have a very good revenue deal. With the explosion of growth occurring in the West Valley, this is the best location…for now and into the future.
It’s time for LeBlanc to make peace…not war…with the arena manager, AEG, and the City of Glendale. Glendale has proven its commitment to the Coyotes. It’s time for the Coyotes to prove its commitment to Glendale.
© Joyce Clark, 2017
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