There are figures available for the first six months of the Jobing.Com management agreement covering from August, 2014 through January, 2014. No figures are available for February, 2014 even though we are in March of 2014. We can expect them at the end of March. Why it takes a full month to publish the figures is a mystery. After all, the city is directly reporting the figures supplied to it by IceArizona. The agreement took effect in August of 2014 and there were no ticket sales that month.
The monthly arena report reflects numbers supplied by IceArizona, manager of the arena. It reflects ticket revenues to the city on qualified ticket sales only. Non-qualified tickets could be anything from discounted to comped tickets. The qualified tickets per game do not reflect total per game attendance as reported publicly by IceArizona. The arena has a seating capacity of approximately 17,700. Some of the games were reported as sold out – standing room only. A portion of the ticket sales for those sold out games must have been discounted or comped and therefore not counted as qualified tickets requiring the surcharge of $3 per ticket. It appears as if the city is not earning the revenue it could. Perhaps more of these tickets should be considered as qualified. Here is a summary of the qualified tickets that actually earned the city revenue month by month:
# of hockey Ticket Surcharge divided Average number
events by $3 per game of Qualified tickets/game
August, 2013 0 0 0
September, 2013 1 $16,413 ÷ $3 5,471 (1 game)
October, 2013 7 $203,289 ÷ $3 9,680 (7 games)
November, 2013 6 $193,517 ÷ $3 10,751 (6 games)
December, 2013 4 $153,975 ÷ $3 12,831 (4 games)
January, 2014 10 $355,135 ÷ $3 11,837 (10 games)
A question that has never been answered satisfactorily is how come the Interest Income on the Escrow Account was posted at $4,620 as of September 30, 2013 and that number has not changed to this day? There is no posting of any accrual to that account in Oct.- Nov.- Dec. or Jan.
As of January 31, 2014 the city has spent $6,502,055 toward the $15,500,000 owed this year per the arena agreement. Offsetting revenues earned of $2.7 million have not covered the $6.5 million spent and to date the city has a loss of $3,705,324.
If there are no playoff games the total revenues for the city for FY 2013-14 which ends June 30, 2014 can be estimated at $6 to $7 million dollars. Add another approximate $1 million in Supplemental Ticket Surcharges ($1.50 per qualified ticket) for a total revenue estimate of $7 to $8 million dollars. The city will pay out $15.5 million this year. It is estimated that the loss will be somewhere in the neighborhood of $7.5 million dollars on the arena this year.
Then there is the annual arena construction debt payment at an estimated $12 million a year. It is offset by the sales taxes earned at Northern Crossing, Cabela’s, Tanger Outlets and the businesses in surrounding Westgate. It does not include sales tax earned inside the arena as that is counted as part of the arena revenue of $2.7 million to date. The estimate of the amount of annual sales tax earned from these sources is approximately $4million. That means the city will have to find an estimated additional $8 million to cover the shortfall on the arena construction debt.
The underperformance of both revenue sources: arena revenues and Westgate/Northern Crossing/Cabelas sales tax revenues will fall short and cause the city to pay an estimated $15 million this year over and above all revenues earned. The only ways the city can continue to subsidize arena expenses is to: raise the temporary sales tax and make it permanent; increase property taxes and reduce city services by eliminating some or privatizing. The question for every Glendale resident is, is it wise to continue to subsidize arena losses by raising taxes and reducing/eliminating city services?
© Joyce Clark, 2014
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If these numbers do indeed pan out at year’s end it seems that the 9 million ceiling that IceAZ was suppoverallosedly aiming to raise for the COG is short by about 2 million, which is better than I thought it would be, Am I reading it right Joyce? Thanks. What will be very telling will be what the IceAZ loss is for the 1st year, assuming they or someone else releases it.
IceArizona pledged up to $9M in “enhanced revenue” to the city.
City pays $15.5M annually for management and capital account.
If estimated figures become reality “enhanced revenues” will indeed be less than $9M (approx. $7M).
IceArizona’s profit and loss figures are proprietary and I doubt we will ever know.
yes, it is proprietary but if it gets to the $50 million over 5 years I think all will be made quite aware of that!
Why is the potential $7.5 million expense now a ‘loss’ when for so many years it was an ‘expense’ to run the arena built with the approval of the Mayor and City Council?
As to the final question here, are you now changing your stance and recommending shuttering or bulldozing the arena as a solution?
Art,
Keep in mind that until Moyes declared bankruptcy the city paid NO management fee whatsoever. With the addition of a management fee the revenues the city earns are less than that fee — which represents a loss.
I think the time has come for a serious discussion/consideration of selling the arena. It removes the management fee and construction debt that city can ill afford.
Using a bankruptcy to make your point proves the reverse, Moyes could have survived with a management fee and the NHL would have never owned the Coyotes.
The management fee and the 15 million dollar number used as the basis for the current ownership group was lifted from the deal you supported wholeheartedly.
The current deal should be less of a strain on the city than the Jamison deal, even if the projected revenues fall short they are still more than the previous buyer offered.
The financial situation of the city has not changed for the worse, really, so why is it now time to sell the arena?
Who would buy the arena? That doesn’t happen, most arenas are publicly subsidized.
What about the Met Life Stadium, host to the latest Super Bowl? It is 100% privately financed.
Hi Joyce,
When is the arena expected to be paid off?
The construction debt is for 30 years. The arena is now just over 10 years old. There is another 20 years to pay on construction debt.
I think you may be incorrect the city just refinanced most of the arena debt last year with the baseball debt for another 30years if my memory servers me correctly. May that is something the city staff may answer someday soon with the new and improved transparency in budgeting
If I remember correctly the arena debt was not refinanced. Debt restructuring was for MPC debt – Camelback Ranch, Media Center and Parking Garage.
I know it would not even put a small dent in the financial shortfall, but maybe the each City Council member should pay a seat surcharge each time there is a council meeting or workshop. That would be a reminder to how stupid they were to sign the arena agreement.
I’m helping out..I just bought a 2 year season ticket and a 2 year pass to LOTG, which goes to the city or at least a portion of it does. All kidding aside though, I sure hope this team can make it and most of all get the people of Glendale on it’s side.
I go to all of Phoenix and ASU’s game and this team BY FAR is the most exciting team in town.
I sure wouldn’t drive to Glendale for the melon festivals or light shows. Hick towns back in Indiana have those.
This team is an unprecedented source of excitement for the area..
But in the end, relations with their host city have to be on a great (not good) level..
if they aren’t I guess maybe the team should leave.
Thanks for putting some revenue in Glendale’s coffers!!
I’m with you!! I also renewed for the 2 year deal with parking in Lot G. I support the coyotes!! I will also be attending JT and Katy Perry concerts. I have attended almost all concert events held at jobing. I live in Peoria. And don’t mind supporting my surrounding cities.