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Joyce Clark Unfiltered

For "the rest of the story"

Oct 15

18

So Burdick wants to be Glendale’s mayor

Posted by Joyce Clark on October 18, 2015
Posted in Arizona Coyotes • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances • Glendale's Fire Union  | Tagged With: , , , , , | 7 Comments

It has been 17 years and 287 days since the city’s pledge to build the West Branch Library.

On September 20, 2015 former Glendale Fire Chief Mark Burdick pulled a packet to begin the process to run for mayor of Glendale. That sparked many asking if I would run for mayor. The answer is “no.” I am really enjoying my retirement as well as my new found freedom to comment on Glendale’s issues.

Personally, Mr. Burdick is gregarious and affable. He is a nice man but I know a lot of nice people who do not possess the qualities one would expect of a mayor.

There are two major factors about Burdick that voters should consider a year from now when the election occurs. One is the history of his past associations. Burdick was in the Beasley/Fischer-Frisoni-Tindall inner circle.  Apparently Beasley left as city manager while he could for surely he would have been terminated for his alleged favoritism, i.e, allowing Alma Carmichel, former HR Director, to telecommute from Mississippi; and allowing Art Lynch, former Finance Director, to profit handsomely as a consultant after he left Glendale’s employ. Fischer left as city manager after her actions of publicly berating the Glendale Chamber of Commerce President and in a retaliatory move requested councilmember emails. Tindall and Frisoni were employees who allegedly used their positions to further the goals of the Coyotes ownership group in its dealings with the city. Also Burdick appears to support Councilmember Sherwood who is facing recall on November 3, 2015. Burdick continues to maintain a relationship with Frisoni for he hired her to design the marketing package for his brand new company. In fact, I still remember the evening at a function at Westgate when Burdick and Frisoni lobbied me to choose Tindall as Glendale’s Interim City Manager. There is an old adage that you are judged by the company you keep.

The other major issue is the question of the effectiveness of Burdick’s leadership while he was Glendale’s Fire Chief. It appears that Burdick ceded his vision and leadership to the Glendale Fire Union. Fire union employees are sprinkled throughout the organization in decision making positions and other positions of power. Burdick seemed powerless to rein in the fire union’s agenda and goals. He didn’t seem to have the backbone to stand up to them and to advance an agenda that was good for all of Glendale – not just the fire union. Burdick, as fire chief, would have occasional but regular lunch meetings with councilmembers. I always felt as if I were listening to the fire union’s emissary. Several times I suggested that Burdick had to gain control of his department and I would get silence and this seemingly “deer in the headlights” look from him. His leadership skills are in doubt.

Make no mistake; Burdick will enjoy the full force and resources of the fire union’s support in his quest for mayor. That means that every Valley fire union chapter (except Glendale for that would violate the federal Hatch Act) will donate to his campaign. All of these chapters will “volunteer” labor to put up his campaign signs (while helping opposing candidates’ signs to disappear or be vandalized) and droves of firefighters will walk the length and breadth of Glendale handing out pro-Burdick flyers. The big gorilla, the Phoenix chapter, will do the same in spades, in addition to making independent expenditures for campaign mailers. They want Burdick in as mayor…badly. Can you imagine the coup of having a former fire chief as the mayor of one of the largest cities in the state?

Again, Mr. Burdick is a nice man but you vote for him at your peril. Do you want a mayor who will advance the fire union’s agenda by pouring resources into the fire department at the expense of every other department in the city? The city only has so much money in its General Fund. Do you want your General Fund tax dollars being used for fire almost exclusively while ignoring libraries, parks, streets and a host of other essential needs?

Mayor Jerry Weiers will face a tough reelection. If he expects to prevail he had better get out into the community now. To this day many consider him invisible. He needs to up his public profile. Burdick is already hitting Weiers on the decision to cancel the Coyotes contract and to enter into a two year deal with them. That decision will play well with many voters because it reduced the burden on taxpayers considerably and they like that. Weiers still faces the possible specter of having Sherwood and/or Aldama run for mayor as well.

Burdick will receive a lot of help in his campaign. Don’t become mesmerized. He, like anyone else, has feet of clay. His associations with seemingly bad actors within Glendale government and his seeming inability to lead his own department are Burdick’s feet of clay.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Sep 15

14

Coyotes audit

Posted by Joyce Clark on September 14, 2015
Posted in Arizona Coyotes • City Council Actions • City issue and actions • City of Glendale • Gila River Arena • Glendale elected officials • Glendale finances  | Tagged With: , , , | 4 Comments

It has been 17 years and 256 days since the city’s pledge to build the West Branch Library.

I spent some time reading the audit of the Coyotes released by the city on September 9, 2015. Here is the link: https://www.glendaleaz.com/auditor/documents/ArenaContractComplianceReview2015.pdf . The overall sense of the audit expresses the city’s deep frustration with IceArizona’s failure to provide all of the information required by the Professional Management Services and Arena Lease Agreement (PMSA).

Here are a few of the limitations utilized by IceArizona in responding to audit requests:

  • “City staff requested that the Arena Manager provide the City’s auditors and Consultant with a copy of the Team Owner’s financial statements. The Arena Manager denied this request.”
  • “The City’s auditors also requested an independent confirmation of the Team Owner’s 2013/2014 annual operating loss. The Arena Manager’s independent external auditors denied this request.”
  • “On March 13, 2015, the Team Owner issued a notice to the City of the Team Owner’s claimed operating loss for the ‘First Certification Period,’ as defined in the PMSA. The Team Owner provided no additional backup documentation, including Team Owner financial statements, for the city to verify the claimed operating loss.”

Much of the final audit findings are no longer applicable or relevant since the city council cancelled the original contract and negotiated an amended contract good for two years. The audit dealt with all of the revenue streams some of which are no longer applicable under the new temporary contract. However, there were quite a few potential non-compliance issues identified:

  • “Early Termination: The Team Owner’s June 30, 2014 financial statements were not provided to the City, prohibiting the City from verifying the Team Owner’s claimed operating loss. Additionally, the City’s estimate of the Team Owner’s 2013/2014 operating loss is greater than the Team Owner’s March 13, 2015 claimed operating loss based upon the information provided to the City and the Consultant by the Arena Manager. It appeared that the loss as reported to the City was not based upon the Team Owner’s financial results but was based upon the Partnership’s earnings before interest, taxes, depreciation and amortization from the consolidated audited financial statements.” The city had to subtract out the Arena Manager’s audited financial statements from the Partnership’s financial statements since they were not reported separately but all lumped together. The city calculated the Team Owner’s loss to be greater than what they reported to the city.
  • “Naming Rights: The City was not paid their full share of naming rights under the 2006 Jobing.com Naming Rights Agreement, resulting in a potential underpayment.” Under the agreement the city was to receive 20% or $1.2 M a year ($60,000 a month). Instead the city received $55,540 for the year. Unilaterally IceArizona said if Jobing.com pays us less, the city gets less. They also independently revised the definition of what components made up the naming rights and told the city that it was not entitled to some of those revenue components.
  • “Qualified Tickets: The number of paid admissions reported by the Team Owner to the NHL was higher than the number of paid admissions reported to the City, resulting in potential surcharge and supplemental surcharge fees still due to the City estimated at $39,640.” The number of paid admissions reported to the city was 533,856; the number reported to the NHL was 542,665 ( a difference of 8,809). The number of complimentary tickets reported to the city was 43,762; the number reported to the NHL was 34,953. The city should have received an additional $39,640.50 for the unreported 8,809 tickets.
  • “Supplemental Surcharge Fees: The Arena Manager did not establish a Supplemental Surcharge Escrow Account in 2014/2014 and deposit funds into the account as required by the PMSA. The Arena Manager wired the entire amount of supplemental surcharge fees that were collected throughout the year to the City on July 9, 2014.” Again, because of the discrepancy in reported ticket sales the city did not receive all supplemental revenue to which it was entitled.
  • “Annual Financial Reports: The City did not receive the Arena Manager’s audited financial statements, which were due September 30, 2014, until February 25, 2015. The Team Owner’s annual financial statements were not reported to the city. The Arena Manager’s independent external auditors were unable to confirm the Arena Manager’s and Team Owner’s 2013/2014 revenues and expenses to the City.
  • “Sales Tax: The Arena Manager and the City have not clarified responsibilities regarding the collection and remittance of sales tax, potentially resulting in unremitted sales taxes on certain Arena revenues.”
  • “Annual Budget: The Arena Manager submitted the 2013/2014 annual budget to the City late on March 25, 2014. The budget was due within 30 days of the closing date of the PMSA.

What does all of this government-speak mean in plain English? The city was frustrated because IceArizona was very late in submitting their audit and IceArizona played games with the report they submitted. The city was put in the position of finding the hidden pea under three cups. The city was conned. IceArizona’s game playing shouldn’t come as any surprise. After all, look at with whom they surrounded themselves…Craig Tindall, Julie Frisoni and Gary Sherwood…who appear to be three little peas in an ethically challenged peapod.

The city didn’t care about the profit and loss statements of the IceArizona partnership. It wanted and didn’t get, two, separately and independently verified audits of IceArizona as the arena manager and IceArizona as the team owner. The city suspects that the annual loss was greater than IceArizona reported but without those two audits the city can surmise but not verify their suspicion. The city was underpaid on ticket sales and the related surcharges that flowed from the ticket sales. The city was underpaid on naming rights because IceArizona unilaterally changed the rules of the game. Finally, the city may also have been underpaid on sales tax revenues generated within the arena.

After having seen the results of the audit is it any wonder that a majority of council cancelled the original agreement? It also lends credence to council’s decision to move forward with putting the arena management contract out for bids. IceArizona has demonstrated an unwillingness to share crucial information, financial or otherwise. They have flexed their muscles as the “big boys” and have shown considerable distain for the city and the taxpayers whose dollars keep them alive.

IceArizona, just like any other entity, is free to submit a bid but based upon their past performance. They will have to clean up their act considerably to be considered seriously.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Sep 15

4

Sherwood recall election soon

Posted by Joyce Clark on September 4, 2015
Posted in Arizona Coyotes • Casino • City issue and actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , | No Comments yet, please leave one

It has been 17 years and 246 days since the city’s pledge to build the West Branch Library.

In political terms the Sherwood recall election is coming very soon…November 3, 2015. On the ballot you will see no rebuttal statement by Sherwood because he filed his statement after the mandated deadline. His failure to interpret the fine print is a typical Sherwood failing. He has often had to amend his campaign filings for the very same reason and he has been fined by the City Clerk for filing required documents late.

Sherwood created the mess that he is in. He reneged on his campaign platform almost immediately. He appears to have cut a deal with Councilmember Chavira and so he voted for the casino and in turn, Chavira voted for the Coyotes. His public announcement of his private interview with former City Manager Brenda Fischer immediately raised eyebrows. Once Fischer was on board he aligned himself with her, Frisoni and Burdick. There were reports of his having lunch with them individually on a regular basis.

The office of councilmember beguiled Sherwood. Now he was somebody. He reveled in associating with the big dogs…Anthony LeBlanc, Michael Bidwill, Ned Norris, Jr. and Mark Becker. He not only advocated for their projects he was their biggest champion and constantly referred to his private conversations with them. He dropped names and made sure everyone knew he was their buddy.

After only a few weeks in office he began gunning for Mayor Weiers and brought topics to council workshop that he hoped would embarrass the mayor all the while proclaiming on city hall’s 4th floor that he was the “real” mayor of Glendale. Sherwood quickly became full of himself. He refused to listen to his constituency on issues such as Becker billboards and the library. When they spoke publicly he often denigrated and demeaned them. He failed to communicate on a regular basis with the people in his district. He failed to advise his constituents of important meeting dates on hot topics…such as the possible closure of the Foothills Library.

Sherwood dug his own hole with his seeming arrogance, cronyism and lust for power. If my unscientific poll on this blog is any indication, Mr. Ray Malnar, has an excellent chance of taking the Sahuaro district council seat. Right now there are 151 votes (74%) against Sherwood and only 54 (26%) for Sherwood. I suspect these results will be mirrored in the Recall Election on November 3, 2015.

Who is Ray Malnar, Sherwood’s opponent? I had an opportunity to sit down with Mr. Malnar over a cup of coffee (in my case, tea). He is a breath of fresh air and couldn’t be more different from Sherwood. Mr. Malnar is a man grounded by family, friends and his faith. He is a small business owner of All Stone Tile & Wood Restoration, a licensed and bonded company in business since 1995.

Mr. Malnar has not served on a Glendale Board or Commission but so what…neither did I when I ran for my council seat. Serving on a board or commission signals that a candidate may have been co-opted by the city and may have developed sympathies for city positions on issues. He has been involved in the life of our community in other, equally impressive ways. He currently serves as a Court Mediator and Court Hearing Officer for the Maricopa County Justice Court. He is a current board member of Choice Academies and the West-Mec School District. He was a Boy Scout leader for 15 years and has been involved in various church activities.

He is a graduate of the University of Utah and has a BS in finance, a BA in speech and communications and an MBA. His intellectual strengths are in finance, accounting, information systems, general business management and governmental affairs. He is not self-effacing but is quietly confident. He is eager to build relationships that foster trust and believes in empowering others. He is a gentleman and shows respect for all. He genuinely listens to those who wish to share their concerns or different points of view with him.

The voters of the Sahuaro district do have a choice on November 3, 2015. They can choose Sherwood and receive the same lack of representation, the same arrogance and the same distain for views he does not share. Or they can choose Ray Malnar, a man who has committed to representing his future constituents, who respects others and a man who has business and finance experience. Nationally we hear every day that the electorate is seeking change. Voters of the Sahuaro district have a rare opportunity to do the same by voting for Ray Malnar.

If you think it is time for a change in Sahuaro district representation please share this blog with family, friends and neighbors. Let them know they have a choice in November. Let them know they can vote for a good, solid candidate, Ray Malnar, who will do what Gary Sherwood failed to do…represent them.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Aug 15

26

The Coyotes and Jason Rose make nice

Posted by Joyce Clark on August 26, 2015
Posted in Arizona Coyotes • City issue and actions • City of Glendale  | Tagged With: , , , , , | 2 Comments

It has been 17 years and 237 days since the city’s pledge to build the West Branch Library.

Peter Corbett’s article in the August 21, 2015 edition of the Arizona Republic reports settlement of a 2014 law suit between the Coyotes and Jason Rose of Rose+Moser+Allyn Public & Online Relations firm. Here is the link:  http://www.azcentral.com/story/news/local/glendale/2015/08/21/coyotes-settle-lawsuit-scottsdale-polo-event/32112415/ .

The Coyotes had hired Rose’s public relations firm to work to defeat a citizen referendum in Glendale designed to block the arena deal between the Coyotes and the city. The referendum was unsuccessful and the Coyotes subsequently owed the firm a base fee of $25,000 and a $250,000 bonus. To pay off the debt the Coyotes were supposed to sponsor the Bentley Scottsdale Polo Championships (Rose’s baby) to the tune of $55,000 annually and give two front row hockey tickets for 8 games a season for 5 years.

Then LeBlanc seems to have stiffed Rose. The public relations firm got its base fee of $25,000 and one year of sponsorship in 2013…not the $55,000 promised but only $25,000. After that the spigot closed and the Coyotes did not pay another dime.

The judge handling the case granted the public relations firm’s motion for a jury trial. Can you imagine? Another round of negative publicity from a jury trial for the Coyotes? You can be sure after that motion was granted the real negotiation for a final settlement began. Last week both sides finally settled.

What is in this final settlement? No one knows. The terms are undisclosed and no one is talking…not the Coyotes and not Rose. Rose probably got his pound of flesh or he wouldn’t have settled. LeBlanc probably shouldn’t have promised what appears he didn’t intend to deliver.

It raises an issue of concern. The city’s cancelling of the original lease management agreement was a wise move. What was LeBlanc failing to report that the city had no means to verify? If and when the city reenters negotiation with the Coyotes for another long term agreement hopefully the city will include protections and means of verification that were absent in the original agreement. However, it would be prudent for the city to wait until the RFP bids have come in. They will be very helpful in determining fair market values. This time around there are lessons to be learned from recent history. Let’s hope the city does its homework.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner. Read more

Aug 15

24

Glendale arena Request for Proposal

Posted by Joyce Clark on August 24, 2015
Posted in Arizona Coyotes • City Council Actions • City issue and actions • City of Glendale • Gila River Arena • Glendale finances  | Tagged With: , , , , , , , | 3 Comments

It has been 17 years and 235 days since the city’s pledge to build the West Branch Library.

On Tuesday, August 25, 2015 the Glendale city council will go into executive session. One of its topics is sure to be council’s setting of goals for and approval of a Request for Proposal (RFP) for future management of Glendale’s arena. It is a good move.

An RFP will provide information on what is the fair market value for management of its arena. The previous RFP yielded results that indicated that a fair management fee was in the $6 million dollars per year range. Those results can lead to a totally independent firm managing the arena and removing that responsibility from the Coyotes. It sets up a scenario that has the Coyotes as tenants only.

One area that will have to be resolved is that of the parking fees. Apparently under the temporary 2 year agreement the Coyotes continue to keep parking and ticket surcharge revenues. Why? These schemes…for that’s what they were…were created specifically to generate revenue for the city. They were designed to reimburse the city for the $15M a year it was paying as a management fee.

The  amount generated was approximately $8-$9M a year, not enough to cover the $15M annual management fee. Ticket surcharge revenues had always gone to the city even before the latest agreement with IceArizona. In all previous agreements there had been an escalator clause that incrementally raised the surcharge annually.

Whether the arena manager is a new entity or the Coyotes, it’s time to deal with these surcharges to the benefit of the city. Either parking is once again free as it had been before IceArizona or the parking revenue, if utilized, should go to the city. The same can be said of the ticket surcharge…either it goes away entirely or the revenue goes to the city. If the surcharges were to go to the city and the city continues to pay a $6M annual management fee it is possible that the city may actually cover that annual cost and perhaps generate some revenue to be used for the benefit of Glendale’s citizens. Now, that’s a nice thought, isn’t it? Glendale’s taxpayers have been subsidizing the arena for quite some time. It would be wonderful if the arena actually made some money. It’s time for the city to play hard ball and to stop giving away the farm.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Aug 15

20

Glendale First! backs down

Posted by Joyce Clark on August 20, 2015
Posted in Arizona Coyotes • City Council Actions • City issue and actions • City of Glendale • Glendale elected officials  | Tagged With: , , , | 2 Comments

It has been 17 years and 230 days since the city’s pledge to build the West Branch Library.

NOTE: Many have taken the opportunity to email me and berate me because my blogs have not been as frequent as usual. Personal matters have had me traveling out of state on a regular basis and have not allowed me the opportunity to write about Glendale issues on my usual schedule. Hopefully the end of August will provide some relief and I will be able to resume my normal schedule of blogs.

On August 14, 2015, Glendale First! issued a press release saying in part, “Today Glendale First has officially abandoned and withdrawn our sponsorship of recall efforts against Glendale, AZ Councilmembers Hugh, Turner and Tomalchoff.

We are satisfied the city has endorsed a new short term relationship with the Arizona Coyotes that is currently in the best interest of all involved. We’re hoping sincere efforts result in a long term agreement being reached between the City and the Arizona Coyotes in the near future.

These recall efforts shined a bright light on actions by councilmembers that negatively impacted public safety budgets and that put at risk the City of Glendale’s relationship with the Arizona Coyotes. We applaud the unanimous action taken by City Council on July 24th. We thank both the Coyotes and the City for striking a suitable arrangement.

We hope the pledge of the City Council to examine the needs and deficiencies in the two public safely departments bears fruit in the form of reduced response times.”

I contend, as I did originally, that Glendale First! used a public safety issue as a smoke screen for their primary anger over the action taken by a majority of Glendale’s city council canceling the original lease agreement with the Coyotes’ ownership. If they were really concerned about public safety issues they would have continued their recall effort. In this press release their angst over public safety is almost an after thought, easily dismissed now that the Coyotes are staying for the next two years.

We can assume that the Coyotes’ ownership counseled Glendale First! to cut it out and to quit its puny attempt to unseat the existing councilmembers as ownership seeks to mend fences with the Glendale city council as it enters a period of renegotiation of a new, more permanent lease agreement.

The Glendale citizens who have contacted me via email, to a person, want the city to issue an RFP for the arena’s management. They believe the city may get a better deal. While they want the Coyotes as arena tenants in the light of past history, they are not convinced it is in the best interests of the city to use the Coyotes’ ownership group for the arena’s management. They want city council as President Reagan once said, “trust but verify.”

The best way to verify what is a fair market price for Glendale’s arena management is to solicit bids. If the Coyotes’ ownership wants to continue to manage the arena they can respond to the RFP just as any other company. Competition is good for a city’s soul and competition for securing an arena management company is a win proposition for the city and its taxpaying citizens.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Aug 15

3

The Grand Compromise

Posted by Joyce Clark on August 3, 2015
Posted in Arizona Coyotes • City Council Actions • City issue and actions • City of Glendale • Gila River Arena • Glendale elected officials • Glendale finances  | Tagged With: , , , , , , , , , | 3 Comments

It has been 17 years and 214 days since the city’s pledge to build the West Branch Library.

On July 24, 2015 at a special voting meeting the Glendale City Council unanimously passed Ordinance 2949 and the First Amendment to AMULA Final. With these actions the city and Ice Arizona agreed to dismiss all lawsuits and also settled the issue of the million dollars sitting around in a special escrow account as a result of the 2009 bankruptcy filing.

Before the Kumbaya vote Anthony LeBlanc, spokesperson for the ownership group said, “We’re not going to renegotiate…never, never, never.” Oops. The afternoon of the fateful vote in a radio interview with Roc & Manuch, LeBlanc was heard to say, “We haven’t been open with them (the city).”And, “We haven’t been good communicators.” And, “They’ve done well for the taxpayers. They’ve got a win.” When asked if Ice Arizona would consider buying the city’s arena, LeBlanc said about arena ownership, “That’s not the business we’re in.” Should we believe him in light of his long history of “erroneous” statements?

Councilmember Gary Sherwood, IceArizona’s staunch advocate, in an earlier, same day radio interview (July 24, 2015) with Roc & Manuch, said that he had publicly staked out a position that “he was not going to vote.” We can assume his action was to be a public display of disapproval for council’s treatment of his good friends, the IceArizona owners. In his traditional flip-flop fashion, he reversed himself with a little help from his friends. He revealed that the night before the vote “he had discussions with ownership” (presumably Anthony LeBlanc). His remark is interesting in and of itself for the only meeting council had prior to the vote was an executive session on July 20, 2015.  Did he share the conversations and results of that executive session with his good friend LeBlanc? Sherwood went on to say that “ownership wanted a 7-0 vote in support of the new deal.” Always willing to oblige his friends, Sherwood did a 180 and not only voted but voted in favor and made sure his pal, Councilmember Sammy Chavira did as well.

There has been considerable opining in the news media and on social media as to whether this is a good deal…for anybody. I contend that it is a good deal for Glendale if for no other reason than a $197 million dollar liability is gone…poof! That action should warm the hearts of the bond rating agencies. That figure represents the annual lease payments for the balance of the original lease management agreement.

The city gained in reducing the management fee to $6.5M from the original $15M annually. The actual language is: “10.1. Management Fee. Commencing on the Amendment Effective Date, and during the remainder of the Term, in consideration of the Arena Manager’s agreement to perform the management and other services set forth in this Agreement to pay all operating and maintenance costs associated with the Arena Facility (other than capital costs as provided herein), provided there is no breach by the Team Owner of the obligations under the Non-Relocation Agreement or a material breach by the Arena Manager of its obligations under this Agreement, the City shall pay to the Arena Manager, by wire transfer of immediately available funds to an account specified by the Arena Manager, the annual Management Fee in the amount of Six Million Five Hundred Thousand Dollars ($6, 500,000), paid in quarterly (on a three calendar month basis) installments in arrears on or before each October 1st, January 1st, April 1st and July 1st during the Term.” The city was losing an estimated $8+M a year under the original lease agreement even with the shared revenue it received. This management fee is budgeted within the city budget for Fiscal Year 2015-16.

The city also won two important concessions. It now has its own “out” clause with this agreement which ends in two years, in 2017 with recognition that “19. Termination Date means June 30, 2017.”  It now has the freedom to choose its own arena manager in a year’s time as stated, “46. Change of Manager. Notwithstanding what may otherwise be proved in this Agreement or in this Amendment, the City shall have the option to replace the Arena Manager at any time after June 30, 2016…” Everyone hopes the city will craft an RFP immediately and put it out on the street in a time frame appropriate to exercising that option.

The city achieved what can be considered as payback. IceArizona will no longer use former City Attorney Craig Tindall or former Assistant City Manager Julie Frisoni in any capacity including as a consultant. It is in #4 of the Settlement Agreement which states, “No Other City Employee Involved with Arena Agreement. The Parties represent and warrant that, as of the Effective Date, to the best of their individual and collective knowledge, information, and belief, no other former employees of the City, other than Craig Tindall or Julie Frisoni, have become consultants to or employees of IceArizona, in any capacity, since July 8, 2013. Ice Arizona represents and warrants that neither Tindall nor Frisoni has, in any way and to any extent, no matter how substantial or insubstantial, been involved in initiating, negotiating, creating, drafting, or securing the First Amendment. In reliance on these representations and warranties and those in Section 6, the City, City Council, City Manager, and City Attorney, collectively and individually, represent and warrant that they will never in the future seek to cancel or void the Arena Agreement of the First Amendment based o the involvement of Tindall or Frisoni, no matter how substantial or insubstantial, in initiating, negotiating, crating, drafting, or securing the Arena Agreement or the First Amendment on behalf of Glendale, so long as Tindall and Frisoni are not employed or retained as a consultant by IceArizona or any of its affiliates, divisions, parent entities, or subsidiaries.” The language is quite specific. That is just plain Karma for Tindall and Frisoni.

Did IceArizona get anything out of the deal? It stopped a lawsuit in which ultimately the city would have prevailed. Note that the new deal contains a lot of verbiage enjoining the city from suing IceArizona, ever, for any reason, regarding Tindall and Frisoni. The major gain was that it bought IceArizona time…time to decide its future. If the owners cannot put a decent team on the ice this year their future is bleak and they know it. It’s not a matter of distance that fans must travel to a game. That rationale has been over used. When teams win people will eagerly travel long distances to watch the winner. A team that is a contender also fills seats in suites and attracts more expensive advertising dollars…the lifeblood of any team. Each extra playoff game earns in the neighborhood of a million dollars and can spell the difference between a bottom line in the black and a bottom line in the red.

Another important issue finally resolved is that of distribution of the bankruptcy Operating Reserve Account as follows: “10. The Parties acknowledge and understand that in the Bankruptcy Settlement, subject to approval by the Court, the Bankruptcy Lawsuit (the “Bankruptcy Court”), the Operating Reserve Account shall be distributed as follows: $350,000 to the City, $10,000 to the David Reaves, Chapter 7 Trustee of the Arena Management Group, L.L.C., and $640,000 to Ice Arizona.”

In the same radio interviews, Sherwood stated that he wants “to see a new contract (with IceArizona) in 6 to 9 months, by April of 2016.”  LeBlanc stated IceArizona “wants a contract extension immediately” to bring “certainty.” Obviously it is an option both parties will need to pursue. Let us hope they can be successful in crafting a lease extension that is not build on the backs of Glendale’s taxpayers. No one can object to a lease agreement that is fair and equitable.

Be advised it doesn’t matter what the action or situation is, municipal governments do not move quickly. While an immediate contract extension is IceArizona’s goal, the caution is to not become frustrated if the action is not completed quickly. I learned this lesson the hard way. When I first joined city council I had ideas for projects in my district. I mistakenly thought they could be accomplished instantly. Not so. I became satisfied if a project could be completed within a year. It’s the very nature of government. All action is slow, overly deliberate, and far more complicated than it often needs to be.

Everyone appears to be relieved the issue is resolved for now. Let’s hope this positive action leads to further positive outcomes for both parties.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Jul 15

30

Love or money?

Posted by Joyce Clark on July 30, 2015
Posted in Arizona Coyotes • City issue and actions • City of Glendale • Gila River Arena • Glendale finances • Westgate  | Tagged With: , , , , | 3 Comments

It has been 17 years and 210 days since the city’s pledge to build the West Branch Library.

Nearly all major battles we face seem to revolve around either love or money. In the case of the Coyotes vs. Glendale it’s definitely money. Before I post a blog on the current deal between these entities it’s important to understand the effects of the biggest driver — money.

Westgate and its sales tax revenue is an important component. It cannot be denied that the majority driver of retail sales tax revenue in Westgate comes from Tanger Outlets. Before Tanger’s opening in November of 2012 retail sales tax revenue was under a million dollars a year. Tanger, when it opened, was projected to earn $2M in sales tax revenue and in fact, from the start, has generated closer to the $2.5M mark.

As you can see from the chart below in calendar years 2013 and 2014 retail sales tax revenue was over $3.5M and almost all of it is attributable to Tanger. In October of 2014 Tanger expanded and the city can now expect an estimated $4.5M in retail sales tax revenue in 2015. Restaurant/Bar sales tax revenue has also increased over time and can be related to football games, hockey games and concerts held at the University of Phoenix Stadium and the Gila River Arena. This component is also attributable to the opening of new restaurants in Westgate. This sales tax revenue has grown as well and is estimated to earn some $3M. “Other” sales tax revenue is composed of bed tax, AZSTA stadium city sales tax, licenses & permits, etc. It is estimated to earn about $5M in 2015.

In 2015 estimated sales tax revenue from Westgate looks like this: Retail — $4 to $4.5M; Restaurant/Bar — $3 to $3.5M; and “Other” — $4.5 to $5M.

Westgate sales tax

The argument often used by Coyotes’ supporters is that the spillover effect from 42 nights of hockey games is essential to Westgate’s restaurants and bars survival and to the city. How much of that spillover is from 70,000 fans attending each of 10 football games? Admittedly it is substantial and could account for anywhere from 1/3 to ½ of the sales tax revenue generated from restaurants and bars annually.

The point is that Westgate has grown despite all of the drama and turmoil of the Coyotes and is strong enough to survive with or without them. If one looks at all of the factors that determine annual sales tax generation at Westgate the Coyotes (from hotel stays and restaurants/bars) are estimated at driving about $2M a year out of a total estimated annual sales tax revenue of a low of $11.5M to a high of $13M.

As long as we are on the subject of money there is another factor to consider. Many Coyotes fans are hoping that the Coyotes will move to downtown Phoenix or a new arena at Talking Stick. Dan Bickley in a recent July 26, 2015 Arizona Republic story entitled Coyotes not out of the woods – or Glendale – just yet said, “Sarver says his Suns pay $23 million a year just to play at US Airways Center: $12 million in debt service, $8 million in arena management costs and $3 million in rent. A new arena capable of housing a NBA team and a NHL franchise starts at $500 million, and that’s being conservative.” Kudos to Robert Sarver for publicly offering some expense figures (no revenue figures, mind you). That’s more than anyone has seen from the Coyotes. Any public figures associated with the Coyotes have been minimized or denied by Anthony LeBlanc, an owner and visible spokesperson for the ownership group.

The question for the Coyotes becomes can they afford to move anywhere? Sarver is not in the charity business and I suspect that the owners of Talking Stick are not either. All bets are off if the Coyotes move out of Arizona. Is there an entity out there willing to pay the Coyotes to play in a newly constructed arena? Who knows? The Coyotes will have to pay to play anywhere else in Arizona and as long as they continue to suffer losses of an undetermined amount their options are very limited. No one is offering any love to the Coyotes these days and their entire future is being driven by only one thing – money.

© Joyce Clark, 2015

FAIR  USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Jul 15

15

Glendale says, “no”

Posted by Joyce Clark on July 15, 2015
Posted in Arizona Coyotes • City Council Actions • City issue and actions • City of Glendale • Gila River Arena • Glendale elected officials • Glendale finances  | Tagged With: , , , , | 5 Comments

On Wednesday, July 15, 2015 Darrell Jackson, for the Glendale Star, posted a story online in which he reported two sources (not councilmembers but apparently city administrative staff) have confirmed my speculation that the Monday, July 13, 2015 city council executive session was to discuss an offer made by the Arizona Coyotes. Not a bad guess for a former councilmember.

It raises more questions other than answering only one — what was the subject of the e session? If Jackson’s sources are correct the Arizona Coyotes had offered to drop their management fee to $8M for the next 3 years.

Without knowing any more details of the purported offer, the first thought is, don’t the owners of the Coyotes realize they are virtually confirming they plan to exercise the opt-out clause in 3 years? The second thought is city council is absolutely convinced they have a solid legal case against the Coyotes. You can be sure we have not seen all of the city’s cards when it comes to the 2 former city employees, Craig Tindall and Julie Frisoni. I suspect we will not find out how much more there is to know until the discovery phase of the trial — which seems more certain to occur than ever.

Offering to pay a lesser management fee while keeping the opt-out clause does not sound like much of a win-win deal. The city pays the team $8M a year to play in its arena for the next 3 years and then the team leaves? Again, who is going to pay the Coyotes $15M or $8M a year to play in their venue? You can be sure the City of Phoenix and Talking Stick won’t. They have management companies. No, the only thing they will expect is a hefty rental payment from the Coyotes. It seems as if the handwriting is on the wall. No one, other than gullible Glendale has been willing to pay them to play and now, even Glendale has decided that it’s not such a great idea.

If the Coyotes owners are as committed to staying as they claim they are, the first concession they should have made to the city was to remove the opt-out clause but they didn’t offer that carrot. Why? Because they plan on exercising the provision in 3 years. For all those die-hard Coyotes fans out there, what will it take to make you believe that it is quite possible that the Coyotes are not here for the long haul, despite what the sometimes dubious truth teller Anthony LeBlanc has been saying? You know which Anthony LeBlanc I’m referring to. It’s the one who denied Andrew Barroway’s purchase of 51% of the team only to retract his denial. Yes, I realize Barroway is no longer the majority owner but he was for a brief time and LeBlanc originally denied it when it was first reported.

Jackson reported that several administrative staff would like to see arena management separate from the team. At this point in time, that seems to be an idea worth embracing. Hang on folks. This is a new chapter of Coyotes history, barely written and I suspect there is much, much more to come before this chapter is completed.

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Jul 15

15

Would Coyotes fans pay more?

Posted by Joyce Clark on July 15, 2015
Posted in Arizona Coyotes • City Council Actions • City issue and actions • City of Glendale • Gila River Arena • Glendale finances  | Tagged With: , , , , , , | 14 Comments

It has been 17 years and 195 days since the city’s pledge to build the West Branch Library.

Recently ‘thevintageguy,’ one of the regular commenters to my blog posts, offered an interesting idea. He calculated that if every hockey ticket for every game had a surcharge of $24 it would generate $15M annually in revenue. If that surcharge were applied IceArizona would not need the City of Glendale to pay $15M a year for a management fee.

I decided to explore that idea but first, some history. The city owned arena opened in December of 2003. Let me remind you there was no arena management fee that the city had to pay. Steve Ellman led a group of investors who bought the Coyotes. Ellman may be many things to many people but he took immense pride in the arena, the Coyotes and the events he booked. Back then concerts were far more frequent. Bette Midler, Britney Spears, Elton John and U2, to name just a few performers, played at the arena in its early years. During the years of his ownership of the team the Arizona Sting (now defunct) also played all of its games at the arena. While the Arizona Sting was probably not a money maker during the years of its existence from 2003-07, each year it successfully increased its fan base. It certainly was not a deterrent to Jerry Moyes’ acquisition of Ellman’s interests.

Ellman realized how important it was to his bottom line to keep the arena busy all year long. Ellman’s downfall was his inability to develop a substantial amount of commercial and retail surrounding the arena quickly enough. To focus on that aspect of his business he sold his interest in the hockey team to Jerry Moyes. Then the national recession hit and he was unable to hold on to his interests within Westgate.

Under Moyes there was no arena management fee that the city had to pay. Moyes seemed not to be as committed to the health of the team and its bottom line as Ellman had been. Unfortunately Moyes ran the team’s finances into the ground. Apparently he diverted team revenue to his other businesses and subsidiaries. By 2009, Moyes asked the city to begin payment of a management fee of $12M a year. The city refused. Moyes declared team bankruptcy all the while working a secret deal with Jim Balsillie to buy the team out of bankruptcy. The court stopped that scheme and the NHL assumed control of the team. The NHL demanded an annual management fee of $25M knowing that the city needed to buy time until a new team owner was secured. It was precedent setting. From that point forward any potential owner of the team had a green light to require that the city pay a management fee.

In 2013, IceArizona bought the team with the NHL’s blessing and so the management fee scheme was retained with the city paying $15M annually. The IA management agreement has a revenue sharing component but the revenues generated annually and paid to the city have been approximately $8M short every year in covering the annual $15M payment.

Recently the city council voted to cancel the contract with IceArizona (IA) alleging a conflict of interest by two former city employees. IA immediately went to court and obtained a Temporary Restraining Order (TRO). The judge required the city to make its quarterly payment of $3.75M on July 1, 2015 to pay for services already rendered and the city has done so. The court also required IA to post a bond of $1M and IA has done so. On July 29, 2015 both parties will be back in court and the judge will make a determination if the TRO should become permanent pending the outcome of the suit regarding the contract cancellation.

On Monday, July 13, 2015, the Glendale city council met in executive session. It is my strong belief that the subject of that meeting was the litigation between IA and the city. I suspect IA made an offer amending the existing contract and their offer was rejected. It appears as if the city council is convinced that its allegations are solid and provable in a court of law. Just think about it. If there had been a desire on the part of council to accept an offer from IA there would have been a press release issued after executive session. That has not occurred.

Back to the ‘vintageguy’s’ idea. Basic research reveals the following annual attendance figures for the Coyotes, courtesy of hockeyDB.com at http://www.hockeydb.com/nhl-attendance/att_graph.php?tmi=7450 .

“Phoenix Coyotes Yearly Attendance Graph. This is a graph of the home attendance of the Phoenix Coyotes, a hockey team playing in the National Hockey League from 1996 to 2015. Attendance is based on numbers from a team or league, either released as an official yearly per-game average figure, or compiled into an average from individual boxscore attendance. In some cases when boxscore attendance is unavailable for a small number of games, the attendance is computed omitting the missing games and annotated as approximate. Clicking on a season’s bar will bring you to a graph of all teams in the league.”

The average attendance figure for the Coyotes for the last 5 years is 13,133. Multiply that figure by 41 games a year and the average total attendance for a season of 41 games is 538,453. If you divide $15M (annual city payment of management fee) by 538,453 each ticket for each and every game would require an additional $27.85. If a hockey fan were to buy a ticket for each of the 41 games per year the additional annual amount he/she would pay would be $1,141.85. What do all of these numbers mean? If hockey fans paid more for every ticket IceArizona would not need the $15M a year from the city. Now that sounds like a plan.

Let’s look at it another way. Each year even with IA’s revenue sharing the city is in deficit for the $15M annual payment by about $8M a year. If revenue sharing were to remain and the same ticket increase scheme were used to cover the $8M a year deficit, each ticket would need to be increased by $14.85 which comes to a total increase for a fan attending all 41 games of $608.85 a year.

I believe my figures are correct but even if they are off a bit don’t get bogged down in the numbers. Instead consider the concept. If fans were charged more per ticket per game with or without IA revenue sharing there would be no need for the city to pay an annual management fee of $15M. That would surely solve the city’s annual Coyotes related deficit. Whether it is $27.85 or $14.85 per ticket per game the sixty four dollar question is are Coyotes fans willing to pay either extra amount to keep the team in Glendale? Is it possible for them to redirect their negative anger to a more positive action – that of paying more to keep their team?

© Joyce Clark, 2015

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

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