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Joyce Clark Unfiltered

For "the rest of the story"

On August 29, 2013 Paul Giblin of the Arizona Republic wrote a story about the Coyotes parking situation. Here is the link: http://www.azcentral.com/community/glendale/articles/20130829free-parking-westgate-may-cost-coyotes.html . Hard core, dedicated Coyotes fans are well aware that this season there will be a parking fee for Coyotes games. They have already made clear that they are on board and comfortable with the new parking fees. They understand that it is part of their bargain to keep the Coyotes playing at Jobing.com Arena. Season ticket holders have already been charged for their parking – anywhere from $300 to $600 for the season.

What about the casual Coyotes game attendee? Giblin raised the specter of all of the free parking available in Westgate in lots not controlled by the Coyotes as an alternative that will impact expected “enhanced revenues.” I think his angst was misplaced and deliberately designed to raise an irrelevant issue.

Currently Westgate charges $10 Parking* on Cardinals Home Game Days at Westgate Entertainment District designated lots. Free parking for pre-season games.*Cash Only. Here is the link: http://westgatecitycenter.com/visitorinfo/parking/ . It is logical to expect Westgate to employ the very same system for Coyotes games. If it is not immediately instituted, it certainly will be after a game or two. If one is going to a movie, shopping or eating and not attending a game, look for some kind of rebate system. Westgate cannot allow its customer parking to be usurped by Coyotes fans looking for free parking.              

We can also expect the Cardinals to come up with a parking fee structure for Coyotes games. When the Glendale city council was considering the current ownership deal rumblings were floating that the Cardinals would charge to park (and perhaps undercut the Coyotes’ fees). The city council was well aware of those rumblings. Of course, the council knew about the proposed Coyotes’ parking fees. It was discussed publicly and in its presentation to Council estimates were made by the new ownership of how much revenue would be generated. After 20% is taken off the top by ownership for each game, the balance will become part of the “enhanced revenue” package promised to the city to recoup the additional $9M unbudgeted for the annual arena management fee.  Inevitably, all of the Westgate lots and the Cardinals’ lots will be fee for parking.  

The Cardinals include their parking fee into the cost of each ticket and assign parking lots, i.e., Red, Green, etc., to the ticket holder. A pricey ticket gets you the Red lot. A nose bleed seat gets you the Brown lot and a shuttle over to the stadium. As the former councilmember representing the Desert Mirage and La Buena Vida neighborhoods I raised the concern that fee for parking could push fans into those neighborhoods directly east and across 91st Avenue. The city agreed and established a Neighborhood Protection Program. All mega events (Cardinals’ football games, major concerts, etc.) with attendance of over 40,000 initiate neighborhood protection. Manned barricades are put up and residents have an ID placard identifying their residence in the neighborhood.  It is a system that has worked very well but even with it in place there is a small amount of fan parking that still occurs in those neighborhoods.                                                                    

Back to that casual fan that doesn’t want to pay any fee — $10, $15 or $20 to park. Coyotes’ games have a maximum attendance of nearly 18,000. That is far below the 40,000 needed to initiate the city’s Neighborhood Protection Program. If casual Coyotes fans park in large numbers in those neighborhoods there will be no manned barricades and no means of keeping those fans out of these neighborhoods. There is certain to be push back from residents.  No one wants to see that happen. Is Councilmember Chavira concerned about this issue? Who knows? He was the 4th vote of approval for the IceArizona deal. You would think he would have some clout with them. He should be asking the new ownership group to institute and to pay for the Neighborhood Protection Program for all Coyotes games. That kind of program would drive people back to the fee parking lots – resulting in a better parking payday. After all, part of being a good community partner involves protecting your neighbor from the unintended consequences of your actions. 

©Joyce Clark, 2013

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Note: I know I promised to relate the Council’s discussion of the casino next in Part II of What do these two things have in common? but this is such a timely issue and is now being reported widely I decided to post it before the casino issue.

On March 5, Paul Giblin of the Arizona Republic reported that, the Arizona Cardinals training camp would provide economic impact of $15.3 million, Glendale says. More business at Westgate City Center, Tanger Outlet mall.”

OK then. Joe Ferguson of the arizonadailysun.com on March 5, 2013, reported, The training camp is estimated to inject roughly $2.3 million into the Flagstaff economy annually, according to a study performed by the Arizona Rural Policy Institute at NAU — $1.6 million directly and $700,000 indirectly.

But those impacts, which are calculated according to a standardized economic model, might not be as great in practice. When the Cardinals went to Prescott in 2005 because of a virus outbreak at NAU, taxable tourist-related sales in Flagstaff showed no drop from 2004, nor were sales in 2006 much higher when the Cardinals returned.”

That’s quite a discrepancy between the $15.3 million Glendale says could be realized and the $2.3 million Flagstaff actually does realize. Who is right?  I don’t think anyone has a blinking clue but let’s take another look at the figures presented by Glendale City staffers to the councilmembers at their workshop meeting of March 5, 2013. Staffers said Applied Economics was retained to perform the study on economic impacts to Glendale if the training camp is located here.

westgate 1

Westgate

It reminds me of a City Council Meeting that occurred on November 27, 2001.  At that meeting council received information from the Arena Mixed-Use Development Agreement. Steve Ellman contractually agreed to this schedule for development of Westgate:

Deadline for Completion                        Cumulative Min. SF of Qualified Use Space

6 mos. after substantial

completion of arena                                800,000

 

30 mos. after substantial

completion of arena                                900,000

 

42 mos. after substantial

completion of arena                             1,100,000

 

54 mos. after substantial

completion of arena                             1,300,000

 

66 mos. after substantial

completion of arena                             1,450,000

 

78 mos. after substantial

completion of arena (by 2010)           1,600,000

 

Or this presented at the same council meeting, which was projected to produce these revenue figures for the city:

 

Tax Report Year    Qualified Tax Revenues     Min. SF Qualified Use SpaceBag of Money Clipart

 

1                                 $2,921,034                              800,000

2                                 $3,008,665                              800,000

3                                 $3,464,057                              900,000

4                                 $4,298,237                          1,100,000

5                                 $5,157,442                          1,300,000

6                                 $5,859,860                          1,450,000

7                                 $6,583,350                          1,600,000

 

It all looks so rosy, doesn’t it? Projections offered down to the dollar. Except it never materialized. Steve Ellman never met any of these development projections. In fact, if I remember correctly, today there is only about 600,000 SF of use space developed in Westgate.

Let this be a lesson. Projections and estimates can be anything and should not be relied upon as gospel. You know the old saying, “Fool me once, shame on you. Fool me twice, shame on me.”

The city is saying there “could be an economic impact of $15.3 million in 2013.” For whom? The region…the state? It football field 2then goes on to say, “total direct revenue for the City of Glendale is $509,000; including fan spending, hotels and utilities.” I thought part of the reason the Cardinals’ training camp is moving to the Valley is to accommodate the existing Valley fan base and to grow it. Hotel nights won’t be a big factor if most of the fans are living in the Valley. Joe Ferguson of the arizonadailysun.com, in the same article cited earlier in this post, reports, “In addition, local merchants report that many of the Cardinals fans are day-trippers from the Valley who pack picnic lunches and spend relatively little in Flagstaff.”

City staffers on March 5, 2013, provided council with a Youth Sports Complex Fee Comparison:

                                                                                    Global Spectrum      Rojo Management

Management Fees                                                      $216,000.00              $285,000.00

Utility Costs (Water & Electric)                                    106,000.00                  40,889.25

Total  Cost                                                                      322,000.00                325,889.25

Revenue to City                                                                   50%                          20% (after $150K)

Net Cost                                                                        $322,000.00              $325,889.25

 

There are lots of questions about this staff presentation that were not asked by councilmembers. Without context it’s like comparing apples to oranges.  Global Spectrum’s contract calls for managing and renting out the sports fields all year Boy Playing Soccer Clipartlong for $216,000. We must assume that Rojo’s contract would call for the same yet their management fee is $69,000 higher.  Why? Do they need more people to do the same job that Global does?  Do they pay higher salaries to their personnel than Global does? What is their rationale for a higher management fee?

There are many youth sports leagues that rely upon the use of and rent these fields all year long – from soccer to football leagues. There is a major discrepancy between both contracts relative to utility costs. The $40K figure that Rojo cites, by assumption, does not seem to reflect the fields’ usage all year long. Is it their intent to only reflect utility costs incurred during training camp? Or was it a low-ball figure designed to make Rojo’s bid more attractive? I don’t know but these are questions that should have been asked. Rojo, by the way, is a Bidwell subsidiary.

Ice Skating ClipartAnother question not asked is, what was the revenue generated by Global Spectrum last fiscal year? The city receives 50% of it from Global. Should we not know what that figure is? Rojo is proposing revenue share of only 20% and that is after the first $150,000 is generated. I am sure staff in preparation for this presentation should have been able to supply an estimate of revenue it expected to receive under the Rojo contract. Council should have asked about revenue projections or staff should have provided this information to council.

On the face of it when comparing these two costs for operating the youth sports fields there is only a $3,889.25 difference. (I always love it when they offer costs down to the penny. How can they be so accurate on the smaller items and often miss the big picture entirely?) Is the presentation designed to make you say, well there’s such a small difference between the two, why shouldn’t we enter into a contract with Rojo and reap the rewards of having the Cardinals’ training camp?

But until the questions I posed are answered, I’m not buying it and neither should you.

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