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Joyce Clark Unfiltered

For "the rest of the story"

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:

  1. 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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An alert for residents living along 83rd Avenue and 91st Avenue from Camelback Road to Bethany Home Road regarding the Planned Area Development application called Stonehaven. The applicant has submitted a revised Stonehaven development plan and has scheduled a formal Neighborhood meeting:

Wednesday, January 11, 2017 at 6:00 PM

Sunset Ridge Elementary School Cafeteria

8490 West Missouri Avenue, Glendale, Arizona 85305

The Glendale City Planner handling this case is the Glendale Planning Director, Jon Froke. He can be reached at 623-930-2585 or by email at jfroke@glendaleaz.com. Mr. Froke can answer your questions regarding the city review and hearing processes as well as the staff position once their report is complete. Below is a depiction of the Planned Area Development Land Use Master Plan. It is disappointing as the applicant is asking for more density while refusing to plan for large lots south of the Grand Canal and adjacent to Missouri Ranch (comprised of 10,000 SF lots). The largest lot size being proposed by the applicant is 7,000 SF. The applicant appears reluctant to listen to resident’s concerns about small lot sizes devaluing the property values of those who live near the proposed development.

 

 

 

 

 

 

 

 

 

I urge you to attend this meeting especially if you live in Missouri Ranch; 8300 to 8600 W. Cavalier Drive; Pendergast Estates; Camelback Park, and all areas on the east side of 83rd Avenue including Orange Drive and Montebello Avenue.

Casino Issue not settled as U.S. District Judge David Campbell denied the Tohono O’odham’s (TO) request that he rule in the tribe’s favor without going to trial. Judge Campbell said he needed more information about allegations of fraud on the part of the Tohono O’odham. The trial will be scheduled sometime between April and August of 2017 making it a full year since June of 2016 when the Tohono O’odham filed suit against the state for its refusal to grant the tribe a Class III gaming license.

In the meantime Governor Ducey attempted to settle the case out of court by proposing to grant the TO a Class III gaming license in return for its promise to build no new casinos in the Phoenix Metro area. That overture was rebuffed by the TO and seems to signal that the TO may have plans for another casino in the Phoenix area. Could they have once again purchased land secretly betting that they can get their Class III gaming license without promising to build elsewhere in the Valley? I would think any Valley city with county islands should be very, very nervous. Here is the link to a December 19, 2016 story in the Arizona Republic: http://www.azcentral.com/story/news/local/glendale/2016/12/19/dispute-over-desert-diamond-west-valley-casino-heading-to-trial/95634944/ .

Tax increment financing for the Coyotes new arena is by no means guaranteed passage in the Arizona Legislature. Rather than granting tax increment financing and incentives for the Coyotes the legislature would be well served to assist the Arizona Sports and Tourism Authority (AZSTA) in crafting new revenue streams for the sagging revenues it currently receives. The Authority has only paid out $49.2 million dollars in reimbursements toward a total of $220.7 million dollars owed to various Valley cities for their ballparks facility construction/renovation.  AZSTA has commitments to reimburse Surprise, Tempe and Scottsdale by 2007 and now estimates those repayments will not be completed until 2021. Mesa, Peoria, Phoenix, Glendale and Goodyear are not expected to receive their reimbursements until 2031 and beyond. Better the legislature develop a fix that enables AZSTA to meet its commitments for those facilities already constructed by a vast array of Valley cities struggling to find the money to pay off their debts for construction. Here is a link to the state’s latest audit of AZSTA: http://az-sta.com/downloads/files/financial/2015-special-audit-by-the-office-of-the-auditor-general-full-report.pdf . Below is a chart (page 23) from that AZSTA audit:

 

 

 

 

 

 

 

 

 

 

Anthony LeBlanc, CEO of the Coyotes, acknowledged that the legislature is “essential” for their plan. You can be sure they are already lobbying members of the state legislature. However, in past years Valley cities have also lobbied for Tax Increment Financing (TIF) only to be denied repeatedly. One of the plans floated last year by the Coyotes involved capturing portions of sales and/or tourism tax revenue in a tax district created in the area of their proposed arena. The Coyotes will have a difficult time pushing to the head of a line that relies on tourism sales tax revenues. The legislature would be well advised to create a financial fix for those facilities already in existence rather than diverting scarce resources to yet another new sports facility. The subsidization of sports teams and their venues is not a popular public topic when people are still hurting financially and have not derived economic benefits from the national recovery. Here is a link to a Mike Sunnicks article in the Phoenix Business Journal about the Coyotes plan to have the taxpayers and tourists subsidize their proposed arena: http://www.bizjournals.com/phoenix/news/2016/12/02/arizona-coyotes-arena-real-estate-group-eases.html

 © 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.

PLEASE NOTE: YOU WILL NOTE THAT I HAVE NOT PUBLISHED MANY BLOGS LATELY. I HAVE BEEN CONSUMED WITH A PERSONAL FAMILY ISSUE WITH MANY, MANY DOCUMENTS TO READ AND ABSORB. THE ISSUE SHOULD RESOLVE ITSELF BY THE END OF OCTOBER.

It has been 17 years and 281 days since the city’s pledge to build the West Branch Library.

It would appear so. Like a fall bonfire’s smoke, there is the smell of desperation in the air. His recall election is fast approaching and early ballots for Sahuaro district voters go out on Wednesday, October 7th. His campaign has been placing robo calls (one can assume the fire union is footing the bill) to voters in his district. In them, Sherwood apparently calls on voters not to believe all the lies being told about him and that they have been created by interests outside of Glendale. No one is buying his rhetoric. The “lies” Sherwood refers to are of his own making. He didn’t need help from interests outside of Glendale.

He had a district meeting (a rare event) on October 1, 2015. Isn’t it amazing that it was scheduled just before early ballots are mailed? There is something to be said for the power of an incumbent.  I know that when I ran for council there was a prohibition for councilmembers from using city resources for (if I remember correctly, for at least 60 days…it could have been longer). He has tried to explain away his lousy driving record with its array of suspensions and warrant for his arrest. His rationale? All those court documents he was receiving were just junk mail.

Sherwood’s history as the Sahuaro district councilmember is not a record of pride:

  • From the start of representation he has been arrogant about and dismissive of his constituents’ voices
  • He was frequently heard on the 4th floor of city hall crowing that he was the “real” mayor of Glendale
  • He followed his own agenda rather than that of his constituency
  • His extraordinary meeting with former City Manager Brenda Fischer and his advocacy for her hiring
  • His apparent alliance with Fischer and her inner circle, Frisoni, Tindall and Burdick leading to their favoritism and advocacy for his positions on issues such as the Coyotes deal
  • His rationalization for support for the casino seems to change on any given day but many continue to believe that he traded his vote of support for the casino with Councilmember Chavira’s vote of support for the Coyotes
  • His stance on Foothills Library closure and advocacy for Becker billboards was in direct opposition to the majority of his district residents’ wishes
  • As Vice Chair of the Valley Metro transit board he has, before hearing or considering the wishes of the people of Glendale, staked out a position not only in support of light rail in Glendale but that the route should be through its downtown
  • Lastly and perhaps most troubling, is his flaunting of the law. The most serious of which was his out-of-town car rental while his drivers license was suspended and he paid for the vehicle rental with a city ProCard. If there had been any kind of accident he would have subjected the city to tremendous liability. There is also the outstanding matter of Glendale taxpayers footing the bill for his illegal behavior

Unfortunately Sherwood has not lived up to his campaign billing, past, present and future. Sherwood’s and the fire union’s desperation are palpable. Apparently their polling is showing that Sherwood will lose his recall election by a vote of 3 to 1. So, they’ve put up campaign signs with every imaginable endorsement they can scrape up. For instance, now “education” supports Sherwood. Who in “education?” Do Sherwood and the fire union think voters are so dumb that they do not know that the city has no influence or control over local school districts? The city does not fund education in any way, shape or form. This is the same ploy both Chavira and Aldama used in their campaigns when they said they supported and were supported by “education.” It’s meaningless. Another favorite is Sherwood’s endorsement by “paramedics.” Which ones? Of course the firefighter paramedics are predominately union members and the fire union is underwriting the cost of Sherwood’s campaign.

Many voters in the Sahuaro district recognize that Sherwood has not been on their side. It seems he has supported powerful outside interests in return for future financial campaign reelection support. For that reason alone it appears that his constituency is prepared to reject him and to elect and “outsider.” Doesn’t that sound familiar? We see the same sentiment on a national level with voters prepared to vote for “outsiders” on both the Democratic and Republican sides of the aisle.

Voters in the Sahuaro district do have a choice. Ray Malnar is running against Sherwood in his recall election. In the past day or two, the following message from Ray Malnar was forwarded to me and I am sharing it with you, the Sahuaro district voters:

Dear friends,

Early Ballots began going out in the Sahuaro District yesterday. At the same time, messages are being distributed by my opponent and his supporters which do not address the issues. I want to continue to stay truthful and honorable. In this, the eleventh hour of the election cycle, I am asking that you help share the facts about my experience, ethics and position on key issues with people you know, especially those who live in the Sahuaro District.

Here’s a link to the  Ray Malnar for a Better Glendale website which will clarify who I am, what I stand for and why we are in this Recall Election. Please type in : https://www.raymalnar.com/   Please send this link out to everyone you know who might have a connection in Glendale.

Thank you,

 Ray Malnar, Candidate

Glendale City Council, Sahuaro District

602-869-1160

ray.malnar@cox.net

© 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 171 days since the city’s pledge to build the West Branch Library.

I have not only read Glendale’s motion but printed it out. Here is the link if you wish to read the motion: City of Glendale motion June 18 2015 . I have read and reread the motion several times. I suggest that you pay particular attention to the footnotes. In some aspects they are as revelatory as the emails provided in the brief.

Glendale could not have chosen a better attorney to represent its interests in its decision to cancel its contract with IceArizona and subsequent litigation. Here is a link to Cynthia Ricketts’ biography: http://sacksrickettscase.com/our-team/cynthia-a-ricketts/ . She is well respected by her peers and has extensive expertise in the area of litigation that the city requires.

If you noted in state statute A.R.S. § 38-511 it refers to any person “significantly involved in initiating, negotiating, securing, drafting or creating of documents.” Many have focused on the word “negotiating” especially with reference to Julie Frisoni. Please go to Frisoni’s PR website (http://www.frisonipr.com/whoweare/). This is a direct quote from her site, “Crisis communications, including NHL Coyotes negotiations and the near bankruptcy of a city.” It appears that Ms. Frisoni can’t have it both ways. There seems to be a conflict (no pun intended) between her claim on her website citing experience in “NHL Coyotes negotiations” and her recent public denials that she was merely a Communications Director.

Based upon my personal experience as a councilmember from 2000 through 2012 Ms. Frisoni was a close confidant of Ed Beasley, former City Manager, and Craig Tindall, former City Attorney. I did not have a great deal of interaction with Ms. Frisoni for I lacked trust in her. While she may or may not have had a hand in direct, face-to-face negotiations of the currently cancelled contract it appears quite evident that she played an essential role in securing (and insuring) council approval of the contract.

Prior to the contract’s approval by city council, on June 26, 2013, she sent talking points in support of the contract to Councilmember Chavira. In fact, Councilmember Chavira, one of only 2 council votes (the other being Sherwood) that did not support the recent vote to cancel the contract, is using many of those same talking points in his current Glendale Today show on Glendale’s Channel 11. Frisoni also sent an email on June 30, 2013, to the four councilmembers in support of the contract with IceArizona: Councilmembers Sherwood, Chavira, Knaack and Martinez. She seems to have deliberately omitted those that did not support it. In that email she passes on Jeff Teetsel’s (Westgate manager) arguments supporting passage of the contract.

I am quite unhappy with the alleged actions of former city attorney Craig Tindall. When city council originally hired him I was quite pleased. He appeared to be competent and articulate. In 2011 I began to hear rumors that he was supportive of an outside group interested in buying the Coyotes. Back then no one could or would tell me who the group was. Reading the emails between him and Anthony LeBlanc, one of the current Coyotes owners, I was unaware of their obviously close relationship dating back to at least 2010.  Little did anyone know they were meeting at their “usual starbucks.” It is now very difficult to accept the current parsing of words in an effort to minimize Tindall’s involvement in negotiating the IceArizona contract. It appears he was involved up to his lips.

It made me recall an incident at the end of 2012. The city was in the process of negotiation with a Coyotes team purchaser, Greg Jamison. I called Mr. Tindall with some technical questions about the deal. Cryptically, at the end of our telephonic conversation he remarked that if the Jamison deal didn’t make there was another group waiting in the wings. When I asked who, he refused to respond. In hindsight it now makes perfect sense but it raises more questions for me. I remember Interim City Manager Horatio Skeete telling me that Tindall appeared to be stalling and would hold Jamison documents on his desk for days. Skeete would make repeated requests for them which eventually would be fulfilled. Did Tindall deliberately sabotage the Jamison deal in an attempt to make available the opportunity for LeBlanc, et. al.? I honestly don’t know. You will have to decide for yourselves.

Tindall’s seeming self dealing is quite disappointing. As far back as April of 2010 in an email exchange between Daryl Jones of Ice Edge (precursor to IceArizona) Jones says they enjoyed working with Tindall and Tindall responds with “Now that’s an offer.” Was that Tindall’s subtle signal that he was angling for a job with them? Who knows? You decide. Or what about Tindall’s March, 2011, email exchange with LeBlanc urging LeBlanc to take a look at investing in a local medical device company? That action would seem to reinforce the notion that they had a close relationship. Or how about LeBlanc’s asking Tindall in October of 2011 if it was time to have a “confidential chat with Ed” (Beasley) as well as an email exchange between Tindall and LeBlanc about LeBlanc’s May, 2010 meeting with Steve E(llman)? What were these all about? We now know that LeBlanc wanted to buy the Coyotes even before the Jamison offer. We now know through more emails of Tindall’s effort to break a roadblock on July 26, 2013 (after the contract is approved) regarding the city’s paying IceArizona’s lenders directly? He emailed the newly hired City Manager (now former City Manager) Brenda Fischer apparently asserting that it was a simple administrative matter and appears to be urging her to take action.

The email exchange between former Mayor Scruggs and former City Manager Beasley are revealing as well. It appears as if the mayor was determined to get LeBlanc’s Lakehead Yale Sports Holding LLC “Plan B” before the city council in March of 2012. Once again Tindall’s name comes up when she says, “I have checked with Craig Tindall and Mr. LeBlanc’s letter is eligible for discussion under the items as posted.” Tindall seemed to be advocating for any LeBlanc deal.

The emails provided in the city’s motion to modify the Temporary Restraining Order are troubling. They are facts. They are the words of the principals involved. They are damning and not easily explained away.

I end with excepts from an email memo to the entire city council dated June 25, 2013 (a few weeks before council approval) from then Interim City Manager Dick Bowers:

  • “Contrary to what might appear in the papers I don’t see this as a ‘done deal’. Far from it. Discussions continued over the weekend and we have come only slightly closer to comfortable than before. Gary B(irnbaum) has helped to illustrate to the Renaissance group’s (eventually IceArizona) attorney the concerns we have. I suspect this has given them a degree of discomfort.”
  • “Glendale cannot afford a failure. The potential of failure exists as a dark shadow in the absence of the investors standing by their own numbers with confidence enough to simply take them for themselves and do the deal for 6.5.”
  • “While there are many ways to describe the Renaissance’s reluctance I keep coming back to that same discomfort of Glendale having all the risk in this deal. My concerns could mean nothing or they could represent an existential question that must be considered. Will this work for the benefit of the City of Glendale and what makes us firmly believe that it will?”

Mr. Bowers’ crystal ball was certainly working that day yet a few weeks later, 4 councilmembers, Yvonne Knaack, Manny Martinez, Gary Sherwood and Sammy Chavira voted in favor of the IceArizona lease management deal. I can understand Sherwood and Chavira’s approval votes. They appear to have been blindly joined at the hip with each other as well as IceArizona. The pro votes of Knaack and Martinez are not so easily understood. Each cited the well being of Westgate as a motivator for their decisions. It is troubling that they appear to have put the well being of Westgate over the well being of the City of Glendale. Why did they not heed the words of Interim City Manager Bowers?

No matter. What’s done is done. The discovery of Tindall’s and Frisoni’s actions provide the city with an opportunity to rectify one source of its annual bleeding…whether one uses $15M or $8.7M a year as the loss figure for the city. Many point to the annual debt payment for the Camelback Ranch Spring Training Facility (CRSTF). They say why focus on the arena when CRSTF is just as much of a financial drain. It is. I suspect in due time that financial albatross will be addressed. Development that should have occurred surrounding this facility never materialized as a result of the national recession. Without any promise of current economic development it is an issue the city must address in light of the fact that this council continues to fail to rein in city expenditures.

The pity of it all is the devastation caused to the coaches and players of the Coyotes team. They have been through so much since Moyes declared bankruptcy in 2009. None of it was of their making. They have become undeserved collateral damage. I hope and pray that their futures will once again become whole and they can take pride in playing under the Coyotes banner.

© 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.

Recently the Arizona Republic started a new item, West Valley Sound Off. They are contacting West Valley elected to get their positions on issues of the day. Their first foray question was, “Do you support the development of this proposed casino? Why or why not?” Those from Avondale, Buckeye, Goodyear, El Mirage, Litchfield Park, Peoria, Surprise, Tolleson and Youngtown declined to answer. Not so with our brave, intrepid leaders in Glendale. Three of them did respond.

Councilmember Manny Martinez has consistently opposed the casino since it was first proposed in 2009. He gets it. He said, “I do not support the proposed Tohono O’odham reservation and casino. I am very concerned for Westgate’s well-being if the casino is opened. How do casinos attract customers? Cheap booze, cheap food, and the cost of rooms are minimal. At Westgate, we have hotels and restaurants that pay taxes and help us pay off our debts. If the reservation and casino come in, as a sovereign nation, they would pay no federal, state, county or city taxes. Governor William R. Rhodes of the Gila River Indian Community said, ‘We believe the Tohono O’odham Nation, with the assistance of the federal government, has disrespected the rule of law, the balance so carefully struck among Indian gaming tribes, our community, Glendale and every Arizonan.”

Then we have words, signifying nothing, from Councilmember Chavira. He doesn’t get it and he is not representing the majority sentiment of the residents of West Glendale and the Yucca district, who will feel the direct impacts of the proposed casino. He mimics the same, old, tired rhetoric that the Tohono O’odham have used ad nausea, “Yes, I do support the development of the proposed West Valley casino and resort. The benefits of the development will be significant not only for Glendale, but for the entire West Valley. Positive economic impacts such as job creation and an additional tourist attraction in our sports and entertainment district are among the benefits.” I’m sure he knows, uhmmm, well, perhaps he knows…that 25% of the jobs must be filled with Native Americans.

Lastly, Councilmember Sherwood responded. This is a guy who, less than two years ago, ran on a platform of opposition to the casino. Now, not so much. He did a flip-flop at a very recent council meeting voting with Councilmembers Hugh, Alvarez and Chavira to reject U.S. Representative Franks’ HB 1410 and to begin negotiations with the Tohono O’odham (TO). Many suspect his affirmative vote was pay back to Chavira for Chavira’s vote in support of the arena management deal. “Neither – I will support the project if the Tohono O’odham Nation can be treated as close to a private entity as possible and having some form of revenue stream into the city’s general fund. Additionally, infrastructure including any street improvements, public-safety agreements, et al. would have to be included and enforceable in federal courts. Thus far, in fact-finding sessions, the Nation appears to be very amenable to this. Businesses such as Westgate, Renaissance Hotel, Coyotes and Tanger Outlets, to name a few, are also in support of proposed project. The sports and entertainment district could very well capitalize on a project of this size if it meets the city’s criteria.” He appears to be back-pedaling as he straddles a very narrow  fence, by adding his list of caveats. His declaration that,” Westgate, Renaissance Hotel, Coyotes and Tanger Outlets…are also in support” is downright laughable. There has never been a declaration of public support for the proposed casino from these entities. Have you seen it? I haven’t. Remember when the possibility of losing the Coyotes as an anchor tenant at the arena loomed? Bar and restaurant owners were beside themselves and declared without 40 nights of hockey games they couldn’t make it. They are not going to support a casino that will draw customers away from them knowing that potential consumers will spend disposable income on gambling, subsidized meals and booze and cheap room rates. If they are so willing to commit financial suicide, let’s see them do it publicly. Not one representative of these entities went to the last council meeting when TO negotiations was on the agenda and expressed public support of the project. Sherwood had no public letters of support from these entities that he could read into the record that evening. It’s time for Sherwood to cease making declarations that may not be accurate. Just because he said it, doesn’t make it true.

© Joyce Clark, 2014

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.

There are figures available for the first six months of the Jobing.Com management agreement covering from August, 2014 through January, 2014. No figures are available for February, 2014 even though we are in March of 2014. We can expect them at the end of March. Why it takes a full month to publish the figures is a mystery. After all, the city is directly reporting the figures supplied to it by IceArizona. The agreement took effect in August of 2014 and there were no ticket sales that month.

The monthly arena report reflects numbers supplied by IceArizona, manager of the arena. It reflects ticket revenues to the city on qualified ticket sales only. Non-qualified tickets could be anything from discounted to comped tickets. The qualified tickets per game do not reflect total per game attendance as reported publicly by IceArizona. The arena has a seating capacity of approximately 17,700. Some of the games were reported as sold out – standing room only. A portion of the ticket sales for those sold out games must have been discounted or comped and therefore not counted as qualified tickets requiring the surcharge of $3 per ticket.  It appears as if the city is not earning the revenue it could. Perhaps more of these tickets should be considered as qualified. Here is a summary of the qualified tickets that actually earned the city revenue month by month:

               # of hockey           Ticket Surcharge divided            Average number

                          events                  by $3 per game                        of Qualified tickets/game

August, 2013                0                             0                                                 0

September, 2013         1                       $16,413 ÷ $3                             5,471      (1 game)

October, 2013              7                     $203,289 ÷ $3                            9,680      (7 games)

November, 2013          6                     $193,517  ÷ $3                          10,751      (6 games)

December, 2013          4                      $153,975  ÷ $3                         12,831      (4 games)

January, 2014              10                    $355,135  ÷ $3                        11,837     (10 games)

A question that has never been answered satisfactorily is how come the Interest Income on the Escrow Account was posted at $4,620 as of September 30, 2013 and that number has not changed to this day? There is no posting of any accrual to that account in Oct.- Nov.- Dec. or Jan.

As of January 31, 2014 the city has spent $6,502,055 toward the $15,500,000 owed this year per the arena agreement. Offsetting revenues earned of $2.7 million have not covered the $6.5 million spent and to date the city has a loss of $3,705,324.

If there are no playoff games the total revenues for the city for FY 2013-14 which ends June 30, 2014 can be estimated at $6 to $7 million dollars. Add another approximate $1 million in Supplemental Ticket Surcharges ($1.50 per qualified ticket) for a total revenue estimate of $7 to $8 million dollars. The city will pay out $15.5 million this year. It is estimated that the loss will be somewhere in the neighborhood of $7.5 million dollars on the arena this year.

Then there is the annual arena construction debt payment at an estimated $12 million a year. It is offset by the sales taxes earned at Northern Crossing, Cabela’s, Tanger Outlets and the businesses in surrounding Westgate. It does not include sales tax earned inside the arena as that is counted as part of the arena revenue of $2.7 million to date. The estimate of the amount of annual sales tax earned from these sources is approximately $4million. That means the city will have to find an estimated additional $8 million to cover the shortfall on the arena construction debt.

The underperformance of both revenue sources: arena revenues and Westgate/Northern Crossing/Cabelas sales tax revenues will fall short and cause the city to pay an estimated $15 million this year over and above all revenues earned. The only ways the city can continue to subsidize arena expenses is to: raise the temporary sales tax and make it permanent; increase property taxes and reduce city services by eliminating some or privatizing. The question for every Glendale resident is, is it wise to continue to subsidize arena losses by raising taxes and reducing/eliminating city services?

© Joyce Clark, 2014

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.

hidden agendaThis week, June 24-28, 2013 there are 3 city council meetings scheduled. First up is a Special workshop meeting at 1:30 PM today. It consists of Executive session (Esession) items only, meaning a secret session. We all know the topic of discussion is the Renaissance Sports and Entertainment (RSE) bid for arena management. It has been reported that the details of the bid may be released on Wednesday, June 25th. The only reason for this meeting is because RSE and the city (COG) are still negotiating the terms of the deal. There would only be two outcomes: 1. the council has accepted the terms and is comfortable with them or 2. the council still has issues with the final terms. Either way, this council has signaled that it is ready to put this issue to bed and vote on it on July 2nd. Keep in mind that just because the RSE bid has finally made it to a voting meeting does not insure a positive outcome. What it does signal is that the council is ready to vote, up or down, RSE’s bid and be done with the issue.

gambling 2The evening meeting (voting meeting) of July 25, 2013 has 3 financial items of interest. The first, Item #8 is prepayment of $5.6M of General Obligation bonds (usually paid for from the city’s secondary property tax collection) by the Water and Sewer Enterprise Fund. This is an interesting strategy and may free up General Obligation bond capacity for future bonding…on what? We can only wait and see.

man moneyThe second item, Item #26 is Authorization for Lease Financing of the City Hall Complex. In 2010, the city had to pay the NHL $25M to run the arena. This $25M has been paid to the NHL. Here’s where the money came from:

  • $21M loan from the city’s Landfill Fund
  • $4M loan from the city’s Sanitation Fund

In 2011, with the Coyotes ownership issue still not resolved, the city agreed to pay the NHL a second $25 to operate the arena. This $25M is still being held in a city escrow account. Here’s where that money came from:

  • $15M loan from the city’s Water and Sewer Fund
  • $2M from the city’s Technology Replacement Fund
  • $3M from the city’s Vehicle Replacement Fund
  • $5M to be paid with an unidentified source to NHL

This lease-back deal will replace:

  • $15M loan to the City’s Water and Sewer Fund
  • $4M to the city’s Sanitation Fund
  • $2M to the city’s Technology Replacement Fund
  • $3M to the city’s Vehicle Replacement Fund
  • $5M whose source had been unidentified and unfunded to pay the last of the NHL’s second $25M
  • $1M as a new project to upgrade the city’s Human Resources software

As you can see, that leaves 1 loan payment outstanding and that is the $21M loan from the city’s Landfill fund. That $21M is part of a reserve account to cover landfill closure. Since the landfill is not anticipated to close for 30 years, the city can afford to repay this reserve account over the next 30 years. Is this a good strategy? Yes, it is. It replenishes those Funds so that they can once again operate effectively and gives the city some breathing room to pay back those costs associated with the NHL’s operation of the arena for 2 years. It is a strategy that hopefully this council will approve.

The last item, Item #27 is an increase in rates, primarily to commercial customers for roll-off bins and disposal rates. The rental cost of a roll-off bin increases from $160 to $175 and the disposal fee per ton increases from $18 to $20. These are fees that have not been adjusted in quite some time. As usual, when there are rate increases, it becomes a double-edged sword. As the rates go up, the number of customers may decrease dependent on market competition by private sanitation companies. Nevertheless it is an increase long overdue.

budget 3The third and Special Meeting is scheduled for June 28, 2013. Do not look for a vote on the Coyotes unless this meeting agenda is changed and posted by 5 PM on Wednesday, June 26th. . The city, by law, must have its tax increasefinal adoption of Fiscal Year 2012-13 Budget Amendments and the Fiscal Year 2013-14 Property Tax Levy before July 1, 2013. These items satisfy that legal prescription and will be largely unnoticed by Glendale residents due to its final adoption on a Friday morning at 9 AM. The other two items, fire-related for strength training and medical transport, were added simply because they could be at this meeting.

There you have it. Three meetings scheduled. Only one of which is the Coyotes ownership issue and we are not privy to its goings on. The other two meetings deal with financial issues created by or related to arena management.

deadline 1The finale of the Coyotes ownership RSE bid is still scheduled for July 2, 2013. Are there 4 affirmative votes? Only the councilmembers know or think they know. If RSE still wants $15M a year as the management fee and cannot or will not guarantee a minimum of $9M in “enhanced revenue streams” to the city this council may find it a difficult deal to swallow. Are we about to experience deju vu? The very mechanics of the deal could cause the Goldwater Institute to reappear. I suspect they are watching very, very closely. Then there is Ken Jones and his ilk who absolutely hate anything Coyote related. Could they mount another referendum drive? Yes, they could and would just to stall the deal. After all, how long will Fortress Investment Group leave an open-ended loan available to RSE?

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Glendale City Council

Glendale City Council

Today, June 4, 2013 Glendale council will conduct a workshop meeting. Here is the link to the agenda:  http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/060413.pdf

Workshops are not like regular evening meetings. They are intended as a means of staff bringing forward subjects they believe are important or staff is responding to a councilmember’s request for further study on a subject. Unlike night meetings there is no opportunity for public comment.

The public agenda is short. There are only two items: an update on Glendale’s airport and council selection of its members for the two standing subcommittees, Government Services and Sustainability as well as selection of Vice Mayor. The airport issue is one that Councilmember Sherwood brought forward. For years the airport has been vexing as it has never reached its full development potential. That is a topic for another posting. We could see some interesting dynamics play out in the self selection of councilmembers to serve on the two standing subcommittees.

The more troubling aspect of the agenda is the Executive Session agenda. Executive Sessions are designed to allow council and staff to discuss, in a non-public setting, contracts, personnel and property leases/purchases. Its interpretation is often overly broad by a city’s legal department. There are 8 items on the Executive Session agenda. It is 4 times as long as the open session! Some of topics placed on the Esession agenda are questionable and were not decided in favor of the public.

One of the topics is the city’s external audit requested by this council. There have been several Esessions that included a secret discussion of this item. One would think that since this has been visited in Esession several times previously that a public update would be provided. Tsk…tsk, council. So much for transparency.

Another item that was previously discussed in workshop is the Cardinals training camp proposal. See this link to get more information from council’s March 5, 2013 workshop:  http://www.glendaleaz.com/Clerk/agendasandminutes/Workshops/Agendas/030513.pdf . The original proposal wasn’t so hot for the city. Since it was discussed in open session previously it probably would have been a good idea to bring this item forward publicly once again. So much for transparency.

jobing.com arena

Jobing.com arena

There are two more items that certainly deserve public scrutiny. Both relate to Jobing.com arena and the Coyotes ownership. The drop dead date for submissions to Beacon Sports, the city’s consultant, for arena management was May 31, 2013. Of course, at city discretion, it can accept bids after that date because of the disclaimer clause in the RFP. One Esession item deals with “potential agreements related to the management of the arena” and the other Esession item is to provide “instruction in connection with potential agreements related to the Hockey Team…”

Yet Mike Sunnicks in his story of June 3, 2013 in the Phoenix Business Journal quoting Glendale spokesperson Julie Watters, says, “Initial responses to the RFP have been received by Beacon Sports. The submissions are currently being reviewed by Beacon to determine completeness and if they qualify for further consideration,” Watters said. “We will follow up tomorrow (Tuesday) with Beacon to determine the status.” Sunnicks provides the reader with a rehash of old information — nothing new. This is the link to his story: http://www.bizjournals.com/phoenix/morning_call/2013/06/glendale-awaits-qualified-bids-for.html?ana=twt

Yet this is one of the secret items to be discussed by council at its workshop today (Tuesday). Methinks the council has been given a report by Beacon with those who have made bids (to date) to manage the arena. How else could council discuss this very topic?  So much for transparency.

Cardinals training camp proposal…external audit…management of city owned arena…the hockey team’s very survival in Glendale…all topics of extreme interest to the people of Glendale. Yet the only discussion to be had will be secret. So much for transparency.

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Leblanc

Anthony LeBlanc

Ever since the NHL principals and Renaissance Sports and Entertainment group (RSE) principals descended upon Glendale on Tuesday, May 28, 2013 new speculation blossoms. On May 30, 2013 Forbes online posted an article by Mike Ozanian entitled Phoenix Coyotes $170 million sale to be partially funded by NHL. Here’s the link: http://www.forbes.com/sites/mikeozanian/2013/05/30/phoenix-coyotes-170-million-sale-to-be-partially-funded-by-nhl/. The article appears to be factually correct and correlates with the information learned several days ago about the Renaissance deal. Thank God, at least it’s not a hatchet job from the Arizona Republic (or as it is fondly called in some circles, the Arizona Repulsive).

Bettman

Gary Bettman

Breaking it down RSE gets a $120M loan (or 70% of the purchase price of $170M) from Fortress Investment group. Unconfirmed sources say the interest rate is 9% but I have no information on the length of the loan.  It gets another loan from the NHL of $80M (50% but no info on rate or length of time) and RSE puts in $45M (26% equity investment). Sources indicate that George Gosbee’s participation is $10M with minor investors contributing approximately $4M – $5M each to cover the $35M balance. But those figures total $250M you say…more than the purchase price of $170M. What’s the extra $80M for? To cover losses incurred over several years. Oh, and by the way, RSE doesn’t have to start paying the NHL for five years and they have been assured by the NHL that their revenue sharing will be “healthy.” This is a very, very sweet deal for RSE.

The best analogy I can come up with is this. You buy a $1700 refrigerator. You put $1200 of it on your credit card and you kick in $450 cash. Oh, and by the way, the company you are buying the fridge from doesn’t require payment for 5 years (of course, the interest is piling up) AND it will rebate you $800 that you can use for repairs, etc.

Now, you have three cousins, Darin (Pastor), Greg (Jamison) and Matt (Hulsizer) but the dealer will only offer his spectacular deal to one of the four of you. Darin is willing to pay $500 in cash; Greg is willing to put up $550 in cash and Matt is willing to pay $600 in cash. You would think that one of your three cousins was a lock to get the refrigerator deal but that’s not the case. Perhaps you and the dealer have an “understanding” and you end up with the deal. Go figure.

Bag of Money ClipartEveryone is using a $6 million annual figure to operate Jobing.com arena. Where did this magical, mystical number come from? Paul Giblin in his article of May 5, 2013 states,”Scruggs said she changed her position after former City Attorney Craig Tindall sent a memo to council members last spring that advised them that the city had provided documents to the Goldwater Institute that showed the actual cost was about $6 million a year.” I saved all documents Coyotes related from my time on council. I even have the original agreements executed between the city and Steve Ellman. I searched through them all for former City Attorney Craig Tindall’s memo and do not have it. That does not mean that it doesn’t exist. I don’t remember it and apparently did not save it.

I can’t fathom where or how Tindall could have arrived at a $6M figure. In going back through the financial documents that I have – even the figures for Jerry Moyes (removing what he said his partners were owed) comes in very close to the Newco, LLC. numbers and that is $12+M annually to operate the arena; total revenues of $6M and total losses of $6M. Giblin in his article is willing to concede that, “…the arena-consulting firm International Facilities Group, of Chicago, told the city that a reasonable estimate to operate the arena without an anchor sports tenant would be in the range of $13.8 million to $14.7 million a year.” I have that study and can confirm what it says. There was also a TLHocking & Associates study done in January, 2012 entitled Comparison of Operating Costs for Similar Arenas, that compared 3 arenas with NHL teams with average operating costs of $15 million to $17 million.

During 2012 council participated in endless and continual public discussions (read polite arguments) about the cost of operating the arena. At some point, then Mayor Scruggs whipped out a figure of $6M. She said at the time, that she had done no research, had no basis for such a number and that she pulled it out of thin air. Somehow or another, probably because she used it incessantly publicly, it became the “real” number, so much so, that now Assistant City Manager Horatio Skeete used it as a “place holder” in the city’s current proposed budget. There is no basis in fact for a $6M annual operating figure for Jobing.com arena. If there is, I challenge anyone with that factual information to bring it forward for all to see. Show us all the money!

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