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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.

There is more practical and factual information that comprised Glendale’s business decision to decline to renew the agreement with the Coyotes.

Perhaps the most important reason driving Glendale’s decision is the fact that the 18-year-old arena is due for face lift. If you have attended a game at the Cardinals Stadium, you would be aware that for the past few years the Cardinals and AZSTA have invested in upgrading the stadium making a more comfortable and accessible fan experience. The stadium these days is truly amazing, and the fans love the new look and the new accommodations.

The city is planning for the future of the arena. Should it renovate the arena to accommodate the Coyotes’ fan experience when Alex Meruelo is insistent on a short-term lease arrangement of 3 to 5 years? Does that make sense? Where is the cost benefit to the city in doing so? There is none. 

With the Coyotes gone and a renewed emphasis on concerts and other events over the next 20 years, the configuration of the arena can be designed to accommodate the concert and event goers experience. In other words, the arena upgrades would be designed one way for sports fans and a totally different way for concert and event attendees.

That is why when the city began to negotiate with the Coyotes ownership a year ago its goal was to obtain a long-term lease of 18 to 20 years. If the city were to upgrade the arena to accommodate fans it needed the assurance of a long-term lease. Unfortunately, the ownership group made clear that they were only interested in a 3-to-5-year lease time frame.

Decisions regarding an upgrade to the arena are critical. That is why Glendale did not make its decision regarding the Coyotes agreement lightly and without consulting our partners and stakeholders or looking critically at the economic facts.

Another reason is related to historical revenue sharing agreements with every Coyotes ownership group. To retain the team and to assist with their financial viability, the Coyotes retain nearly all of the revenue generated by games. The team historically has kept all the revenue earned from naming rights for the arena and parking revenues. Their rental payment was extremely generous and arguably one of the best deals in the country.

The Applied Economics study says per capita, the Coyotes generate $28 per game in spending as opposed to a concert where the per capita is $58 and another event per capita is $35. Coyotes’ fans tend to stay inside the arena and buy food, etc., within it. Due to the Coyotes revenue sharing agreements, the city earns very little revenue on purchases inside the arena and none on parking or naming rights. On the other hand, concert and event attendees often dine in Westgate before a concert or event or may book an overnight stay at a Westgate hotel. There are no revenue constraints and therefore the tax revenues earned by the city are greater.

I’ve related why Westgate and the city have come of age. Both entities see an even more exciting future ahead. Reliance upon the Coyotes to keep Westgate financially viable is no longer a reality. I’ve also related the history of the Coyotes ownerships. A turnover of 6 different entities with differing agendas and a historical lack of partnership with the city made the situation extremely difficult during the past 18 years.

The decision to decline renewal of the agreement was a reasoned one based upon sound economic data and the need to make critical decisions regarding the arena’s future use.  Gary Bettman, NHL Commissioner, still believes our decision is strictly a negotiating ploy to get more money from any deal. Someone should be whispering in his ear that nothing could be further from reality. The city’s decision is final. I wish the Coyotes much luck and success in their future endeavors.

There is one more thought that I want to share, and it is this. Over 18 years the City of Glendale has demonstrated, with financial investments, its commitment to keeping the Coyotes in the State of Arizona. We invested $185 million in the construction of the arena. For goodness’ sake, we paid the NHL $50 million to keep the Coyotes in Arizona while it searched for a new owner. Over the 18 years the city has invested about $307 million keeping the Coyotes in Arizona — with no help…from the state, the county or any other entity in the region. We did it alone. We put skin in the game – literally.

As Arizona Republic sports columnist Kent Somers said, When is the last time you heard of a city kicking a sports franchise out of the house?”

© Joyce Clark, 2021       

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.

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.

The very first owner of the Coyotes to land in Glendale was Steve Ellman. Ellman bought the team from Richard Burke in 2001. How did Ellman end up in Glendale for he dearly wanted to be in Scottsdale? When Scottsdale rejected the idea, Ellman went shopping, looking for cheap land for his grand vision of a hockey arena to be surrounded by commercial/retail to compliment the arena. I remember at the time, early 2000s, staff indicated to city council that they wanted to show Ellman the old Valley West Mall parcel at 59th Avenue and Northern Avenue as a possible site. Council gave the go-ahead. Staff took him on a helicopter ride over Glendale. When Ellman saw the Valley West Mall site he said it would never work because the arterial roads would not be able to handle the anticipated traffic. On that same fateful visit he saw all of the agricultural land adjacent to the Loop 101 and said that was his preference for a site.

When staff reported back to council with Ellman’s feedback, I was aghast. I was not supportive of a hockey arena in Glendale. In an effort to perhaps kill the deal, I insisted that Ellman be tied to Valley West Mall in a redevelopment project. I thought he would balk and walk away. I was wrong. He agreed to redevelop Valley West Mall and did so. The hockey arena would be built.

Ellman never engaged with Glendale or worked to develop a real relationship as a partner. Who knows why? I don’t. The city tried to engage him, but nothing ever developed. Ellman was very successful in booking major recording artists into the arena during his ownership tenure. I remember in particular, seeing Bette Midler, among others, perform there in the arena’s early years.

Jerry Moyes, Swift Trucking Company owner, became the team’s second owner when Ellman sold the team to him in 2005.  Moyes, a businessman, appeared to many observers, to take little interest in the team. There were also rumors that he was reluctant to invest in the team. He, too, never engaged with Glendale to build a mutually successful partnership. In 2008, Moyes declared bankruptcy and after a yearlong legal battle, the NHL took ownership of the team in 2008, according to bankruptcy court documents.

In essence, the NHL became the team’s 3rd owner in the space of 8 years. The NHL was merely a caretaker for the team while they desperately tried to acquire a new owner. I remember there were 4 or 5 entities in the race to buy the team. The one that impressed me the most was Greg Jamison. He was a true gentleman and eager to create that long missing partnership with Glendale. He had tons of hockey knowledge and experience due to his many years with the San Jose Sharks. He knew what it would take to put a good team on the ice. He put together a consortium of investors willing to invest their own money rather than saddle themselves with enormous debt but unfortunately, he was out maneuvered by one Anthony LeBlanc, one of Jamison’s very own investors and soon to become the new owner.

The 4th owners became Ice Arizona, led by George Gosbee/Anthony LeBlanc in 2013. The trouble with this ownership group was money. LeBlanc et. al., used very little of their own.  They borrowed nearly all the purchase price from various institutions and even got a loan of $70 million from the NHL. They were always cash poor. To observers it appeared as if they were a group of guys who got together to acquire a new play toy. They seemed to revel in owning a hockey franchise but when it came to creating a great product on the ice, they were not very adept. Again, no partnership with Glendale ever developed.

Andrew Barroway was one of the original Ice Arizona partners. By 2016, he acquired a majority interest in ownership and became the 5th owner of the Coyotes. I never met Mr. Barroway and I’m not sure anyone on city council ever met him either. I have no idea as to whether he was good or bad for the team. But, again, no partnership with the city ever developed. He seems to have been an absentee owner.

Which leads us to the latest and 6th owner of the Coyotes. In 2019, Alex Meruelo bought the team. I have never met Mr. Meruelo and only know that he is a successful businessman. From the day of his purchase he has publicly stated, along with NHL Commissioner Gary Bettman, that Glendale will not be a part of the Coyotes future and he planned to actively pursue a new location. Obviously, there has been no development of a partnership with the city.

How does the Coyotes saga of ownership compare with other Valley Sports teams? Here’s a graphic that depicts the string of ownerships of all of our teams:

The multiple ownerships in Coyotes history would appear to play a significant part in its ability to become a successful team. A string of different owners with their own agendas did nothing to stabilize the team and to create a successful product on the ice.

I, and the city, harbor no ill will toward Mr. Meruelo. He has made what he believes to be his best business decision to create a successful team. I respect that. In my next blog, I will comment on why retaining the Coyotes is not the best business model for Glendale.

The long-held myth has always been that Glendale was not a good site because the fan base is in the East Valley. I don’t necessarily buy into the myth. If that were the case, the Cardinals would never successfully fill their stadium, game after game.

I remember attending a West Valley economic summit years ago. The one comment made by the featured speaker, Elliot Pollack, a well-respected Arizona economist, was that Glendale was destined to become the geographic center of the Valley. As each year passes, this concept comes closer and closer to reality. West Valley cities, such as Buckeye, Avondale, Litchfield Park, Surprise and Peoria are all experiencing population explosions. At some point, the West Valley’s population will surpass that of the East Valley’s. That appears to be coming to fruition now. As the media have reported, Buckeye and Goodyear are both among the 10 fastest-growing cities in the United States. Buckeye has grown faster than any city in the country as its population grew in the last decade by 80%. There is the potential explosion of a fan base in the West Valley, but a team must work to cultivate it. All the team’s past owners failed to do so.

Another concept never fully appreciated is that we are primarily a population that moved here from somewhere else. I came from New Jersey. Over the years, I have overwhelmingly met “transplants” as opposed to native Arizonans. We came here with team favorites already encoded into our DNA and it’s difficult to embrace a new team as one’s favorite, especially when there is no compelling reason to do so.

We are “fair weather fans.” What would constitute a compelling reason to become an avid fan? It’s pretty obvious. A good team…a winning team. Witness the Suns and their recent run for the basketball championship. Everyone wanted to attend a game and tickets were selling like hotcakes at exorbitant prices. Every time the Coyotes were in the playoffs for the Stanley Cup, the fans came out selling out the arena and the “White Out” was born. There was no talk of East Valley fans vs. West Valley fans.

I am not trying to sell the notion of the Coyotes remaining in Glendale. That ship has sailed. It is not in our best business interest for the Coyotes to remain and the city has stated repeatedly that its decision is not a negotiating ploy. I just wanted to highlight other factors that are contributory to poor attendance.

The old saying, “build it and they will come” is still a valid statement but with a jaded society with so many entertainment choices, it’s incumbent upon every sports team to create a compelling reason for a consumer to spend what is often a great deal of money to attend a sporting event. The Coyotes, under a series of confusing ownerships, never created a compelling reason to become an avid hockey fan.

© Joyce Clark, 2021       

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.

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.

The Coyotes Press Release issued on Thursday, August 19, 2021, stated, We are hopeful that they (Glendale) will reconsider a move that would primarily damage the small businesses and hard-working citizens of Glendale.” It appears to be a veiled reference to Westgate’s businesses and seems to infer that they will suffer mightily with the loss of 42 Coyotes games per season.

It’s time to look back at the history of Westgate. It’s only rationale for existence in 2003 was the deliberate development by the city of Glendale’s hockey arena. When it opened in 2003, it was surrounded by a sea of vacant land, some of it was still agricultural. Fans came to the arena for the games and left immediately after the games because there was nothing for them to do or experience.

Steve Ellman failed to develop any of the adjacent commercial/retail for 2 years. It wasn’t until 2006, limited development opened with a few restaurants. Westgate, now in its infancy, began to grow and take shape. The Cardinals Stadium, Cabela’s, the AMC Theater and a few restaurants also opened in that year. Followed a year later, 2007, by the Renaissance Hotel and Convention Center. This is what the early Westgate looked like.

By 2012 Ellman could not weather the aftereffects of the economic storm and shed himself of Westgate as it went into bankruptcy. One of institutions that had loaned him the money for the project, IStar, took over Westgate.

Back then, the arena and stadium were the anchor tenants that kept the nascent Westgate afloat especially through the national recession that ended in 2009. Even though the recession officially ended in 2009, everyone, including Westgate felt its effects for several more years. IStar, as a major lending institution, held on to this property knowing its future potential. It did a credible job of keeping Westgate intact and growing. Since 2012, iStar had executed over 50 retail and office leases totaling in excess of 260,000 square feet, converted two floors of vacant office space into 76 luxury loft-style residential units, and brought to the district multiple new entertainment options including Dave & Busters and Tavern+Bowl.

Tanger Outlet Mall opened in 2012 and everything changed. iStar partnered with Tanger Factory Outlet Centers, Inc. to build the successful 400,000 square foot Tanger Outlets, Westgate. Tanger with its nearly 90 stores became the catalyst for more restaurants landing in Westgate for there are no restaurants within Tanger. Tanger patrons began crossing 95th Avenue to eat at Westgate’s restaurants. More restaurants located in Westgate as a result. Tanger Outlets was the beginning of less reliance on Coyotes games to keep Westgate alive.

In 2018, Bob Parsons, GoDaddy founder, bought Westgate for $133 million. Parsons said at the time of purchase, The potential at Westgate is huge. Westgate currently offers visitors a wide variety of entertainment options, but we’re looking to develop features that will entice even more visitors and residents to this unique and vibrant Valley location.”

In the past four years, due to Bob Parsons and his team (YAM Properties), Westgate has become even more vibrant with 38 restaurants, hotels, condos, apartments, and office space. It has become an economic powerhouse in the state and where businesses want to locate. Coming next to Dave & Buster’s will be Tiger Woods’ Pop Golf and Tesla has built a service center on the south side of Glendale Avenue. Some of the long tenured tenants, despite learning that the Coyotes are leaving, remain enthusiastic about investing hundreds of thousands of dollars into upgrading their venues. They know there is more to Westgate than the Coyotes and that more exciting development is coming before the Super Bowl in 2023.

YAM has done an exceptional marketing job for Westgate. Everyone in the Valley knows of Westgate. On any given night you can find some kind of activity in and around Westgate. Westgate is truly a sports and entertainment district.

Just to reemphasize how well Westgate is doing, this week in the Business Journal there was an article about the 7 new businesses coming to Westgate:

  • The Tesla Service Center will offer remote diagnostics, pre-diagnosed repairs and a retail showroom for model vehicles
  • Tacos Culichi, a popular Mexican restaurant in Phoenix, will open another location near Sunrise Boulevard.
  • First Watch is an American restaurant chain that offers a mix of breakfast, brunch and lunch classics. 
  • Bruster’s Ice Cream, another American chain, will open its third Arizona location at the district next to the Aloft Hotel. 
  • Pokitrition, a local shop, serves customizable poke bowls and sushi burritos. 
  • PopStroke Entertainment, which is owned by golf legend Tiger Woods and Greg Bartoli, announced plans to open in the Westgate Entertainment District. 
  • Cupbop, opened at the northeast corner of Sunset Boulevard and Hanna Lane in the entertainment district,
  • NakedQ BBQ, a barbecue joint, opened its third Valley location at Westgate

As reported in the Business Journal, “Oren Hartman, the owner of the NakedQ BBQ and head pit boss, said he’s looked at moving to the area for years, but decided the timing was right with ‘all the great growth out here’. He went on to say, ‘With the continued growth and population out here, with the commitment from YAM and Westgate to keep building up and making the facility better, and just to be around some world-class tenants, those were all the main reasons that we came over’.”

In a previous statement as part of the city’s Press Release, Dan Dahl said he supports the city’s decision to end negotiations with the Coyotes. The Business Journal received further comment from Mr. Dahl, “Westgate is not solely dependent on sports programming and the announcement doesn’t take away the endless potential we have to offer the area,” he said in an email on Tuesday. “Several of our tenants, including many restaurants, are experiencing increased activity and strong sales numbers every night of the week. Many even exceed pre-Covid numbers despite the events and activities still coming back slowly.” 

Perhaps the most consequential development scheduled to open in the Fall of 2023 is the Crystal Island Lagoon Resort located at 95th Avenue and Cardinals Way in the Westgate footprint. With its 3 hotels, 7 specialty retail islands, a 12-acre lagoon for public use, Mattel Amusement Park and much, much more it is anticipated to attract between 2 and 5 million visitors in its first year.

Westgate has grown up as has the City of Glendale. The city commissioned an economic study of the fiscal impact of Westgate with the Coyotes and without the Coyotes (replacing the team dates with other major events). The Applied Economics report revealed that, “In terms of spending at Westgate only (outside the arena) it would take approximately 20 additional concerts or large other events (with attendance of 10,000+) to equal the same amount of sales tax revenues to the city as 43 Coyotes games.”

Another important element of the Applied Economics study revealed was a comparison of per capita spending for a Coyotes game vs. a concert vs. another event. Per capita, the Coyotes generate $28 per game. A concert per capita is $58 and another event per capita is $35.

Currently, discounting last year which was severely impacted by Covid, the arena already books about 10 – 12 major events a year. With the Coyotes no longer consuming 42+ days (game days and practice days), there is confidence that an additional 20 days of major events can be booked. Keep in mind, the Coyotes actually tie up 200 days a year. Let me take a moment to explain what that means to the arena. In the fall, arena management must submit to the NHL 200 open days during which games can be scheduled there. However, the NHL doesn’t post its league schedule until the following spring at which time the arena finally learns which 42 game days must be preserved. Imagine trying to book other events when 200 days are in limbo for 6 months of the year.

When the Coyotes claim that their departure “would primarily damage the small businesses,” that is no longer an accurate statement. Like Pinocchio, their nose continues to grow longer and longer.

© Joyce Clark, 2021       

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.

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.

I want to emphasize that these comments reflect my position and do not represent the position of the city council as a whole or that of senior management.

I have received many queries about Glendale’s recent announcement and I wanted to take the opportunity of posting in my blog to share my position on the issue.

On Thursday, August 19, 2021, Glendale issued a Press Release announcing that it would not renew its year-to-year agreement for use of its arena by the Coyotes. Both parties have been operating under a year-to-year agreement for several years. Within the agreement is the stipulation that either party can decide not to renew the agreement for an additional year by providing written notice each year on or before December 31st. Glendale has provided notice to the Coyotes that it has declined to renew this year-to-year agreement. This means that the upcoming season will be the last in our arena, and they must vacate the facility by June 30, 2021.  As a courtesy the city provided notice before December to allow the Coyotes as much time as possible to realign their future.

I have been on city council for over 20 years, during the long and tortuous history of the Coyotes. I was there when the city built the arena. I was there when the city paid the NHL to manage the team for 2 years to keep the team in the state.  Over the years I have supported the Coyotes through 5 different ownerships because I believed they were necessary for the financial vitality of a fledgling Westgate area. I know that Glendale, time and again, took action that kept the Coyotes in Arizona for the past 18 years. Glendale has proven its historical commitment to the Coyotes.

For me, my reasoning is based on a sound, business decision. I am guided by what is best, at this time, for Glendale and its 253,000 residents. This impactful decision was not made hastily or in a vacuum. Input was sought from key stakeholders, the city’s expert economist and our arena management firm. In fact, there will be a positive budgetary impact to the arena and the city with no hockey team or hockey operations taking place.

I bear no animus toward the team or its ownership. In fact, I wish them good luck and much success in their future. They, and NHL Commissioner Gary Bettman, have repeatedly said they have no future remaining in Glendale and I concur. They believe they will regain their financial health by playing somewhere other than Glendale. That is their belief and their choice.

Westgate has come of age. I believe the Westgate area is successful in its own right. There are limitless and wonderful opportunities for the Sports & Entertainment area turning it into an even greater powerhouse, unparalleled in the Valley. That is my belief and guides my choice.

In 20 years, the Westgate area has grown and matured, earning its present success. Westgate’s Sports & Entertainment District has never been more financially healthy than it is right now. More than a billion dollars of investment has occurred during the past three years. Witness the Crystal Lagoon Island Resort project, Tiger Woods’ Pop Golf project and Tesla’s project. Economic development is booming in the area at an unprecedented level. Over the next year, the city will be announcing many new projects coming to this area. In addition, long time commercial tenants in the area are planning on updating and refreshing their venues.  They know that Westgate is integral to their success. There is a tremendous sense of optimism throughout the area.

Westgate Entertainment District/Yam properties issued the following in support of Glendale’s decision, “The City of Glendale has been a great partner for us, and we support its decisions regarding the arena, said Dan Dahl, Director of Real Estate for YAM properties.”

It’s time to split the blanket. The Coyotes have wanted to do so for several years. Glendale now realizes that it is in their best business interest to agree.

In the coming week I will offer more commentary on this event. Stay tuned.

© Joyce Clark, 2021       

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.