Jobing.com Arena
Well, well,well…Glendale has offered a crumb to its residents by making public the names of the four bidders that responded to the Beacon Sports RFP (at a cost of $100,000) for management of its arena, Jobing.com. More to come about the bidding process in a future blog.
The contenders are: Phoenix Monarch Group, R Entertainment, SMG World and Phoenix Arena Development. Have you noticed who is missing? We see none of the expected and well known players in either the arena management industry or the entertainment venue industry – Global Spectrum, AEG and IFG. I suspect that when they learned that as part of the bid Glendale was seeking their investment (counts for 10% of bidding score) they probably said thanks, but no thanks.
Let’s look at the bidders. First up is R Entertainment. It is a privately held company registered with the Arizona Corporation Commission in August, 2006. It is located in Scottsdale with 1-10 employees. Its Statutory Agent is Kerry Dunne and according to the media, a partner. It manages one venue, the Pepsi Amphitheater at Fort Tuthill County Park near Flagstaff. By the way, the seating capacity of the Amphitheater is 2,750, not quite a 17,000 seat arena. I congratulate them for submitting a bid but I fear they are way out of their league (no pun intended). Investment counts for 10% of the bid score and this company is too small to make a major investment in Glendale’s arena. Experience is another 15% of the bid score and the company’s management experience with the Pepsi Amphitheater does not meet managing a similar sports facility. Personnel accounts for another 10% of the score. The current management staff of the arena numbers about 135, full time and part time. With a staff of 1-10 people R Entertainment is simply too small to manage a venue of this size. This company’s bid could lose about 35% of available points according to the bid criteria. Quite frankly, it should have been rejected as not meeting the basic criteria of the bid.
Next up is SMG World whose headquarters are located in Philadelphia, PA. It is a world-wide event and venue management company established in 1977. It has the personnel and experience to manage Jobing.com arena and advertises on its website http://smgworld.com that it has managed 230 facilities. So it certainly is a viable contender. One problematical concern revolves around an old saying that you are judged by the company you keep. SMG has a relationship with the Bidwill subsidiary, Rojo Event Management. Yes, the same Rojo that submitted a bid to the city to manage its Youth Sports fields adjacent to the stadium. Rojo’s bid for management is greater than the current Global Spectrum contract and offers way less revenue to the city. This is the Youth Sports field bid the city should reject unless it likes being taken to the cleaners once again.
Another bidder has indeed risen like the mythical Phoenix Bird and that is the Phoenix Monarch Group (PMG). It was registered with the Arizona Corporation Commission in August of 2012 and its managing member is Arturo Jimenez. In the one telephone conversation I had with Mr. Jimenez (at Councilmember Lieberman’s request) he indicated that an Alvarez (don’t remember the first name) and Tony Herrera were part of his group (more about them in a minute). This group should sound familiar to you. It the group that Councilmember Alvarez brokered a meeting for with former Mayor Scruggs and former Councilmember Lieberman. At that time they were asking for about $7M to host 25 events. Their experience is problematical. They ran an event for the Hispanic Fire Fighters Association (HFFA) which ended with HFFA paying vendors because PMG did not. The only other event (that they classify as ‘major.’ I do not) PMG hosted was a Hispanic Festival for a Peoria Councilmember. PMG easily loses 35% of bid points for lack of experience, personnel and investment. But once again the specter of relationships is troubling. I do not know if the Alvarez Mr. Jimenez referred to is a distant, or otherwise, relative of Councilmember Alvarez. Mr. Herrera, another PMG participant, has a close relationship with Councilmember Chavira with both listed as managing members of two companies, Cool Heads,LLC. and the McCoy Group, LLC. At least in terms of public perception, if no other, Councilmembers Alvarez and Chavira should recluse themselves due to a conflict of interest. They have no business advocating for or participating in discussions and votes on choosing a Beacon bidder to manage the arena.
Last up is Phoenix Arena Development Limited Partnership. It is headquartered in Phoenix but according to the Arizona Corporation Commission it is a foreign limited partnership. It is a privately held company and owned by the Phoenix Suns Limited Partnership. The general partner of the Phoenix Suns Limited Partnership is JDM Sports, Inc. and as of 1992 Jerry Colangelo was its president. This company was created for one purpose only and that is to manage the Suns basketball team’s venue. It crafted a sweet deal for itself with the City of Phoenix. Reminds me of the Ellman deal, Coyotes and Jobing.com Arena. It has experience in managing one venue exclusively and somehow or another; I don’t think they will be making an investment in Glendale’s arena. More likely is that, if chosen, Glendale will end up making a hefty payment to this company.
So there you have it – the four bidders that Glendale taxpayers spent $100,000 to find. Pick your poison. It’s the height of chutzpah for Beacon to even present R Entertainment or the Phoenix Monarch Group as viable bidders to the council. Clearly neither one is qualified by experience alone, to manage Jobing.com. Left standing is SMG World with ties to the Bidwills or Phoenix Arena Development with ties to Colangelo. To date, we have not seen the details of any of these bids and have no clue as to the management fee any of these groups is requesting.
Keep in mind that NHL Commissioner Gary Bettman said the Beacon process was “silly” and it is. The same, major issue is before this council just as it was before the former council and that is, if you choose to keep the Coyotes in Glendale, Westgate viable and save the city’s third major economic area, you must pay the freight and use the team owner as the arena’s manager. The only issue for Glendale is what can it afford to pay to make that happen and will it be enough to keep the Coyotes long-term?
Last paragraph is an interesting take on Westgate…if they Coyotes are what is keeping Westgate afloat, how did revenues increase 57% during the lockout??
Tanger Outlet Mall is considered part of Westgate and it just opened. It bumps up revenue. It contributes toward arena construction debt but obviously with the city projection of a million dollars in sales tax per year, that’s not going to cover the debt. It will help.
Hmm… When the Coyotes were the anchor tenant, the center went into foreclosure… Once Tanger opened up, businesses have never seen such revenue….
http://www.azcentral.com/community/g…ries-bars.html
Still not sure I’m following your last paragraph that links the issue of keeping the Coyotes in Glendale and the future viability of Westgate… seems the available figures contradict that.
I love it when people provide me selective information. If you had read anything from the Arizona Repulsive, you would have read where Teetsel says having the Coyotes as a sure anchor tenant will immediately cause at least 4 more locations to fill. I was just at Tanger Mall the other day. After shopping I drove and walked through Westgate. No hoards of spill over shoppers eating at restaurants at Westgate at high noon.
I still haven’t seen you address or provide any concrete information regarding the link between keeping the Coyotes and the future viability of Westgate. Nice projection by Teetsel but the facts from the past show that the center was in foreclosure with the Coyotes as the anchor tenant. Wonder why those locations weren’t filling then?
I’d also like to see how moving from an AMF of approximately $6 million budgeted to the $13-$15 million that Renaissance would be looking for in a sole source agreement with the city will generate enough revenue to ever justify doing what it takes to keep the Coyotes.
If the team is really such a money making machine, why is the general fund empty from propping up the losses of the Coyotes for the past few years?
First, Westgate went into foreclosure not because of poor performance but because of Steve Ellman. Ellman owned the vacant land and quite frankly, had spread himself too thin with his acquisitions/mergers of/with digital media billboard companies. His focus had shifted and he did not have the dollars for further development of Westgate during the period of this nation’s worst recession in decades. He couldn’t stop his properties from going into foreclosure with his lenders, Credit Suisse and IStar. As a side note, several entities have approached these banks to buy Westgate properties and the banks have turned them down.
I would be foolish to tell anyone that paying any arena management company something over $6M a year will suddenly make the city oodles of money. But what it will do is keep Westgate viable to finally jump start (now that the economy is starting to recover) development of the dozen or so entitled and planned commercial development projects surrounding it. Those new development projects will be the ones that create more sales tax (a healthy amount, I might add) for the city.
The contingency fund of the general fund is down below the city’s targeted goal of 10% of the total general fund. It was used for two issues: council attempted to stave off massive layoffs of employees by using contingency; and council used contingency to pay $25M/yr to the NHL to keep the Coyotes while attempts were made to secure a new owner of the Coyotes.The assumption was that a new owner could be secured quickly. Due to circumstances beyond the city’s control it has obviously taken a great deal longer.
Perhaps it has taken a great deal longer to find an owner b/c the NHL is a gate driven league compared to the three other major sports with TV deals and the Coyotes just don’t turn the stiles with tickets prices that actually generate revenue. Furthermore, anyone that has kicked the tires re the Coyotes doesn’t want to touch them with their own money, instead looking for an AMF (subsidy for losses) far beyond what the true cost of running the arena is to offset some of the guaranteed losses of a team that has yet to turn a profit since 1996.
Even with the sweetheart deal of $15 million/year that Jamison was inline to receive, he still couldn’t find enough people willing to throw good money into a bad investment.
Joyce it’s people like Glendale pessimist that cannot see the forest threw the trees. He fails to realize that once the Coyotes leave Westgate will be rats fleeing a sinking ship. AMC may be the only thing to survive. Glendale is all in with the Coyotes, Westgate, and Spring Training. They got Super Bowl and many prominent events. You cannot stop the growth. Has there been growing pains? Yes. Has the bubble bursting economic foreclosure explosion devastated Glendale? Yes….But your still standing. Get on your feet and prosper….dont bury your head in the sand and pray it doesnt rain. If Coyotes and Westgate fail…Glendale is that little forgotten city somewhere off the 101 everyone drives past.
As the two leading & largest Arena Management firms on the planet, rather unusual that Global-Spectrum (Flyers) and AEG (Kings) didnt bother submitting bids. Go figure… beautiful, state of the art building sitting on the edge of the 6th largest market in the United States, cant be bothered? Only a finite number of facilities its equal let alone size? Odorous to say the least…. and whats with 2 of the 4 bidders? Did they not read the criteria? Youd just dismiss, reject those out of hand would you not? With R Entertainment Group, ok, their ambitious, give it a shot, likely wont make the cut, they do Im sure realize their undersized, but hey, no harm no foul. Good for them. Old college try. But these other guys’? Not even close to being in that league.
IF THE CITY DOES NOT GET THE COYOTES TO STAY WESTGATE AND ALL OF THE RETAILERS WILL EVENTUALLY WILL BE ALL BOARDED UP AND EVEN THE CARDINALS STADIUM WILL FEEL THE HURT.
But, the city can still reject all 4 of these bids and keep the NHL as the Arena manager along with a deal correct? Sounds like that 100K fee to Beacon was another wasted step. There were a few businesses within WestGate that were on the verge of closing their doors during the lockout. I have a feeling that may happen if the team leaves. Sad.
The Tanger Outlet mall is much better suited as a replacement to Westage than a compliment.
Tanger Mall was assumed to be a feeder for Westgate. That has not occurred. However, the sales tax revenue of approx. $1M a year will go to pay off the arena construction debt. Tanger has its place and so does Westgate. Has anyone noticed that the same argument regarding the casino feeding Westgate is used ad nauseam. It will no more act as a feeder for Westgate than Tanger does.
The four bidders have to be qualified. It doesn’t matter what perception may say about any of these bidders, it’s about what benefits they can offer the city and its residents! As long as they meet the rfp qualifications criteria, then I say let’s take a look at them!
In fact, based on a cursory assessment, only 2 bidders are qualified.
Joyce, if the current council believes they will replace 41 plus events for the “mythical” 6 million they are about to be brought to earth. You are right about both “bidders” neither are attached to the arena or the city. Why would you seriously consider these, the best “one” is tied to the biggest competition in market. The second is tied to the Bidwells, lets say the Cards aren’t the only entity they have a “low rent” budget and low hopes on. The list reads more to me of a “Weires” for US Congress donor list more than a serious effort.