The other night I was surfing, trying to find the Coyotes/Blues game. I’m sure it was there but I simply couldn’t find it. The backup plan had me watching the Glendale City Council meeting. Now that council is allowing citizen comments at the beginning of the meeting we are seeing the usual citizen suspects resurfacing at the podium. Andy and Darcy Marwick, residents of Phoenix and dyed-in-the-wool Coyotes haters, opined on their usual complaints. Not to be missed was Glendale resident Bill Dempsky, a former City of Glendale employee, with his usual lament. Ken Sturgis, a Glendale resident, has also started to use this bully pulpit on a regular basis lately. Later in the council meeting Vice Mayor Knaack commented about these usual suspects and their constant references to past history. She felt it was time to stop referring to the past and she urged these citizens to look to Glendale’s future. She suggested that it was time to go back to the old agenda order and place citizen comments at the end of the meeting. We’ll see if that comes to pass.
Citizen Ken Sturgis offered some rather interesting comments. He referred to a “contract” between the city and IceArizona. He claimed that the city’s payment of $15 million dollars a year for arena management was going directly to Fortress and the NHL with IceArizona as merely a pass-through.. Those are the two groups who lent IceArizona the money to buy the team.
I decided to do some checking. Sure enough, I found the “contract.” Actually it’s a notification letter dated September 4, 2013 from IceArizona to the city declaring that as arena manager it had assigned its rights to Fortress and the NHL. Here is the link: http://www.glendaleaz.com/Clerk/Contracts.cfm . It is C-8584. The letter is signed by Daryl Jones, Chief Operating Officer for the team.
In it IceArizona acknowledges that an assignment of the arena manager notice must be given within 30 days. The sale of the team was recorded on August 5, 2013 and we can assume the assignment of rights was executed the same day. IceArizona notified the city one day before the 30 notification period ended requiring Ice Arizona to formally do so.
What does it all mean? Well, Mr. Sturgis was correct. The assignment of rights, including the $15 million a year for arena management, goes to Fortress and the NHL. That raises other questions. If the $15 million a year is going to their lenders and not IceArizona, how is IceArizona earning enough revenue to cover the arena operations and maintenance costs? The money they borrowed from these two entities went to pay the purchase price of the team. That means IceArizona must rely on revenue sources of ticket sales, suite sales, a percentage of the concessions, the first $20K in every event’s parking revenues, NHL revenue sharing (which are rumored to be as much as $20M a year for the team) and media contracts. It will be difficult to plug in the numbers for these revenue streams as some of it is proprietary. We will not get a full picture until after the end of the Fiscal Year, June 30, 2014. It is generally assumed that annual O&M costs are in the range of $20 million a year. Don’t forget that IceArizona also must come up with $9 million a year to be paid to the city. The city budgeted $6 million a year for arena management, not $15 million and IceArizona has pledged to cover the difference — $9 million a year. That $9M comes from the ticket surcharge, parking revenues after the first $20K per event and if necessary, the supplemental ticket surcharge. Are these revenue sources enough to cover IceArizona’s expenses? We, the public, don’t know. I suspect IceArizona knows.
© Joyce Clark, 2014
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.
Joyce…. some quick thoughts…
1) Some of the money’s coming back from IA are already showing up on the city’s “Follow Your Money” site. Not sure if you’ve been following it but it would be something worth tracking.
2) I do not feel it’s fair to judge IA so soon regarding meeting the $9 million number in year 1…. or possibly even year 2. The amount of damage that has been hoisted upon this franchise over the last 4-5 years wasn’t going to fix itself overnight. Anyone (like the usual band of suspects) who assumed that would either be fooling themselves, or wouldn’t care to begin with and have no life other than needing something to bark about for self gratification (most likely scenario). The real question here will be do we see improvement in year 2 over year 1?? If not… then I would certainly have some concerns.
Yes, I go to “Follow Your Money” quite often. If you will note arena revenue is $1,257,218.74 and arena expenditures are $247,457.06 to date. But keep in mind that does not include the capital account expenditures by the City. If I remember correctly it’s $500K a year and every couple of years it is required to be one million.
I think it is fair to judge after the first year’s numbers come in. That will foretell what Glendale can expect in ensuring years. The problem right now with the $9M not being met is Glendale’s current financial status.
You probably meant to say, “cast of unusual suspects” as nearly all of them very much fit that category.
Actually, if you watch the video replay, the contract referenced was C-8555.
Consent, Nondisturbance and recognition agreement and estoppel certificate – IceArizona Manager
http://www.glendaleaz.com/Clerk/Contracts/8555.pdf
I did write down which contract he referred to. Contract 8555 city grants authorization to IceArizona to sublease the arena. Contract 8584 is the IceArizona official notification to the city that it has transferred the entirety of its rights to specific entities, Fortress and NHL.
I will say this ,as long as that hits ice az banks first it matter where go’s that the law.How would I know right,this my cousin used Fedreal Judge said that they have to have.Funny thing was we just joking around where budget battles in his town be same.We went joking around with Ice AZ need lawyer poking fun at them.It was funny like said that by five one or two things are going to happen.Money if think they don’t have the 9mil should go ask Gosbee will answer that.they fianced about 90% of the deal SMART you have a city who is clueless in there action.plus the city got a better lease then the deal from Jan way better.The city and people of glendale should be jumping for joy not ripping on them all the time.What was Glendale choice BK.Because you see hard fill that arena Glendale would be bk in year having no clue how to run a arena..That’s my little repub coming out of me govt does bad job mang things like that.Lets all mwait until the end glendale yr before we jump on ice az.I tell you this there not even close to the red.Nhl as a whole is thrieving as a whole look at the game on Jan 20mil one event that just seats they get share of that a %.Their not broke far from it.Lets enjoy the coyotes after a long fight to keep them her a some worthless owners screwed everyone…
I wish I could understand what you are trying to say. I have no clue but unless it’s defamatory I will allow it to be posted.