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Joyce Clark Unfiltered

For "the rest of the story"

Mar 16

5

Repercussions

Posted by Joyce Clark on March 5, 2016
Posted in City issue and actions • City of Glendale • Glendale elected officials • Glendale finances  | Tagged With: , , , , , | 5 Comments

It has been 18 years and 79 days since the city’s pledge to build the West Branch Library.

It seems the latest Sammy saga is not quite finished. In the Arizona Republic of March 5, 2016 Paul Giblin has yet another story about it entitled Phoenix employees to repay $420 dinner bill sent to Glendale. It is not online yet so I cannot provide a link.

This story reminds me of the symbolism of throwing stones into a pond. The ripples made by the stones intersect and affect how each reacts.

The first three lead paragraphs say, “Several Phoenix employees will personally reimburse Glendale for their portions of $420 seafood dinner in Washington, D.C., that Glendale Councilman expenses to Glendale taxpayers in 2014, according to a Phoenix spokeswoman.

“Phoenix Communications Director Julie Watters requested an itemized receipt for the meal from Assistant City Manager Tom Duensing on Friday, the day a story about Glendale Councilman Sammy Chavira’s travels appeared in The Arizona Republic.

“ ‘The city of Phoenix is requesting a copy of this receipt with the intent that Phoenix employees who were at the dinner will personally repay their portion of the meal,’ Watters stated in the email.”

There are a lot of sub texts to this story. It is amazing that Julie Watters’ information request to the City of Glendale was filled almost immediately. The general public’s requests for information are not nearly as timely. I guess as Phoenix’s Communications Director her public information requests take precedence.

For two years this dinner was unnoticed and unreported publicly. None of the participants, including the Phoenix contingent, appeared to be ethically challenged about their action and never offered repayment for their portion of the dinner. It wasn’t until it is revealed publicly that the wagons are circled and repayment is forthcoming.

It leads to an assumption that the Fire Chiefs Kalbrenner and Burdick had no problem with a subordinate employee picking up the tab for their high priced meal. The question arises, is there a pattern of such behavior? Of course, Sammy was using his office as a Glendale councilmember but in terms of the Phoenix Fire Department he is a subordinate employee, quite far down on the food chain.

Giblin in his article states that Fire Chief Kara Kalkbrenner and Kalkbrenner’s husband, Kevin, Phoenix Director of Emergency Management were two of the attendees. It appears Phoenix does not have a nepotism policy.

Also in attendance was Phoenix Councilmember Danny Valenzuela, a good buddy of Chavira’s. Nowhere in the article does it state that Valenzuela will be using personal funds to pay for his portion of the dinner. Then Glendale Fire Chief Mark Burdick was in attendance as well. He happens to be Danny Valenzuela’s boss as Danny is a Glendale firefighter. How ethical is it to grant access to some subordinates and not others? If I were a Glendale or Phoenix firefighter I would not be thrilled to learn of Chavira and Valenzuela using their councilmember positions to gain extraordinary access to their fire chiefs.

This story about Sammy’s dinner is probably the tip of the iceberg. There are many tangled interrelationships in politics and municipal affairs and generally they turn out to not serve public interests very well. The repercussions of Sammy’s dinner may have a far greater effect than anyone could have imagined.

© Joyce Clark, 2016

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 ‘fair use’ of any such material. 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.

Dec 15

3

Coyotes in a pickle

Posted by Joyce Clark on December 3, 2015
Posted in Arizona Coyotes • City issue and actions • City of Glendale • Gila River Arena • Glendale finances  | Tagged With: , , , , , , , , | No Comments yet, please leave one

It has been 17 years and 336 days since the city’s pledge to build the West Branch Library.

It seems that Thanksgiving got in the way of much blog writing recently. I hope your Thanksgiving Day with family and friends was enjoyable. I hope you ate too much, laughed too much and watched too much football.

It was announced that the Coyotes hired Mitchell Ziets, CEO of Tipping Point Sports, LLC, to assist in an exploration of options for the team including a move to another venue from the Gila River Arena in Glendale. Let’s explore the reality of this option.

In a November 2, 2015 story by Craig Morgan several possible venues are offered for consideration by the Coyotes. Here is the link: http://arizonasports.com/story/436156/coyotes-in-discussions-with-at-least-three-separate-groups-for-new-valley-arena/ .

In his story Morgan offers this comment from Anthony LeBlanc, “At some point you have to make a decision that you can’t continue to talk to a wall, Coyotes co-owner, president and CEO Anthony LeBlanc said. You have to accept reality and look at what your alternatives are. That’s where we are right now.” From the time LeBlanc’s group, IceArizona, commenced its deal with Glendale for the use of its arena the Coyotes simply refused to talk to and to share information with Glendale. They were decidedly off the reservation. It has only been since the new, two-year deal was inked that IceArizona has decided to play nice with Glendale.

IceArizona may very well leave Gila River Arena in two years but options to play elsewhere in the Valley are more limited than current speculation would lead one to believe. LeBlanc admits to “conversations” with Phoenix about the possibility of a shared arena with the Phoenix Suns. Out of curiosity I checked the 2015-2016 playing schedules for both teams. Here are some comparisons:

                                                            Phoenix Suns                 Arizona Coyotes

Season                                                10/28/2015-4/13/2016     10/9/2015-4/13/2016

Number of total games                                     82                                        82

Number of home games                                   40                                        41

Out of the 40+ plus home games each team plays at its current venue, if they currently played at the same shared venue, 12 playing dates would conflict. That is ¼ or 25% of their home games. To be fair, we know that can be remedied by the leagues with a gnashing of teeth and the pulling of hair. It has worked before when the Coyotes and Suns shared a venue. One would think the Coyotes fans have warm memories of their experiences in sharing a venue with the Suns and are eagerly looking forward to do so again.

In a recent December 2, 2015 Paul Giblin story in the Arizona Republic, he cites issues that Phoenix would have to consider. Here is the link: http://www.azcentral.com/story/news/local/glendale/2015/12/02/arizona-coyotes-arizona-cardinals-wont-bid-manage-glendale-gila-river-arena/76564718/ .

  •  How much would a new arena cost? The Milwaukee Bucks’ planned new arena is pegged at $500 million.
  • How much would be privately funded? How much publicly funded? Would the public-funding source be municipal, state or some combination?
  • Can voters be sold on the idea of picking up any portion of the bill?
  • Where specifically would an arena be built?
  • When would it open?
  • Can the Suns and Coyotes work out an agreement to split revenues?

Let’s look at other possible venues. Tempe and/or Scottsdale are possible candidates. Would the voters of Tempe and/or Scottsdale approve the construction of a $180 million dollar building (cost of Gila River Arena construction in 2005) and agree to subsidize, year after year, a team that is not profitable? Remember those who do not read history are doomed to repeat it. I would think many voters would be very aware of Glendale’s history and that could certainly cause them to think twice about such a proposal.

Arizona State University has been mentioned as well. ASU receives substantial funding from the Arizona State Legislature. It is conceivable that a majority of legislators may balk at the idea of state taxpayer money being used to subsidize a for-profit company.  If ASU can fund and subsidize such a project with new, private dollars and not divert private dollars already committed for existent programs then it is possible. But wait, didn’t ASU Hockey just commit to playing its games at Gila River Arena? If that is the case, wouldn’t ASU have to build a new venue?

The last location on the menu of possibles is Talking Stick. That is certainly do-able. An Indian reservation is not subject to federal, state, county or local laws. The tribe is free to build what it wants to build on reservation land.  One has to wonder if this tribe would be willing to invest in the construction of another major venue as well as subsidizing the team in perpetuity.

There was an interesting article published on October 20,2015 by the Flordia’s Sun Sentinel regarding the NHL Florida Panthers and a Broward County proposed deal. Here is the link: http://www.sun-sentinel.com/local/broward/fl-panthers-subsidy-debate-20151020-story.html .

In some ways their deal is like comparing apples and oranges for Broward County has a population of 1.87 million people and includes 24 cities. That in itself is much different from Glendale’s population of approximately 240,000 and the fact that it is one city having to deal with a hockey arena. Some elements of their proposed deal are eerily similar to the Glendale/Coyotes deal. As of this date their deal has yet to be approved but here are some of the deal points which would expire in 2028:

  • The Panthers would continue making $5.3 million annual debt payments toward the county’s $15.3 million obligation.
  • Receive $86 million from the county, or $6.6 million a year on average, but in a schedule of front-loaded payments that starts at $12 million a year. Of the total, $39 million must be used for capital expenses at the arena, $45.5 million for operating expenses like paying the electric bill or property insurance, and $1.5 million to lure a “high impact event.”
  • Provide an irrevocable letter of credit to protect the county’s financial investment if the team defaults, files bankruptcy or relocates.
  • Grant the county development rights on land surrounding the arena, where a mixed-use entertainment complex could be considered.
  • Share proceeds with the county if the NHL expands between 2015 and 2021 and gives teams expansion proceeds. After the Panthers’ losses are covered, the county would get the remainder of the one-time expansion payment.
  • Give the county 10 percent of profits if the team, made more valuable by this new deal, were sold.
  • Give the county authority to approve where the money for capital projects is spent, and authority to replace the Panthers’ Arena Operating Company with another arena manager if needed.
  • Allow the Panthers to get out of the contract in eight years if it’s not working out. They’d have to give a year’s notice, show losses of $100 million over seven years, and pay a termination amount. For example, if the Panthers leave in year 8, they’d pay back the full $72 million the county would have given them by then.

No matter where the Coyotes end up in the Valley, whether they remain in Glendale or move to another location, their quest to be subsidized by a governmental entity is surely a public policy question deserving of much public discussion. The people of any city have a right to weigh in on the question of their tax dollars being used to subsidize a private, for-profit company.

© 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.

Apr 15

6

“Here to stay”…but in Glendale?

Posted by Joyce Clark on April 6, 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: , , , , , , , | 2 Comments

It has been 17 years and 95 days since the city’s pledge to build the West Branch Library.

For 4 years, from the time Jerry Moyes declared the team bankrupt in 2009 until the end of 2012, as a councilmember I was part of the high drama surrounding the Arizona Coyotes and the arena, a city owned facility. Suitors to buy the team came and went with regularity. The city paid the NHL $25 million a year to manage the arena while everyone desperately hunted for a new owner. In 2013 a new city council was seated and promptly approved the current management agreement of $15 million dollars paid annually to IceArizona, the new owners of the team. If truth be told that $15 million goes directly to Fortress Lending and the NHL as interest payments on the IceArizona’s purchase debt owed by LeBlanc, Gosbee, and et.al. If you remember the cash raised for the team purchase was approximately $45 million. The rest of the purchase price of $170 million was strictly debt. Today Andrew Barroway is the majority owner (51%) of the team.

A recent article on March 30, 2015, by Mike Sunnucks of the Phoenix Business Journal entitled Could the Phoenix Suns, city build a new arena at Phoenix Convention Center site? It is intriguing to say the least. Sunnucks reports on speculation about where the Phoenix Suns will be playing its games in the future, “ ‘US Airways Center is owned by the city of Phoenix and the Suns lease doesn’t expire until 2029’, according to city spokeswoman Deb Ostreicher. The Suns could look to the city for renovations of the downtown arena or could look for a new home.” Sunnucks goes on to say, “One scenario being talked about — at least in real estate and downtown Phoenix circles — is a new arena being built where the current South Building of the Phoenix Convention Center is on Jefferson and Third streets. That is the oldest convention center building and is a block away from the Suns’ current arena.”

Granted all of this is extremely speculative but there is the possibility of the Phoenix owned US Airways Center becoming vacant if Phoenix and the Suns decide to build a new arena at the site of the south building of the convention center. Take it a step further and it is not outside the realm of possibility that Phoenix would attempt to lure the Arizona Coyotes to a newly renovated and vacant US Airways Center with better sight lines for hockey patrons.

Think about it. Since purchasing the team two years ago IceArizona has consistently lost money due to many factors. One of those factors has always been fan complaints about trekking out to Glendale for the games. Many in the East Valley as well as from other locations such as Tucson simply choose not to make the trip. A more centrally located arena in downtown Phoenix has a certain appeal for many.

One wonders if it appeals to Barroway. Today, 2015, the Glendale arena is 12 years old, having opened in December of 2003. In another 3 years, by 2018, the arena will be 15 years old and the Coyotes will have the available option of moving due to the opt out clause any time thereafter. One of Barroway’s imperatives is to keep the team viable over the next 3 years until some major decisions are made.

In 8 years, by 2023, the arena will be 20 years old and in need of major renovation and upgrades. In the meantime, if Barroway and the City of Phoenix worked out a deal regarding US Airways it could solve one persistent fan complaint by relocating to a more convenient and centralized location. It would certainly fulfill the owners’ mantra of “here to stay”…just not in Glendale.

© 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.

Feb 14

23

Citizens respected and valued?

Posted by Joyce Clark on February 23, 2014
Posted in City Council Actions • City issue and actions • City of Glendale • Glendale elected officials • Jobing.com arena  | Tagged With: , , , , , , , , , , , | No Comments yet, please leave one

The Glendale City Council flirted with Public Comments occurring at the beginning of their meetings. It was a pilot project. After several months council voted to move Public Comments back to the end of the meeting citing that it got in the way and delayed council’s real business which is certainly not hearing from the public.

The biggest gorilla in the Valley, Phoenix, just had its council voting on February 5, 2014 to move its Citizen Comment Session to the beginning of their meeting. The move was in response to a citizen petition which claimed citizen input was not respected or valued.

It seems ironic that Phoenix has now done what Glendale rejected. If Glendale citizens submitted a petition to move the Public Comment period to the front of the meeting again would council acquiesce as Phoenix has done? What do you think? You can weigh in by voting in my informal poll to the left of this column.

A coalition on Glendale’s city council has emerged. Look for Knaack, Martinez, Sherwood and Chavira voting as a majority. That puts Weiers, Hugh and Alvarez on the losing side of most issues. I bet Alvarez rues the day she helped Chavira to get elected as he has voted in opposition to her positions since he started in office. The biggest issue was the vote on arena management and Alvarez may never forgive him for that one.

However, this November is election time in Glendale with 3 council seats up for grabs. This newly formed, rather fragile majority may not last long. Will Chavira, et.al, work behind the scenes to defeat Alvarez and get someone who is more simpatico? It would be a good move on his part as it would get rid of a problem before he stands for reelection in 2016. All he has to do is throw his support behind Jamie Aldama, Alvarez’s opponent.

Don’t forget, Knaack and Martinez are retiring. Martinez has anointed Robert Petrone but candidate Petrone’s past financial troubles may get in his way. Knaack appears ready to endorse Bill Toops, owner of the Glendale Star. Toops will have his own problems explaining how his ownership of the local paper does not conflict with serving on council. Look for more candidates to emerge as it gets closer to the end of May when nominating petitions are due. Historically in recent times there have never been less than 2 candidates for every open seat. It will be interesting to see how this election shakes out. Stay tuned…

© 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.

Feb 14

22

Camelback Ranch

Posted by Joyce Clark on February 22, 2014
Posted in Camelback Ranch Spring Training Facility • City issue and actions • City of Glendale • Glendale finances • Jobing.com arena  | Tagged With: , , , , , , , , , | 5 Comments

On Tuesday, February 19, 2013 the city council’s afternoon workshop was devoted to an informational presentation by staff on the history of Camelback Ranch. It’s a good a time as any to review what happened and how did Glendale get into this financial sinkhole? For the record, I did support this project and voted in the affirmative.

Camelback Ranch was first discussed in the spring of 2006. Keep in mind, the national economy was booming. Glendale was earning record revenues. That was the character of the economic climate in which the decision was made to move forward. No one had a crystal ball foretelling of the Great Recession about to descend upon the country. There was no issue with the arena. Steve Ellman had just sold his interest in the Coyotes to Jerry Moyes who became the new arena manager. The city was not paying an arena management fee. It would be 2009 when Moyes declared bankruptcy and the national recession hit.

Council had commissioned an economic impact study by Economic Research Associates released in March of 2006 to determine the potential financial impacts of the proposed Camelback Ranch project. It said the potential estimated direct economic impact of the two teams would be $14.9 million a year if used only during the spring training season and $19.2 million if the facility was used year round. Part of that estimate took into account that Right Path Limited would be developing the land surrounding the actual ballpark facilities. It was against this backdrop that council moved forward with approval for the project.

It was a complicated deal. Glendale’s partners were or are: the City of Phoenix; the Arizona Sports and Tourism Authority; the Dodgers and White Sox teams; and Right Path Limited (as the developer).

Camelback Ranch is located physically within Phoenix. Glendale purchased the parcel on which the major league baseball facility (MLB) sits as well as several other parcels for commercial/retail development. Phoenix’s obligation in the deal is to pay 80% of the sales tax it received on this site for 40 years up to a maximum amount of $37 million. It was its contribution toward the development of the site. In return Glendale assumed the obligation of paying Phoenix for a specific right-of-way and land adjacent to that right-of-way. The deadline for that purchase in the amount of $3.7 million is October of this year. If Glendale reneges all terms of the Phoenix/Glendale Intergovernmental Agreement (IGA) become null and void. From 2009 until 2013 Glendale received over $200,000 from Phoenix in sales tax revenues.

Ralph Burton, principal of Right Path Limited, was to be the developer of the land adjacent to the MLB facility. At the time Glendale had a great deal of confidence in him. He had been very instrumental in Cabelas locating in the Westgate area. He had purchased a substantial amount of land along the western side of Loop 101 named “Main Street” and there were plans in the works to site the Olympic basketball training facility and headquarters there. He had taken over the airport fixed base operation (FBO) and had performed major renovations. He unfortunately partnered with Danny Herndon (of Danny’s Car Wash fame and illegal immigrant workers) and Bob Banovach to develop the Main Street project. It wasn’t long before there was in-fighting between them resulting in litigation. In the meantime the recession factored into their development plans. All plans ground to a halt and ended in bankruptcy.

The Dodgers and White Sox agreement with Glendale stipulated that they would operate and maintain the facility. Capital repairs would be Glendale’s obligation. They were required to pay $1 a year for rent. There is no management fee obligation for Glendale. Glendale is responsible for providing public safety services but the revenue it receives appears to cover those costs.

The Arizona Sports and Tourism Authority (AZSTA) pledged to cover 66.7% of the project’s costs as it has historically done with other baseball spring training facilities in Phoenix, Mesa, Peoria and Surprise. Reimbursement was originally scheduled to begin in 2017 but again, the recession destroyed that schedule. AZSTA’s revenues dwindled and the new projection for payments to Glendale is now scheduled for 2025-2026.

The debt service for construction of the project range from a high of $17 million in FY 2014-15 to a low of $9 to $11 million in subsequent years. Glendale is obligated to contribute to a Capital Repair account with annual payments of $400,000 to $800,000.

The financial obligations of Camelback Ranch and Jobing. com Arena are substantial for Glendale. The annual financial requirements of these two city owned facilities are clearly unsustainable.  Camelback Ranch requires infusions ranging from a high of $18 million (debt service and Capital Repair account) to a low of $10 million a year. Jobing.com Arena requires an annual management fee of $15 million and annual debt service of approximately $13 million. Add to those figures the $5 million a year owed to the NHL, the annual contribution to the Capital Repairs account of half a million to a million a year and another million to repay the city’s Enterprise Funds and we’re looking at a low of $28 million a year to a high of $34 million a year. Combined these two facilities require cash infusions each year from a low of $38 million to a high of $52 million. A disclaimer is in order. Since I am no longer on city council I am not privy to current financial information and obligations related to these facilities that may be considered confidential. However, the underlying concepts remain valid. Some of the cash required by these facilities may be offset by revenues they generate. We simply will not know how much offset there is for the arena until the start of the next fiscal year on July 1, 2014.

Is there any solution available? Perhaps yes. The many partners and contractual obligations associated with Camelback Ranch do not lend themselves to a sale by the city of Camelback Ranch. However, Jobing.com Arena is not in the same situation and could be sold. In doing so it removes substantial annual debt service and management fee obligations from the city. It is an option that merits consideration. Personally, I would be sad to see the city lose the arena but sometimes ya gotta do what ya gotta do.

As a side note I am discontinuing my informal polls, at least for now. It is obvious that those for or against an issue are padding the results by voting repeatedly. The results of the poll have now become meaningless.

If you would like to receive an email advising you of a new blog post, simply insert your email address in the space provided on the top right side of this column.

 

© 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.

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