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Joyce Clark Unfiltered

For "the rest of the story"

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

At the Tuesday, October 10, 2017 city council voting meeting the last agenda item was consideration of council authorization to enter into the Amended and Restated Mixed-Use Development and Settlement Agreement with the New Westgate.

A little history is in order. Steve Ellman was the original developer of Westgate in 2002. He promised to built out at 2 million square feet of office, retail and residential. That never occurred. He and the City were the original developers of the city-funded Gila River Arena, home today to the Arizona Coyotes. Ellman’s promises never came to pass and in 2009 he declared bankruptcy for Westgate. The bank sold Westgate to two investors groups, Credit Suisse and IStar. During Westgate’s 15 history the original development agreements were amended numerous times until what remained was spaghetti of at least 20 various agreements. Oft times these agreements were unclear, confusing and contradictory.

In the Spring of 2017 New Westgate and the City entered negotiation to resolve the requirements of these 20 various agreements. Major issues to be resolved included parking stipulations for the area. After months of negotiation a final agreement was produced and it was that agreement that came before council for authorization. The entire council approved the agreement after having been briefed in a series of executive sessions.

The most important result of this amended agreement is that all previous documents are now null and void. This action has opened the door to the mutual goal of allowing every inch of Westgate (except for the mutually designated parking areas) to be developed. Both entities envision a completed, robust and vibrant Westgate. This agreement opens the door for that vision. The City and New Westgate will work together as partners to ensure this outcome.

On another note I am sharing the city’s press release issued this week regarding the formation of a Business Subcommittee:

GLENDALE LOOKS TO LOCAL BUSINESSES FOR ADVICE ON CUTTING RED TAPE SURROUNDING REGULATORY PROCESSES AND CODES

Business Leaders Needed to Serve on Temporary Subcommittee GLENDALE, Ariz.

The Glendale City Council is in the process of recruiting community business representatives to serve on a temporary (one-year) subcommittee for the exclusive purpose of reviewing and making recommendations that would simplify and streamline city processes related to regulatory codes, business licensing, planning, and development. ‘The committee will be charged with making recommendations to the City Council regarding potential policy revisions and other improvements that Glendale can implement that will foster a more business-friendly environment that makes it easier for businesses to start and grow in our community,’ said Sam McAllen, Glendale Director of Development Services.

In addition to making Glendale even more business friendly, the goal of the new City Council’s business leader subcommittee is to enhance Glendale’s reputation for supporting job attraction, creation and retention. Subcommittee members will collaborate with City Councilmembers and other business leaders gathering information, sharing concerns, and making recommendations to improve the way Glendale works to support businesses.

In an effort to gather wide-ranging business viewpoints, the temporary Business Council Committee will be comprised of three City Councilmembers; one representative of a Glendale small business (1 to 24 employee); one representative of a Glendale medium sized business (25-99 employees); one representative of a large business (100+ employees); one member representing the viewpoint of design professionals such as an architect or engineer; one representative of commercial developers; one representative of residential developers. Additionally, at least one of the representatives from the business community must be from a women-owned business and one from a minority-owned business. The temporary Business Council Committee will act as an advisory body to the Mayor and City Council by making recommendations on ways to make Glendale even more business friendly. Interested persons can complete an on-line application at https://www.glendaleaz.com/boardsandcommissions/CityCouncilandBusinessLeaders.cfm .” I urge all Glendale business owners, large, medium and small to join city council in its effort to make Glendale even more business friendly.

© Joyce Clark, 2017                 

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Paul Giblin wrote an article for the Arizona Republic on May 5, 2013 entitled True Jobing.com Arena operating costs are well below what Glendale as paid. In it he states, “The true cost to operate Jobing.com Arena ranges from $5.1 million to $5.5 million a year…” Really? It’s based on fuzzy math. Below are 2 pages from Coyotes Newco, LLC. Coyotes Newco, LLC. Is the entity created and owned by the NHL for purposes of managing Jobing.com Arena.

The documents below show the proposed annual budget for the Fiscal Year ending June 30, 2014. In it the total revenue figure is, to be precise (something others apparently failed to do), $6,931,477.00. Total expenses are $12,468,912.00. The net operating loss is projected to be $5,537,435.00.

Newco 2 pages_Page_1

Newco proposed
budget 2014

Newco 2 pages_Page_2

Newco proposed
budget 2014

Basic math says if you spend $12.4 million and you make $6.9 million, you are in debt $5.5 million per year.A net operating LOSS is not the same as the total cost to operate the arena annually. How can anyone can throw out a figure of $5 or $5.5 million and claim that is the cost to operate the arena? At best, it appears to be irresponsible and misleading to the general public. It provides erroneous fodder to the opponents of any fee paid whatsoever to operate the arena annually. Did I mention that this proposed budget includes very few non-hockey events? This budget is subject to change in an upward direction in terms of loss as more non-hockey events are added.

Has the NHL made money on operating the arena for two years at a total cost of $50 million? Yes, probably but since January, 2013 through the date of July 1, 2013 when a new manager is mandated to assume control of the arena the NHL has not been paid a single cent to operate the arena. So I think it’s fair to add another $6 million in expenses for these 6 months. While the city has paid the first $25 million the NHL has not, as of this date, called for payment of the second $25 million. It still, to this day, sits in a city escrow account, untouched.

Mr. Giblin also recites current rhetoric on the street that says that the LeBlanc/Pastor group are the frontrunners. They may be only in the sense that they are the FIRST group to have all of its ducks lined up for presentation to the NHL and the city. Are they first in the hearts and minds of the NHL? I doubt that. The NHL will accept the offer that is best suited to their needs. In an April 29, 2013 interview Mr. Daly said, “Yes. I mean, again, and I should clarify this. I mean, there’s no doubt that we’re dealing with Mr. Gosbee and Mr. LeBlanc and trying to work through and get to a deal with them but there are other interested people who continue, we’re working with at the same time as well. Nobody has exclusivity here (bold mine). Um, but obviously we’re getting close to having to make some decisions and sign some documentation and you know, we’ve got to work on it. I was on a conference call again last night. It’s something we’re working on”.

Despite the LeBlanc/Gosbee group’s effort to minimize others who are in the running to purchase the team, all others are still viable and not to be discounted no matter how much LeBlanc and Gosbee would like you to do so. Craig Morgan reported on May 5, 2013 that LeBlanc/Gosbee and the NHL would be in town on Tuesday, May 7, 2013 to meet with the city. Why Tuesday? Why not Monday or Wednesday? Tuesday is the scheduled City Council Workshop session. On its Executive agenda one of the items is a Coyotes discussion. This is typical Glendale. Who do you think the council will be talking to in Esession on Tuesday? You win! It will be the NHL, LeBlanc and Gosbee (or their representatives). At an upcoming Tuesday council Esession they could be meeting Pastor, Hulsizer, Reinsdorf, Kaites or Jamison. Take your pick.

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