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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.

In parts I and II we looked at the proposed Coyotes project and its funding as well as the stipulations that would be imposed by the FAA. In this part we look at the major hurdles to be overcome.

The first challenge for the Coyotes’ proposed development is that of the mechanism for the repayment of the 30-year, $200 million worth of bonds through a Community Facilities District (CFD) and Government Property Excise Lease Tax (GPLET) Both of these mechanisms are legitimate and have been used by cities throughout the Valley. The Coyotes have said the bulk of the repayment relies upon sales tax generated on the site. In the city’s negotiations with the Coyotes, just one of the issues to be resolved will be who pays any outstanding balance of the annual repayment of principal and interest on the bonds if the sales tax fails to generate the full annual amount needed. Will Muerelo cover it or will he expect Tempe to cover it?

The second challenge, and a major one at that, is the question of Tempe’s taxpayers’ support of the sales tax generated to be used to pay off bonds designed to support another sports venue in the Valley. The assumption by many is that Tempe taxpayers would rather see this development’s sales tax used for city uses that can be enjoyed the general public.

Data Orbital conducted a statewide poll on August 30-31, 2021. Here is the link to their findings: https://www.dataorbital.com/the-blog/taxpayers-icy-at-thought-of-paying-for-a-new-arizona-coyotes-arena . The results summarized are:

  • Voters support for funding a new Coyotes arena

No  47.7% / Yes  39.0% / Undecided  12.7%                                                                  

  • Voters support for using Covid relief funds for a new arena

Democrat:   No  84.4% / Yes  12.3%    Republican:  No   80.2% / Yes  17.0%    Independent:  No  79.0% / Yes  16.1%                                                                  

  • Voters support for elected officials who use taxpayer money for a new arena

Less likely to support  60.4% / More likely to support  29.1% / Undecided  9.6%

I happened to talk to a zoning development professional recently. This person held a meeting in Tempe to gauge neighborhood support on a project that had nothing to do with a new Coyotes arena. Even though the development had no connection to or relationship to the proposed arena, all the Tempe citizens wanted to talk about was their opposition to a new Coyotes arena. Admittedly, this is anecdotal, but it may very well express the level of support among Tempe residents.

The third major challenge is the Federal Aviation Administration’s (FAA) specific height limitations for the site as well as the city of Phoenix’s objection to the proposed residential apartment complexes planned to be built directly in the path of Sky Harbor’s runways. Historically, the FAA’s height limitation drove a proposed Cardinals’ stadium to seek another location. Could the same be true for the Coyotes?

If the Coyotes accede to the FAA’s requirements as well as Phoenix’s prohibition on residential for the site that would require the project to be redesigned as well as scaled back considerably. Does it continue to pencil out in terms of repayment of the $200 million in bonds? Keep in mind that the Coyotes said they anticipate the “bulk” of the bond repayment would rely upon sales tax. Tempe should take a very close look at this issue.

The fourth challenge is if Tempe decides to award this RFP to the Coyotes the arena probably won’t be ready until 2024 or 2025. In the meantime, where will they play? Obviously, it won’t be in Glendale. There has been a lot of speculation about using Phoenix’s Veteran’s Memorial Coliseum.

There is no way that Phoenix can craft an exclusive deal with the Coyotes. Keep in mind that this is a taxpayer funded, public facility. If I remember correctly, the state also has a financial stake in the coliseum. As such Phoenix would have to issue an RFP for the coliseum just as Tempe did for its vacant site. Rather than receiving only one response to its RFP as occurred in Tempe, expect multiple responses for the coliseum.

It would take time to do a thorough review of all responses before an award could be made. Could all of this be done by next season? Your guess is as good as mine but as the clock keeps ticking, it seems unlikely.  In addition, the coliseum would require major renovation plus chillers to make ice. All of the renovative work takes time and money. The best guess currently is that it would take about $40 or $50 million to renovate and at least 6 to 8 months to do so after any award is made. Add that to the Coyotes’ announced investment of $1.2 billion for its proposed development in Tempe.

So far, there has been no RFP issued for the coliseum.

 

 

 

© 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.

In part I we looked at the scope of the proposed project and how the Coyotes plan to finance their development.

There is another element to consider regarding the Coyotes’ proposed project and that is the Federal Aviation Administration (FAA). Does anyone remember that the Cardinals in 2001 wanted to locate their 198-foot-tall stadium in the same general area? Twenty years ago, the Federal Aviation Administration issued an opinion the Cardinals’ stadium site would be a “hazard to air navigation” as planned. To accommodate the FAA, their plans would have to be drastically reduced and would have generated a lot less revenue. In the end, it just didn’t pencil out and the Cardinals Stadium was built in Glendale.

“Those who fail to learn from history are condemned to repeat it,” said George Santayana in 1905.

Here is the link to a story by Brandon Brown dated September 22, 2021 that relates issues raised by the FAA:  https://www.bizjournals.com/phoenix/news/2021/09/22/sky-harbor-concerns-over-coyotes-tempe-arena.html .

Sky Harbor is one of the most significant economic assets of the state of Arizona. Twenty years ago, the FAA’s objections to the proposed height of the Cardinals’ stadium led to the withdrawal of the project from the Tempe site. In the years since 2001, Sky Harbor has grown with even more activity than ever. The imperative to protect it has only become stronger. The proposed site is only 10,000 feet from the end of the runway. That may sound like a lot of space but in terms of jet taking off or landing, it’s virtually nothing.

Chad Makovsky, director of Aviation Services for the city of Phoenix, in a very recent letter sent to the Coyotes raised several concerns. Makovsky said if the hockey arena is built, it offers “unique and significant challenges that may impair or altogether limit capacity at Sky Harbor.”

“In particular, Makovsky pointed out the proposed 1,600 apartments across multiple 12-story towers. He said that Sky Harbor, as an FAA-sponsored airport, and the city of Phoenix, which owns the airport, are obligated to oppose any residential development in that area of Tempe. ‘That’s an issue we’re going to have to stand firm on,’ Makovsky said. ‘Sixteen-hundred residential units right on departure path, I just don’t know what they were thinking. I don’t know why you would want to put residential units right off the end of two of the busiest runways in the state of Arizona.’”

Makovsky raised two more issues related to the proposed project. One was possible pilot distraction with the intensity on the site created by the of use of lights, digital screens/billboards, lasers or fireworks.

The other is the proposed 140 foot height of buildings when the FAA has mandated heights no greater than 100 feet. Tempe did recognize this fact and in its RFP required that any proposed development must meet FAA regulations or obtain a waiver from the FAA. Makovsky also noted that this project will take several years to build during which period construction cranes taller than the proposed 140 foot building height will be used.

The Coyotes and Tempe will need to see if the project remains viable without the residential component and with the remainder of the buildings being scaled down to meet the 100 foot height limitation. How much of the project could be removed and still remain viable in earning enough sales tax revenue to actually pay off the bonds?

That brings me to my blog, part III. In it, I will discuss the serious challenges posed for the Coyotes at this site as well as the Veteran’s Coliseum in Phoenix.

© 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.

In this 3-part series of blogs I examine the Coyotes’ response to the city of Tempe’s Request for Proposal (RFP) in their effort to secure a permanent playing site in the East Valley.

On September 20, 2021, Pauline Pineda authored an exclusive look at the Coyote’s proposal. Here is the link:  https://www.azcentral.com/story/news/local/tempe/2021/09/20/arizona-coyotes-reveal-proposal-for-new-arena-entertainment-district-tempe/8376362002/ .

Let’s begin with the first fact. Ms. Pineda states the site is “46 acres on the south bank of the Salt River that previously were used as a sand and gravel mining operation and a dump.” In comparison, Glendale’s Westgate Sports and Entertainment district is a 223-acre site. The Coyotes’ proposed site is roughly 20% or 1/5 the size of Westgate.

The second fact is their proposal in Phase I calls for, “300,000 square feet of commercial space, 320,000 square feet of office space, 1,600 residential units and two hotels.” It includes a 16,000-seat arena, a 1,500-seat theater, a commercial district, a 200-room boutique hotel, offices, and a 12-story apartment complex of 180 units. Their Phase II includes more than 1,500 apartment units in three apartment complexes 12 stories tall, a convention-style hotel with 300 rooms and additional retail and office space.

By way of comparison, Westgate currently has 8,000,000 square feet of mixed-use development that includes shopping, dining, entertainment, high-end condominiums, parks, and office space. Westgate has 5 hotels, convention space, 35 restaurants, and 3 apartment complexes. It has something else that cannot be replicated on the Coyotes’ proposed site…Tanger Outlets with nearly 80 retail shops. Their proposal sounds an awful lot like a mini-Westgate. No matter how much they try to stuff into those 46 acres, it will not generate the magnitude of sales tax generated by Westgate.

Here’s another fact to consider. There is a basketball arena that has just broken ground in Inglewood, California. It is where Steve Ballmer’s NBA Clippers will play beginning in 2024-25. It’s called the Intuit Dome and is expected to cost $1.8 billion to construct and you can be sure there will be cost overruns. To sweeten the deal, Mr. Ballmer will be donating $100 million to the city of Inglewood, funding job training, worker outreach, educational programs, and a rehabilitation of the Inglewood community center and library. It appears to be a project that Ballmer can easily afford (even with donations and cost overruns) as his net worth is pegged at $101 billion.

No one can guess at how successful Muerelo will be in obtaining additional investors. Keep in mind his net worth is reported to be $2 billion. It is certainly possible that he could end up using half of his net worth to develop his project. By way of contrast Bullmer can easily afford a $2 billion price tag to build new digs for his team and still have lots and lots of money left over. Bullmer is using his own money and Muerelo is relying on investor funding and sales tax to cover his proposed project.

 Fact number 3 looks at the proposed financial mechanisms for financing the project. What are the estimated costs for the Coyotes’ proposed project and how do they plan to pay for it? They are “proposing a $1.7 billion development in Tempe with a hockey arena, hotels, apartments and shops that the team says would be financed by private investors, although it wants to use a portion of city sales tax revenues generated on the site to help pay for $200 million in additional costs.”

They are asking Tempe to establish a “Community Facilities District, that would sell special assessment revenue bonds to raise $120 million for the east parcel and $80 million for the west parcel.  The bonds would be issued in phases to pay for projects as they get underway.”

“The proposal would repay the bonds over 30 years from three revenue sources:

  • A portion of the city sales taxes generated on the site and parking revenue. Tempe’s sales tax rate is 1.8%, with 0.6% designated for specific priorities such as art and transportation. The proposal is to use all but the designated sales tax funds generated on the site (1.2% of Tempe’s sales tax).
  • Up to a 6% surcharge on retail sales, including ticket, merchandise, and concession sales at the arena.
  • Real estate tax assessments on the property.                                                                                                                                                                                                                                                 The team did not say how much each source would contribute to the bond repayment but said sales taxes would make up the bulk of the pot.”

Note that one of the repayment mechanisms proposed to pay off the 30-year bonds is real estate tax assessments on the property. Yet the Coyotes also seek a property tax abatement by transferring ownership of the land to Tempe and then leasing the land back for a fee through the use of a GPLET (Government Property Excise Lease Tax). The non-arena portions of the project such as the retail, office and apartments could have up to 8 years of property tax exemption. The arena and practice facility are allowed to have a longer tax exemption which is subject to negotiation. In essence, the real estate tax assessments would be negligible for a period of years.

No one knows what will be Tempe taxpayers’ appetite for using sales tax generated on the site.  After all, Tempe taxpayers will want whatever development that occurs on the site to generate sales tax to be used in their best interest not to help pay for yet another sports complex in the Valley. In today’s economy with inflation soaring, the very mention of using sales tax to help pay for a sports complex will not be an easy sell.

In part II of my blog we’ll take a look at how the Federal Aviation Administration may affect this proposed development.

© 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.

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.

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.

Ever since I began serving again on city council in 2012, I have been hosting a half hour video called “Beyond the Headlines.” Each councilmember has a half hour video and has named their segment as they chose. I chose “Beyond the headlines” because I wanted to take a deeper dive into specific Glendale announcements.

My latest video can be viewed on Cox cable Channel 11 TV and you can also go to the city of Glendale website and navigate to the latest offerings on Channel 11 and view them online at the city site if you do not have access.

I am especially pleased and proud of my latest video. Yucca residents know that development has exploded in our district. They see the new subdivisions as they travel on our district streets. They can see the construction taking place at Westgate and now Zanjero but they may not be as familiar with all of the development occurring around the Loop 303.

I thought it would be a good idea to put all of Yucca’s development into one half hour video. In order to see all that is happening for the very first time the media production team used a drone video.

I think this is the best video the media team has ever produced. Since you may not have access to view it I am sharing with you now:  https://vimeo.com/475688261/f6a548d471 . I am very proud of Glendale and the Yucca district and quite frankly, I wanted to show everyone just how great our district is. Not only is there room for even more residential development but the opportunities for commercial/industrial/retail in the Loop 303 area are incredible.

In addition to the tremendous amount of development in the Loop 303 area, now estimated at about 10 million square feet already approved, the announcement of Crystal Islands Lagoon Resort Glendale delivers an impact that will be felt throughout the Southwestern United States. It complements our professional sports venues for the Arizona Cardinals, the Phoenix Coyotes, the White Sox and the Dodgers by bringing a major entertainment themed resort to Arizona.

So, when you have a moment, sit back with a cup of coffee and catch up on what’s happening in the Yucca district in Glendale. I hope you enjoy the bird’s eye view!

© Joyce Clark, 2020         

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.

It’s always interesting to follow former high profile Glendale employees. This time it is former Glendale City Attorney Craig Tindall who made the news in Murfreesboro, Tennessee. In 2015 the Murfreesboro City Council hired Mr. Tindall as their City Attorney. This was after a several years’ stint as the City Attorney for Glendale as well as one of the Arizona Coyotes’ attorneys.

The problem this time seems to be a possible violation of the state’s Open Meeting law with regard to notice (not given to the public) on the topics to be discussed during 4 city council executive sessions during  which their then City Attorney, Mr. Tindall, was present and offered his opinion regarding, among other things, City Manager Rob Lyons prior to his ultimate resignation.

A little back history is in order. I was not on city council during the course of events. I was not on council from December of 2012 until December of 2016, at which time I resumed my council position.  I am relying on contemporary media reports.  During the summer of 2013 the city council asked Tindall to resign and he did so in return for which he was granted a six-month severance package. During that six month time period he continued to serve on the city pay roll since it was felt that he had expertise with regard to many ongoing issues including the negotiations about the Coyotes’ contract and the new ownership of Anthony LeBlanc, et. al.  However, after his resignation while still on the city pay roll, he also accepted a job as one of the Arizona Coyotes’ attorneys. Why he felt he could work for both while the Coyotes contract was still under negotiation is something Tindall has never adequately explained publicly.

An ethics complaint was filed in November of 2013 by a former city councilmember (not me). In that complaint it was alleged that Tindall had a conflict of interest as he remained on the city’s pay roll as a consultant while also working for the Coyotes.

The city hired a private attorney who filed a lawsuit contending that Tindall had a significant and perhaps detrimental involvement to the city in negotiating and writing the arena management contract considered by many observers to be more favorable to the Coyotes than it should have been. Tindall’s codefendant in the law suit was Julie Frisoni, who had been appointed an assistant city manager by the now infamous former City Manager, Brenda Fischer. In 2015 the city terminated the Coyotes arena management agreement that Tindall, in part, had negotiated. Apparently it was believed that both Tindall and Frisoni had tipped the scales in favor of the Coyotes.

A complaint was also filed with the Arizona Bar Association but was eventually dismissed. That should come as no surprise as the odds of being sanctioned by the state bar are slim to none unless one is an axe murderer.

Tindall characterized the entire episode by labeling the former councilmember who had filed the ethics complaint as “perpetually dissenting.” Well, that’s what one does when one wants to denigrate the accuser. Simply label the complainant as a kook or nut or whatever.

Enough history. It appears from a recent Murfreesboro newspaper article  that there is some question as to the circumstances of Tindall’s hiring as their new city manager (here is the link: https://www.dnj.com/story/news/2018/05/24/murfreesboro-city-attorney-craig-tindall-ethics-complaint-dismissed-glendale-arizona-coyotes-hockey/637205002/ ). The Murfreesboro city council was no longer satisfied with their current City Manager, Rob Lyons and so he resigned on December 15, 2018. Before the city council began its search for a new city manager, it met “four times in private with Tindall without giving what two experts say is required adequate public notice to discuss Lyons’ future before Lyons agreed to resign.”

“In January, the council spent $28,000 to hire a consulting firm to conduct a nationwide search that drew 35 applicants, but Tindall wasn’t one of them. The elected officials cut the list down to 11 on May 1. During its May 17 meeting, the City Council voted to offer the city manager’s job to Tindall.” 

So the guy the city council hired as their city manager despite a search for the position while not being on the list of the final 11 applicants, appears to have been the guy who gave the council advice about the entire situation. Hmmm…anything fishy about that? Nah.

© Joyce Clark, 2018         

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 haven’t opined on the Coyotes in a long time. It’s sad that they remain in limbo, still seeking the Holy Grail of a new location…in or out of Arizona. You’d think that Andrew Barroway, owner of the team, would take a reality pill and acknowledge that no one is going to build them a new arena and then subsidize the team to play in it. The fans deserve better. They deserve surety and the team stubbornly refuses to provide it.

I have only attended 2 or 3 games this season but from what I hear from fans this season’s performance was dismal. Out of the 8 teams in the Pacific Division they ranked dead last with 45 games played to date turning in 10 wins, 28 losses. While the brand new Vegas Golden Knights, number one in the division, turned in 29 wins and 10 losses. The Coyotes also rank dead last in the league standings.

Having no other place to go, the Coyotes silently did nothing in December of 2017 triggering an automatic lease renewal at Glendale’s Gila River Arena. Here is the link to Craig Harris’ December 19, 2017 story in the Arizona Republic: https://www.azcentral.com/story/news/local/glendale/2017/12/19/arizona-coyotes-staying-1-more-year-glendale-gila-river-arena/963379001/ .

Mr. Ahron Cohen, Coyotes’ Chief Operating Officer, is quoted as saying, “We are absolutely planning to play next season at Gila River Arena and are focused on building a winning hockey team, positively contributing to our community, and achieving success in all aspects of our business.”

Let’s take a look at the reality of that statement. Forbes magazine annually determines the worth of professional sports teams and it has valued the Coyotes at $300 million. It is the least valuable franchise in the 31-team NHL. The team lost at least $19 million last season.  Forbes stated the team’s debt ratio was 83 percent, meaning the franchise has very little liquidity or room to borrow money. In this financial atmosphere, it is painfully obvious that the team simply cannot afford to move – anywhere, in or out of the state. To date there has been no legislation offered at the state level to assist the team in some sort of relocation effort and it does not seem to be a viable option.

The Coyotes have the league’s lowest payroll of $54.8 million, according to the National Hockey League Players’ Association. Again, with an 83% debt ratio it’s no wonder that the team’s payroll is in the basement. Clearly with that kind of debt ratio the ability to build a winning team, as Mr. Cohen suggests, is unrealistic.

There is a lot of work to be accomplished by Mr. Barroway and his senior management to turn this team around. To accomplish that goal long term stability is required. Perhaps it’s time for him to create the stability of location, get serious and commit to a long term lease at the Gila River Arena. Once that issue is resolved and the distraction of seeking a bigger and better location (in their minds) is settled, they can focus on three major initiatives: The first and most important is ‘butts in seats’ despite the current quality of team play. It’s time to develop a major, effective marketing campaign to attract new fans. Get those ‘butts in seats’ to generate a greater proportion of revenue; the second is with better revenue comes the ability to pay for seasoned, successful players. Fans are fickle. They pay to see winners not losers. They cannot rely upon fan loyalty in the Valley. Just look at the Suns and Diamondbacks. Respectively their attendance is down and continues downward when they don’t make the playoffs; lastly it’s all about the fan experience these days. At the game I attended last week I witnessed a format that hasn’t changed since the team started playing in the arena, 15 years ago.

There are new strategies available to attract millennials and women. One has just to look at the Cardinals to notice what they have done to make the fan experience worth the price of a ticket. Their model remains successful as their season ticket holder base remains stable. Oh by the way, I haven’t heard the football fans that come from all over the state complaining that the venue is too far away. Yet Coyotes’ team management continues to point the finger at distance as a rationale for lousy attendance. When they were winning and made the playoffs there was no mention of distance. Come on, it’s time to bury the excuses, including this one.

The city and AEG would like to have the Coyotes stay at Gila River Arena. After all, it was built for hockey as its main tenant. The city has also learned that it should not be in the business of managing and that its arrangement with AEG is a winner. It has no intention of terminating the relationship for AEG has done an outstanding job in its first year of management.

It’s time for Barroway to stop playing games…off the ice. Commit to stay at Gila River and get to work on creating a better team performance and building a super fan base. Glendale has publicly offered to help but it will never go back to the old model of subsidizing the team. It’s time for Barroway to make a major effort to turn things around. Will he…or won’t he? That is the question.

© Joyce Clark, 2018         

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.

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