This will be my last posting until after Christmas Day. With less than a week before Christmas family and friends, last minute shopping and baking consume my time. Here goes. This council is often disappointing because of their lack of substantive engagement. Their December 17, 2013 council workshop had a myriad of issues, some of them quite important.
When it came to the presentation on the Monthly Arena Reports we learned some new or corroborating information. The figures that are used by the city are figures provided by IceArizona. Mr. Duensing, Executive Director of Financial Services, stated that the expected annual arena revenue for this fiscal year will be $6,791,540 and the expected deficiency will be $7.1M. He indicated that as of November 30, 2013 (covers period from Aug. 5 to Nov. 30, 2013) the amount of revenue accruing to the city is $1,168,880. This means the enhanced IceArizona revenues to cover the $9M unbudgeted will be short by approximately $2M by June 30, 2014 (end of current Fiscal Year). I find it amazing that his forecasted estimate of annual revenue is so precise, down to the penny. Nevertheless, it portends that the city will be short a boat load of arena revenue this year.
The city budgeted $6 million dollars for arena management of the $15 million dollar total fee and expected IceArizona’s enhanced revenues to cover the $9 million dollars unbudgeted. Looks like that ain’t gonna happen. Mr. Duensing also answered a question posed in one of my latest blogs regarding the Supplemental Ticket surcharge of $1.50 per qualified ticket. He said we won’t see this total until the end of this fiscal year per the agreement. Fine but why isn’t a monthly amount being offered to the city in the monthly reports? After all, it’s their specific line item. I’ve been told that an escrow account has been established. It would be nice if the city received confirmation that X amount of dollars is being deposited monthly into that account. After all, it is an interest bearing account and the entire amount, including interest, could very well end up going to the city.
It also raises the question of the definition of what is a qualified ticket. Here is the agreement’s definition: “Qualified Ticket” means a Ticket to a Fee Activity for which (i) the Team Owner, with respect to Hockey Events; (ii) The Arena Manager or sponsor or promoter, with respect to Team Revenue Events, City Revenue Events and other Fee Activities that are not Events; or (iii) the City, with respect to City Sponsored Events, receives valuable consideration (whether in money, services, foods or other value). Any Ticket for which (i) the Team Owner, with respect to Hockey Events; (ii) the Arena Manager or the sponsor or promoter with respect to Team Revenue Events, City Revenue Events and other Fee Activities that are not Events; or (iii) the City with respect to city Sponsored Events, (a) receives no value, or (b) receives money (but not any other services, goods or other value) for such Ticket in an amount less than 25% of the retail priced stated on the face of such Ticket, shall not be a “Qualified Ticket”; provided, however, that, if the aggregate number of Tickets described in the immediately preceding clauses (a) and (b) that are distributed by the Team Owner for a given Hockey Event (other than a Hockey-Related Event) exceeds 1,750 then the Tickets described in the immediately preceding clauses (a) and (b) distributed by the Team Owner for such Hockey Event that exceed 1,750 shall be deemed “Qualified Tickets” for such Hockey Event, unless the City and the Team Owner mutually agree otherwise.”
I suspect the city has one interpretation of this paragraph in mind and IceArizona has another. I’ve learned that arena employee tickets purchased at a discount were counted as qualified tickets in previous years. Apparently now they are not by IceArizona. Is it because the discount is greater than 25%? What other categories of purchased tickets are no longer considered as qualified by IceArizona? Is IceArizona discounting a large number of tickets? If so, as a result, how much surcharge money is the city not receiving?
Apparently there is some sort of agreement that the number of complimentary tickets to be given away would average no more than 1,000 per game. It appears that IceArizona has far surpassed that average and in one case gave out 3,500 complimentary tickets for one game. The rationale for capping the number of complimentary tickets per game is that it frees up a greater number of qualified tickets to earn the city surcharge. I am hopeful that a Fiscal Year- end audit commissioned by the city will clear up many of these questions.
What was council’s reaction to the dismaying news that arena revenues will experience an approximate $7M deficit? Not a word. Not one single question asking how the projected deficit would be covered. Instead there was a chorus of “thank yous” to staff for bringing this information forward and making it publicly available.
The other substantive issue on council agenda was the Five Year Forecast. As presented by Mr. Duensing the bottom line is that the city faces everything from a minimal deficit of approximately $250,000 next Fiscal Year up to a substantial deficit of $30 million dollars within 5 years. He asked council to approve staff’s development of a short term plan and a long term plan to deal with these expected deficits. He received council approval to do so along with a chorus of confidence from councilmembers that the deficit can be overcome. Mayor Weiers said it best by asking everything be placed on the table and he hopes council has the courage to make some very difficult decisions. Every citizen of Glendale hopes council has that courage. What better Christmas present could there be?
© Joyce Clark, 2013
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Joyce,
I’m kind of lost on this part:
“Mr. Duensing, Executive Director of Financial Services, stated that the expected annual arena revenue for this fiscal year will be $6,791,540 and the expected deficiency will be $7.1M. He indicated that as of November 30, 2013 (covers period from Aug. 5 to Nov. 30, 2013) the amount of revenue accruing to the city is $1,168,880.”
Ice Arizona projected revenue of $8 to $9 million to give to the city, correct? Glendale was going to use that money to cover part of the $15 million arena management fee. Is the above passage saying revenue will come in at about $6.7 million, roughly $2 million short?
Yes Jason.
Not too bad. I know Glendale can’t afford the UN-budgeted $2 million but I was expecting much worse for the first year. The above numbers are projections based on reported figures, thus far, so I think the $6.7 milliion figure will increase slightly by the end of the fiscal year. I can see Ice Arizona hitting the $8 to $9 million figure in a couple of years as well once they procure more lucrative naming rights deals and increase events at the arena.
As expected the discussion on changes to add certain positions to the “unclassified” ranks were heated. CM Alvarez still talks about this change like it will affect the rank and file employees of the City of Glendale. The other interesting imformation was it appears this may have been spearheaded by the new City Attorney who reminded the Council that as the City Attorney he is held accountable for everyone who reports to him, including other lawyers and not legal staff. Anything that they do, can be brought back to the City Attorney according to state law. So maybe he has some staff members that he cannot just get rid of currently and wants to possibly have the ability to do so in the future.
With the discussion going in many different directions, the City Manager decided to halt any further action until a later time when the entire scope of the proposed action could be reevaluated and then resubmitted to the council for direction and ultimately approval.
(It would be nice if the new City Attorney would pay attention to the workshop meetings. From his seat at the end of the desk, next to the City Manager, the television camera catches him constantly going to his tablet PC and then back to his smart phone. I don’t see others at this meeting so preoccupied with their electronics.
I also noticed that at the last few council workshops , Ms. Frisoni has started sitting at the end of the desk next to CM Chavira. I don’t remember other Asst. City Managers sitting at the desk for the workshops but in the regular seating until they were needed for their presentation.)
Bob, I suspect the whole move to reclassify employees came from the new City Attorney. CM Knaack reported that they do this in Surprise which is where the City Attorney came from. I, too, noted that he is always on his devices.
My point was Joyce it was in general you reach a lot of people.Which is great.My point was there not giving away that many.At the time I new of the new # but needed to make sure.So didn’t say anything.My point give this some time you guys live in glendale.I know you want it to work joyce but some in glendale don’t .Which is crazy to want to hurt yourself.People that don’t live we lose a hockey dose not hurt.house prices higher taxes not are problem We go to games and spend money in glendale.Which helps glendale.but some people take that for granted and say you dont live here shut up up you have no say.I think my money is green Accepted alll over the world.I think people of glendale would want some.must be crazy!!
I really don’t know how anyone could say what the revenue will be for this season…I do know that the next on the 27th will sellout new yearseve will be close..So at the start of next year sellouts will be pens,boston,leafs,chicago the best attendence ever at JOBING.COM ARENA EVER,I EXPECT NOTHING TO CHANGE THE SECOND TIME,flyers,and montral..I might have missed a team but prettgy close..Nobody makes a mettion to th eticket prices for those high end games.That you can’t buy a lower level for less then a $100 and upper no cheaper then $65..There having no problem selling those tickets..So to be on the light side attendence will be at least 15,700 this year..That a pretty good increase for the first year..Plus glendale should be happy that ticket sales are going so well for after the first of the year.Everyone knows the coyotes increase attendence after the first of the year..Plus if there going by the 12,780 avg when they did the deal..Well what there to worry about then..Parking will change at westgate theyt will do the same as they do for the cards..I could see if we where 2yrs into this but its been just over four months..New tv deal in phx plus canada,long term deals….New food contract,tailgating…I could see if they where sitting around doing nothing but there not..Things take time I would say that ever year attendence will go up in early months..These no what there doing they not in it to lose..Very hands on except for players moves which is smart…So that tells me there is no big ego’s in there group.Well have a merry christmass and Happy New Year….
And your point is…. I merely reported the numbers that Glendale released publicly in its Arena Monthly Reports to date. Those numbers were supplied by IceArizona.
All my point is that if the # is 15,500..They will hit that # or be within 200 of it..Why no metion to the good job they have down..Ticket prices are higher after the new year for prime games = more revenue..They signed a long term tv and food contract..Suiet sales are way up,we had the biggest crowed ever at Jobing .com this year..They have brought in tailgating on Sat night games..New tv contract out of canada that brings the team Just under 8mil a year…Plus the radio deal and etc..They have also spent a lot of time with the fans,player continue to be modile people to are community…If I was them I would make a offer on the arena.Glendale does not want to be in the arena bussiness they should sell.Even if they lose a little..As bob has said ,they will get sick of being punched in the gut..Like you said we don’t know about parking at this time..But they meaning wesgate needs to play fair offer the same thing the cards get..Everyone on gamedays pay somthing..That is somthing the Mayor and council should be working on.They do have skin in the game they are partners in this..All I see one side busting there butts off and the other side complaining…That would make any owner unhappy but the coyotes are ther whipping boys of glendale..Why should that ever stop well it could in five years..Not due to money problems these guys have never faild..But do to the Mayor and some council members..Would you blame them..The main cocern in glendale should be camalback ranch…Trying to figure out how to make money there and get there money from the sports and ent induristy I would think..Now This is my opinion are attendence will be above 15,500 avg this year..Also my opinion is they don’t give away 2,000 tickets..Where that came from would be nice to know plus the proff on it..I wish people would give them a chance it been Just over 4months..They have done so much in that time..They should get some credit for it I would think….Have a great christmass and Happy New Year!!
Looking at the numbers the team reports in excess of 12,500 fans per game. The city reported surcharge revenue from about 9,500. Seems they are giving away about 3,000 per game and according to you Joyce they should analyze be giving away 1,000 that means that they owe the city surcharge for about 2,000 thicket per game. Seems the budgeted amount to manage the arenas of $6,000 was about right. I do not know how they city will ever get they money from parking I went to three games on free tickets and did not have pay for parking lots of free space available and now we could tailgate soon need to buy anything at westgate over price bars. What a deal as long as the tickets are free and I get to bring my own beer I will continue to have fun on the “city dime”
Tahj lets go with parking first.First no ice az is not playing on the same playing field as cards.For one places that you can park free for cards games you can’t.Except for behind the Harkins.So who at fault this I would based on the night of the deal.20% ice az 40% wesgate and 40% glendale.How do I come to that easy ice az don’t own the lots period.If I recall the “MAYOR” said he was going to work on that.I am sure I can go back to the tape.I emailed and ask him but he complained that he was getting to many email.Wow how long has he been in this field so that’s Laughable.He is the one who act’s like a big shot with his Mayor “#1 JERSEY ON” all threw Jobing.com arena. So he does ask for it then complains about it.This is somthing that will be taken after first of the year you can bet on that.City should be working on this Gary the other day ask him about it.But i won’t sqay what he said I didn’t ask him if I could.But you have cm alvarez who loves money but does nothing to go get it.So to round this part of your ? you had I say city should get working.If they fall short by a little yes blame always goes to the “COYOTES” There the whipping of glendale.One point I really never why ever body was surprised Sammy voted for the deal.It’s his district anyone if they woulds have comited polical suicide fact!!So moving on to your next ? you don’t have to park free you can step and do the right thing.Next you don’t have to take free tickets.Which in the past I have this year I have payed for every game except last fri.Stan said Merry christmas.Tailgating is one night sat it’s a great Idea.I know some don’t like Ice az which is fine but give them chance where off to sraight sellouts and standing room only.never has happened before at this time of year period.They must be doing somthing right.I really don’t care how they fill the arena for now.If there are a lot of people from canada so be it for now.A lot of damage was done over the yrs.It will take time I always say this .They bought into the nhl the coyotes come with it.They bought a model meaning tv deal out of canada .If that was not coming done the pipeline coyotes would not be here.no way these don’t make mistake like that.They don’t set themselves up to lose period ever.They have never lost at anything they do.Any smart person would bought this way a loan from the nhl and the bank.Plus a fare lease.It’s not there the team went into bk.They saved this team glendale and the city should be gratful that they stuck around for 4and half years.Give it some time it’s been 5months did we except a turnaround already no way.The only thing they did wrong was the thought more season tickets would have been sold after the sale.I would said no way not happing we lost everything twice with lockouts.A allstar game and 2012 run..That a shame because things where trending up .They are starting to see that right now.They are surprised or even dunb foned .Why the last two games sold out over 100%.It has to be there Marking to canada Kudos to them.For reaching to the big clane of snowbirds smart and more smart.Some don’t like but IT IS WHAT IT IS FOR NOW>Or kiss the team goodbye..So we all can do a part if you have a extra ticket give it way to someone who never been to a game.If you live in glendale support the team.Glendale over the next 15 yrs is going boom..Hockey works in”AZ” Period.IT WILL TAKE TIME A LOT ON THERE SIDE>but city needs to be a partner not a complainer FACT!!Happy New Year.This was my opinion that s all.I spell like shit sorry not at work where I would spell check.I cannot help I see words backwards.So please don’t be a key board warrior and insult me .If you have to you must be a child.I not talking about anyone but it does get old..Thank You have a great New Year GO COYOTES 2014 it a new year new owners new direction.Hop board and enjoy the ride!!
Ok I forgot to wish you and your family a merry Christmas Joyce, and thank you for keeping us up to date on what’s happening in our city.
I think it’s time right now for icearizona to pull the plug on this great misadventure. it’s obvious that the city of Glendale were wanting to corner the market on ANY professional sport team, NOT because they were interested, genuinely interested in promoting pro sports team in the area, bUT to use them as “boy toy’s” to be pimped out with only revenue in mind.
Any city or person MUST realize that in this life, you can only be truelly successfull if you have passion for what you want to be successfull at.
Maybe icearizona will cut the city a break and for Xmas, at midnight instead of Marley’s ghost coming along, maybe some semi-trailer trucks could pull up along side jobing.com..just as was done in Baltimore when they moved the Colts to Indianapolis and blow this popsicle stand.
It would be good really for both sides. The Coyotes may find a city and group of city leaders actually enthusiastic about having them and Glendale (and the rest of the valley) could take a step closer to becoming more economically solvent and become what Robert Robb says in his column today (12/20) about the the city and his theory that they may possibly yearn for boring.
Really, it’s nobody’s fault. It just going to take time to climb out of the hole that was in continual dig mode for a decade or more.
The team deserves enthusiastic backers, they are playing with that much intensity.
They deserve the respect and attendance (which is looking good the next month or two!)
But don’t be suprised if living nearby Westgate about 2a.m. some morning, you are awakened by the loud piercing beep, beeping of large trucks backing up to the arena..and I wouldn’t blame them one bit.
I don’t get it your point….. are you trying to say because Glendale is suddenly so not enthusiastic about Coyotes that IA would suddenly back the moving trucks up?
First…. that can’t happen unless the NHL gives it’s blessing. They didn’t just spend the last 4 years working to get an ownership group in place that would keep the franchise where it’s at….. just to suddenly pack up and slither off into the night. they had plenty of opportunities to move the franchise somewhere else (two cities come to mind that could have taken them on a moment’s notice.)
Second… Glendale stepped up on several occasions to keep the Coyotes where they’re at. Granted it helped put the city into the financial situation it’s in… but it isn’t the only item that put them there. It’s actually only a relatively small portion of it. But it is currently the only portion that at least has the ability to help crawl itself out from that hole. AND….. unfortunately…. it’s become the whipping post for everything else.
I would have ripped you before.Without even knowing little about you.Thanks all you have have done for are ccountry.i hope things work out for your family.Give the coyotes and new owners a chance that all.Happy New Year..
Tahj,are these numbers just being thrown out there..First it was a 2,000 now 3,000.I don’t think Joyce ever said 3,000 or new for a fact that 2,000 is the correct ###.I will will say this rumor is there not giving away 2,000 tickets a game..Why would I say that,because for years I was able to get free tickets.This year I am paying just like anyone does..
The text you pulled for the definition of a qualified ticket appears to be from a rather old draft of the proposal; not from the final agreement. Main differences: 1) the 1,750 limit is now 1,000, and 2) it’s an average over the season, not “for a given Hockey Event”.
I imagine that IceArizona will only pay out the city surcharge based on the actual qualified ticket count until such a time as the per-game average can be tallied across the full season.
You are correct in stating that the contract calls an average for the season in the distribution of comped tickets of no more than 1,000 per game. However, that seems to be irrelevant as I have been told by those who know that comped tickets are way over the average to date and in fact, 3500 were given out for one game alone.
As for the payment of the city surcharge that is based upon actual qualified ticket sales and must be submitted with specific figures for Glendale’s Monthly Arena Report.
The contract does not specify a distribution limit of “comped” tickets… it specifies a limit on non-qualified tickets. A “comped” ticket can become a qualified ticket (i.e., a ticket that IA owes CoG a city surcharge on).
$413,219 — city surcharge paid through 13 games
÷ $3.00 — city surcharge of $3/ticket
137,740 — subtotal (qualified tickets through 13 games)
150,460 — official attendance through 13 games
12,720 — difference (non-qualified tickets through 13 games)
978.46 — non-qualified tickets per game
Seems reasonable.
And it looks like the $1.50 per qualified ticket supplemental surcharge is deposited in an interest-bearing escrow account with First American Title Insurance Company. I can only assume these funds do not appear on the monthly reports because they have not been distributed to the city yet (city has no rights of withdrawal until 60 days after the end of the fiscal year… FY is defined as July 1 through June 30). And the city does collect the interest accrued on the portion of the principle balance they are owed (if they end up being owed any).
As Craig Tindall, former Glendale City Attorney and now attorney for IceArizona, has remarked, there may be a time when a court will have to decide what is a qualified vs. non-qualified ticket. As for attendance figures, they can and are often “massaged.” I will, for now, stick with the numbers reported by IceArizona to the City of Glendale.
NHL attendance figures are a count of tickets distributed, and teams “massage” attendance by distributing more tickets (discounted, free, whatever). The definition of “Qualified Ticket” in the arena lease agreement (the definition describes both qualified and non-qualified tickets) calls out tickets distributed. If it comes before a court, I think Ice Arizona would have a difficult time departing from the official NHL-recognized count of tickets distributed. Hopefully, this will prove to be a happy marriage and neither side will feel the need to resort to legal proceedings.
i really think the only ones worried about them paying revenue is glendale.I don’t think there worried at all.After the last two sellouts.Even knowing a lot of people from canada who cares sellout is a sellout!1