Mar 13

19

Rumor of the Day (One)

Posted by Joyce Clark on March 19, 2013
Posted in Blogs • City of Glendale • Jobing.com arena | Tagged With: City of Glendale, Craig Tindall, Horatio Skeete, jobing.com arena, Phoenix Coyotes, resignations | 2 Comments

Interim City Manager
Horatio Skeete

Several sources have related that Interim City Manager Horatio Skeete is resigning. No news on who will take his place while City Council continues search for permanent City Manager. House cleaning by a majority of this council continues.

With resignation of City Attorney Craig Tindall and now possibly Interim City Manager Horatio Skeete it appears Glendale will be adrift for awhile. This is occurring as the council prepares to take up budget discussions for Fiscal Year 2013-14. The two persons most knowledgeable about crafting a lease management agreement for Jobing.com Arena and keeping the Coyotes in Glendale are now or soon will be gone.

Mar 13

18

Saving grace

Posted by Joyce Clark on March 18, 2013
Posted in Blogs • City of Glendale • Glendale finances | Tagged With: budget, City of Glendale, finances | 1 Comment

In a few weeks the Glendale City Council will begin a series of workshops to craft the Fiscal Year 2013-2014 budget. The temptation will be the unexpended $17M allocated for the Coyotes lease management agreement in the FY 2012-2013 budget and what to do with it. The temptation will be spend it now. I believe that is the worst move that this council could make.

On the March 19, 2013 City Council workshop one agenda item is The Fiscal Year 2012-2013 Financial Report Update and Fiscal Year 2013-2014 Revenue Projection. The good news is that the temporary sales tax increase generated approximately $22M for Fiscal Year 2012-13. An insightful comment from the staff report states, “An analysis of spending habits in the community for these four months (Sept. to Dec. 2012) shows that the increase in the sales tax rate had no obvious impact on the spending pattern in the community.” All of those doomsday proclamations of “no one will shop in Glendale anymore” were flat out wrong. Shoppers, it seems, didn’t want to spend the extra money for gas to go further away or they simply did not want to leave their usual venues and venture outside their comfort zones.

Forget the Coyotes for a moment. The reason for the sales tax increase, ratified by the voters, remains the fact that the city spends more than it takes in. The Fiscal Year 2012-13 General Fund Budget is $155.3 million. Of that amount approximately $22 million (15%) comes from the increase in the sales tax rate that occurs each year over the next four years. What happens when the extra $22 million annual revenue from increased sales tax is gone as it sunsets in 2017? That is the question.

There is a solution that began implementation in FY 2012-13 and that is a $5 million reduction in expenditures each year from FY 2013 to FY 2017. If that course of action continues when the extra $22 million is gone in FY 2017 the city will not have to make any more draconian cuts. It will have a balanced budget whose expenditures are covered by existing revenues without having to dip into its contingency fund. The Glendale staff reports also states, ” Since the news sales tax rates are set to sunset in 2017, a long-term look at the city’s operational expenses must occur in order to plan for the eventual reduction of sales tax collections. The current financial position necessitates that the plan incorporate a phased approach and the FY 2013-14 budget will be a critical component of this plan.” In other words, get the job done and cut the city’s spending.

For the past six years during the worst of the recession, Glendale’s expenditures rose as its employee base grew and operating and maintenance costs also grew. Simply put, its expenditures have not met revenues. In the last two years, the city publicly acknowledged the problem and began laying off employees because quite simply, personnel costs represent about 70% of the General Funds’ expenses. That is the major expense and will require major cuts.

A city primarily produces one thing and one thing only – service to its residents. Yes, it produces one commodity as well, water, but that cost is borne by the people that use and pay for it. Service costs are built on two items: 1. buildings and equipment with their operating expenses and maintenance; and 2. employee wages and benefits. In the past several years, the former council purposefully began reducing personnel (wages and benefits) and non-personnel expenses (operating and maintenance). The city has reached the point where non-personnel costs have been decimated and the only way to continue to cut them further is to reduce service areas or levels meaning that further personnel reductions will be necessary.

Whether it is libraries, public safety or trash collection, they are all services offered to residents. The cost to provide services continues to outstrip the revenue the city takes in. The city must rein in the cost of services to have any hope of creating a balanced budget in FY 2017 when it loses the extra $22 million in annual revenue. The 2012 city council committed to the plan of cutting $5 million from the budget every year until 2017. To date the new council has been reluctant to follow through.

In an effort to avoid the pain of making another $5 million in cuts this coming fiscal year and each year for the next few years, this new council may consider the $17 million in this year’s budget as “found” money and spend every dime of it. Not a good idea. If they choose that course they are not solving the underlying problem of not enough revenue to cover costs. They are merely delaying the problem and compounding it. Saving the city’s money is not a foolhardy strategy but rather it is a grace to be nurtured and preserved.

The most prudent course of action is to place that $17 million in the city’s “rainy day” (unappropriated contingency) fund and to make the necessary $5 million in cuts this year. Increasing the city’s contingency fund is a signal that the bond market considers favorably and offers the city the opportunity to decrease interest rates even further on its current debt service load of $86 million (FY 2012-13). The debt service load is the annual amount paid in principle and interest on the city’s total debt.

Another reason to place the $17 million in contingency is that there may be another deal to keep the Coyotes in Glendale. Any deal will require a certain unknown amount as the annual lease manager fee. Having that money in reserve resolves the issue of where the fee is to come from.

A simplistic analogy is that you have a $1000 monthly mortgage payment but your income is only $900 a month. What do you do? I guess you could run up more debt on a credit card but that only delays and compounds your problem. The best way to face the problem is to cut your monthly expenses.

Will this council do what you would do? Will it responsibility continue to cut its expenses over the next four years or will it spend “found” money now to avoid pain of making further, necessary cuts and delay the problem only to face a bigger problem in FY 2017?

Mar 13

13

And the clock continues to tick

Posted by Joyce Clark on March 13, 2013
Posted in Blogs | Tagged With: City of Glendale, Mayor Weiers, Phoenix Coyotes | 12 Comments

Councilmember Gary Sherwood

Today is March 12, 2013, and the Coyotes ownership situation is silent…deathly so. What we know or think we know is that Mayor Weiers announced over a month ago that he had received calls expressing “interest” from mystery buyers. If there really were mystery buyers we have to assume that he passed those contacts on to the appropriate person, in this case, the Interim City Manager. We know from the public statements of Councilmember Gary Sherwood that Greg Jamison is making another run for ownership. We also know from media reports that Grant Woods is likely assisting Ice Edge in a possible bid and that Anthony LeBlanc, reputed to have broken away from the original Jamison investment group, said any new ownership deal has got to look very similar to the deal Greg Jamison was working previously. Councilmember Sherwood publicly stated that Glendale was hiring Beacon Sports Capital to negotiate for the city. Since then we have heard that Beacon is writing the RFP for the deal and that it is not expected to be completed until the end of March. It will have to go to council in executive session for approval and then will be released. That means a public RFP won’t hit the streets until April…and the clock continues to tick.

We know that Beacon Sports has a close relationship to Michael Reinsdorf and that relationship may offer insider access to the RFP for a possible Reinsdorf/Kaites bid.

We know that Bill Daley of the National Hockey League has said that if the deal cannot be completed in this round, I presume by the end of the season, the NHL will consider relocation of the team…and the clock continues to tick.

What is worrisome is the seeming lack of any sense of urgency by the seven councilmembers or upper management of the city to complete a deal before the NHL pulls the plug. The end of the season for the Coyotes, if they do not have any play-off games, is the end of April. After the RFP is issued in April it will likely stay open for 45 days. Then the council needs to bless a possible owner, the NHL has to approve the possible owner and then, only then, is the final deal crafted. The attorneys bless their hearts; will take quite some time and many billable hours to finalize this new deal. Bear in mind the city will not have the services of former City Attorney Craig Tindall. In past years he had negotiated (some say obstructed) several possible deals for the city. Without his expertise, it could take considerably longer…and the clock continues to tick.

Councilmember Sam Chavira

Something which may or may not relate to the Coyotes deal is the attendance of Senator John McCain and Grant Woods at the Saturday hockey game where they were seen chatting with Mayor Weiers. Could one of the topics of conversation have been the Coyotes deal? Following that game Mayor Weiers, accompanied by Councilmembers Sherwood and Chavira, flew to Washington, D.C. The trip appeared to have as its goal Luke Air Force Base and an effort to lobby for the F-35. However, a March 12^th Phoenix Business Journal article reports that the F-35 has never been considered for a possible sequestration cut. Now, if they were there to lobby for keeping the Glendale Airport’s tower open that would make far more sense as it is on the chopping block. But this was not declared to be part of their lobbying agenda. If nothing else it sure makes for a great photo op for newly elected officials. There are so many questions floating about. I’ll leave it to you to decide if this was the kind of politics where one hand washes the other. You must decide for yourself. Was this trip with access to the Department of Defense a means of acknowledging access to Beacon and the RFP before issuance or just an opportunity for a local mayor to have a photo op? I don’t know. This is all pure speculation of course but it’s interesting to try to figure out if and how the dots may connect.

I guess we have to assume that there is much scurrying behind the scenes and we may see that a Kaites/Reinsdorf group or a Jamison Group emerges as the front runners However, if a deal similar to the previous Jamison deal, requiring a $13M or $14M annual management fee, is offered to the city, as Anthony LeBlanc stated is needed, will this current council accept it? Will we see an offer coming forward at the moment the RFP hits the streets? And the clock continues to tick.

Mayor Weiers

We know Councilmember Alvarez has publicly stated that NO deal is a good deal. Will she reconsider a five year deal? Or does she have the clout to bring Councilmembers Ian Hugh and Sam Chavira with her and find just one more vote in rejection of any deal? If so, could it be the Mayor? We saw those same four join forces to oust the City Attorney Craig Tindall…and the clock continues to tick.

Weiers ran for election saying that any Coyotes deal must not be done on the backs of Glendale taxpayers. Is the real plan to let the time run out on putting any deal together? Only time will tell.

Mar 13

12

When can a suite be very sweet?

Posted by Joyce Clark on March 12, 2013
Posted in Blogs • City of Glendale | Tagged With: City of Glendale, Mayor Jerry Weiers, Suite | No Comments yet, please leave one

The City of Glendale owns 2 adjoining suites at Jobing.com arena and a suite at Camelback Ranch. The City Manager’s Office developed the original policy for their use in 2005 with a policy revision in 2010.

The criteria for their use, in order of importance, are listed below:

1. Conducting city business

2. Conducting City Council city business

3. Activities for youth and recognized, non-profit organizations

The City’s Marketing Department keeps records of suite use. In 2012, various city departments requested use of the Jobing.com suites 5 times during the course of that year. For the Coyotes 9 playoff games spanning April 12 – May 22, 2012, the Mayor and all City Councilmembers were invited. Only 4 councilmembers accepted. They were myself, former Vice Mayor Frate, Councilmember Martinez and Councilmember Knaack. Former Mayor Scruggs and Councilmember Alvarez did not participate. Former Councilmember Lieberman did attend playoff games on several occasions. From attendance records it was pretty obvious that a line in the sand had already been drawn among Council regarding what would become the Jamison deal to buy the team.

Many corporate interests were also invited to the playoff games and it was understood that the councilmembers would meet and greet these corporate and media representatives. Councilmembers would use this opportunity to reinforce Glendale as a great community in which to locate or relocate. All councilmembers in attendance did exactly that, although some were better at it than others.

For the majority of dates in 2012 the suites at Jobing.com were awarded to non-profit groups. It included many non-profits with a presence in and service to Glendale residents such as Big Brothers, Big Sisters, Heart for the City, Special Olympics and Crosspoint Christian Church. It is a small but significant way of recognizing their service to our community.

The Mayor and Councilmembers were not usually notified of non-profits’ use of city suites on the 26 occasions it occured in 2012 and consequently did not attend. There may have been a rare time when a councilmember may have sponsored a particular non-profit’s use of the suite and may have attended. I, personally, am not aware of any such occurrence but it could have happened.

Since January 15, 2013, a new pattern has emerged. every non-profit awarded use of the city suite/s has been joined by Mayor Weiers and a guest (usually his spouse). The suite/s have been used 12 times from Jan. 15 to Jan 28, 2013, and 10 of those uses were for Coyotes games with Mayor Weiers in attendance and used by non-profits such as the Salvation Army, St. Mary’s Food Bank, Central Christian Church and the First Southern Baptist Church. On two occasions of Mayor Weiers’ attendance, the suite/s use was requested by the city’s Economic Development Department – The Feb. 6, 2013 WHO concert and the Feb. 18, 2013 Coyotes game.

Mayor Weiers

Do his actions signal that he is committed to keeping the team in Glendale? After all, he’s attended the team’s home games – therefore, he MUST be a hockey fan. He’s said publicly that he wants to keep the team but with the caveat that it must not be on the backs of Glendale’s taxpayers. Sounds good, doesn’t it? Then why does he continue to advocate for 4 separate contracts for the arena? Surely he’s aware that there isn’t a potential buyer out there that would participate in such a scheme? In fact, Anthony LeBlanc, assumed to be in the running to buy the team, has been quoted in the media as saying that any future deal to purchase the team would have to look very similar to the deal that was on the table for Jamison.

Mayor Weiers appears to be a very committed and an eager elected official enjoying his new role. That’s extremely commendable and should be applauded. His style appears to be attendance at every Jobing.com event including Coyotes games (often seen wearing his #1 Mayor jersey) and concerts. There have been at least 12 events through the end of January, 2013. The assumption is that he takes those opportunities to thank the non-profits for their service and to pitch Glendale to future business and corporate locates.

Who is paying for his and his guest’s attendance in the City suite/s? I assume it’s the City. Several sources have said that Mayor Weiers has standing tickets to every event in Jobing.com Arena. I don’t have any information related to the Mayor’s use of the city suite at the city’s baseball venue, Camelback Ranch. I find his prolifigate use of the suite/s to be troubling. In all my years of service on City Council I know of no such standing tickets being offered or accepted by any of the Mayors or Councilmembers with whom I have served. There is certainly nothing illegal about the Mayor’s acceptance of tickets to use the city suite/s. Glendale elected officials’ gift policy mirrors that of the State’s gift clause policy.

The Mayor’s actions may be entirely altruistic and worthy of praise or he may be joining non-profits in the city suite/s for his own gain. It’s a matter of judgment and perception… yours.

PS . Have you ever heard of a “cop card?” If anyone out there knows what this refers to, please share with me.

Mar 13

8

What do these two things have in common? Part II

Posted by Joyce Clark on March 8, 2013
Posted in Blogs • Casino • City of Glendale | Tagged With: casino, City of Glendale, Councilmember Alvarez, Tohono O'odham | 3 Comments

In my previous posting I reviewed the issue of the Jehovah’s Witnesses and their wish to use Jobing.com Arena. The other contentious issue of discussion on the City Council workshop of March 5, 2013, was the Tohono O’odham (TO) casino issue. At the end of every workshop councilmembers are asked if they have any “Items of Interest” about which they would like further staff information. All councilmembers, with the exception of Councilmember Alvarez, had no follow up items.

Norma Alvarez

Councilmember Alvarez, for the umpteenth time, brought up the issue of the TO casino and questioned Glendale’s position and expenditures to fight the casino in court. She also made the astounding observation that she didn’t know why the city was fighting the casino. Really? Really? Does she live under a rock? Or do her blinders only allow her to acknowledge those issues with which she is in full agreement?

I especially appreciated her reference to the casino as a “resort.” Sounds so benign, doesn’t it? Rather than a 1.2 million square foot casino with over a 1,000 gaming machines, 50 table games, 25 poker tables and a 1,000 seat bingo hall. On the other hand, the mayor called a spade, a spade and referred to the facility as a casino-resort.

Ever since the Tohono O’Odham appeared at City Hall in 2009 to announce they were coming and building a casino (on the very same day they issued a press release about same), the topic has been a hot one in Glendale. To say that she does not know the city’s position is the height of folly. It immediately hit the media big time. The city has had its position posted on its website for years. You can go to www.glendaleaz.com/indianreservation/ to see for yourself. A majority of council has given direction to continue to oppose this development and at countless council meetings Councilmember Alvarez and those of us who oppose the casino have openly debated the issue. She knows full well why the city opposes the casino and her claim that she does not is disingenuous.

Tohono O’odham campaign literature
October, 2012

Why did she bring it forward…again? Very simple, she’s hoping to garner more favorable publicity for the Tribe in addition to hoping that a majority of council will now support the Tribe. And why shouldn’t she? After all, the Tohono O’odham generously supported her campaign for her council seat and in this past election cycle it also generously supported her anointed candidates, Ian Hugh and Sam Chavira. She has hosted the TO at her campaign events and even had a TO representative at her home for a meeting that may have violated the state’s Open Meeting Law. Is it just a matter of her definition of the” right thing to do” or does she owe them big time? You can decide for yourselves.

Another issue that may be of concern to you regarding Councilmember Alvarez’ actions is that the city is actively in litigation with the Tohono O’odham and has been since before her successful bid to become a councilmember. From listening to others who have been involved in litigation they have related that they are instructed to talk to no one about their case, especially their legal adversary. As elected officials representing the city in active litigation we have all been cautioned in that manner. Yet, Alvarez persists in meeting with representatives of the Tribe and has tried to raise their positive visibility in Glendale. Do the rules that the rest of council follows not apply to her? Or is it a case of when she has hears something she doesn’t agree with or like, she feigns ignorance? Again, you decide.

I’ll reserve a future blog for further discussion of the issues surrounding the casino. Who knows, it may even refresh Councilmember Alvarez’ memory.

Mar 13

7

Twistin’ and Turnin’

Posted by Joyce Clark on March 7, 2013
Posted in City of Glendale • Glendale elected officials | Tagged With: Cardinals, City of Glendale, elected officials of Glendale, Global Spectrum, Rojo Management, youth sports fields | 1 Comment

Note: I know I promised to relate the Council’s discussion of the casino next in Part II of What do these two things have in common? but this is such a timely issue and is now being reported widely I decided to post it before the casino issue.

On March 5, Paul Giblin of the Arizona Republic reported that, “the Arizona Cardinals training camp would provide economic impact of $15.3 million, Glendale says. More business at Westgate City Center, Tanger Outlet mall.”

OK then. Joe Ferguson of the arizonadailysun.com on March 5, 2013, reported, “The training camp is estimated to inject roughly $2.3 million into the Flagstaff economy annually, according to a study performed by the Arizona Rural Policy Institute at NAU — $1.6 million directly and $700,000 indirectly.

But those impacts, which are calculated according to a standardized economic model, might not be as great in practice. When the Cardinals went to Prescott in 2005 because of a virus outbreak at NAU, taxable tourist-related sales in Flagstaff showed no drop from 2004, nor were sales in 2006 much higher when the Cardinals returned.”

That’s quite a discrepancy between the $15.3 million Glendale says could be realized and the $2.3 million Flagstaff actually does realize. Who is right? I don’t think anyone has a blinking clue but let’s take another look at the figures presented by Glendale City staffers to the councilmembers at their workshop meeting of March 5, 2013. Staffers said Applied Economics was retained to perform the study on economic impacts to Glendale if the training camp is located here.

Westgate

It reminds me of a City Council Meeting that occurred on November 27, 2001. At that meeting council received information from the Arena Mixed-Use Development Agreement. Steve Ellman contractually agreed to this schedule for development of Westgate:

Deadline for Completion Cumulative Min. SF of Qualified Use Space

6 mos. after substantial

completion of arena 800,000

30 mos. after substantial

completion of arena 900,000

42 mos. after substantial

completion of arena 1,100,000

54 mos. after substantial

completion of arena 1,300,000

66 mos. after substantial

completion of arena 1,450,000

78 mos. after substantial

completion of arena (by 2010) 1,600,000

Or this presented at the same council meeting, which was projected to produce these revenue figures for the city:

Tax Report Year Qualified Tax Revenues Min. SF Qualified Use Space

1 $2,921,034 800,000

2 $3,008,665 800,000

3 $3,464,057 900,000

4 $4,298,237 1,100,000

5 $5,157,442 1,300,000

6 $5,859,860 1,450,000

7 $6,583,350 1,600,000

It all looks so rosy, doesn’t it? Projections offered down to the dollar. Except it never materialized. Steve Ellman never met any of these development projections. In fact, if I remember correctly, today there is only about 600,000 SF of use space developed in Westgate.

Let this be a lesson. Projections and estimates can be anything and should not be relied upon as gospel. You know the old saying, “Fool me once, shame on you. Fool me twice, shame on me.”

The city is saying there “could be an economic impact of $15.3 million in 2013.” For whom? The region…the state? It then goes on to say, “total direct revenue for the City of Glendale is $509,000; including fan spending, hotels and utilities.” I thought part of the reason the Cardinals’ training camp is moving to the Valley is to accommodate the existing Valley fan base and to grow it. Hotel nights won’t be a big factor if most of the fans are living in the Valley. Joe Ferguson of the arizonadailysun.com, in the same article cited earlier in this post, reports, “In addition, local merchants report that many of the Cardinals fans are day-trippers from the Valley who pack picnic lunches and spend relatively little in Flagstaff.”

City staffers on March 5, 2013, provided council with a Youth Sports Complex Fee Comparison:

Global Spectrum Rojo Management

Management Fees $216,000.00 $285,000.00

Utility Costs (Water & Electric) 106,000.00 40,889.25

Total Cost 322,000.00 325,889.25

Revenue to City 50% 20% (after $150K)

Net Cost $322,000.00 $325,889.25

There are lots of questions about this staff presentation that were not asked by councilmembers. Without context it’s like comparing apples to oranges. Global Spectrum’s contract calls for managing and renting out the sports fields all year long for $216,000. We must assume that Rojo’s contract would call for the same yet their management fee is $69,000 higher. Why? Do they need more people to do the same job that Global does? Do they pay higher salaries to their personnel than Global does? What is their rationale for a higher management fee?

There are many youth sports leagues that rely upon the use of and rent these fields all year long – from soccer to football leagues. There is a major discrepancy between both contracts relative to utility costs. The $40K figure that Rojo cites, by assumption, does not seem to reflect the fields’ usage all year long. Is it their intent to only reflect utility costs incurred during training camp? Or was it a low-ball figure designed to make Rojo’s bid more attractive? I don’t know but these are questions that should have been asked. Rojo, by the way, is a Bidwell subsidiary.

Another question not asked is, what was the revenue generated by Global Spectrum last fiscal year? The city receives 50% of it from Global. Should we not know what that figure is? Rojo is proposing revenue share of only 20% and that is after the first $150,000 is generated. I am sure staff in preparation for this presentation should have been able to supply an estimate of revenue it expected to receive under the Rojo contract. Council should have asked about revenue projections or staff should have provided this information to council.

On the face of it when comparing these two costs for operating the youth sports fields there is only a $3,889.25 difference. (I always love it when they offer costs down to the penny. How can they be so accurate on the smaller items and often miss the big picture entirely?) Is the presentation designed to make you say, well there’s such a small difference between the two, why shouldn’t we enter into a contract with Rojo and reap the rewards of having the Cardinals’ training camp?

But until the questions I posed are answered, I’m not buying it and neither should you.

Mar 13

4

Glendale in exclusive club

Posted by Joyce Clark on March 4, 2013
Posted in Blogs • City of Glendale | Tagged With: City of Glendale, Islanders, Nassau Colesium, Newark, NJ Devils, Phoenix Coyotes | 3 Comments

Prudential Center
Courtesy Business Insider/Adam Fusfeld

Glendale is not the only city to deal with financial woes related to hosting a hockey team. Newark, NJ and the NJ Devils have been at it for years. The Prudential Center opened in 2007 and is the home of the Devils. The Associated Press reported on February 26, 2013 that Newark and the Devils had finally reached resolution through the use of an arbiter, “Last year an arbitrator ruled the city owed the Devils $2.7 million a year in parking revenue plus other considerations that totaled more than $15 million. That was roughly what the Devils owed the team in back rent, fees and other expenses. The team hadn’t paid rent since 2007 while the parking dispute dragged on.” The acrimony was so bad that “Mayor Cory Booker called Devils chairman Jeff Vanderbeek a “Grade-A huckster” and accused him of reneging on promises made to the city.”

Nassau Colesium

Another case in point comes from Newsday Mobile in a March 2, 2013, article entitled, Nassau says Islanders/SMG owe millions in unpaid rent, utilities, fees by Randi F. Marshall. It states, “The New York Islanders and Nassau Coliseum’s management company, SMG, owe Nassau County as much as $3.8 million in unpaid rent, utilities and other expenses for the Coliseum dating back to at least 2011, records show.” Revenues received by the Islanders have declined since 2010. In 2012, Islanders owner Charles Wang announced that the team will move to the new Barclay’s Center in Brooklyn when the lease with Nassau County expires in 2015.

The financial tribulations of Newark and the Devils and the Islanders and Nassau County are a far cry from happenings in Glendale. It has, however, opened a window allowing the public to see exactly what financial arrangements were made in both of those cases.

Are there other cities and/or governmental entities that pay to keep their hockey teams or any sports venues? You bet there are. Information available is spotty at best because of the propriety nature of the information. But it is known that the City of Bridgestone pays the Nashville Predators $8.8 M annually. In return the team pays rent of $200,000 annually. In 2008, the Hornets received $5.3M from New Orleans. The team in turn, pays 60% of concession revenue received as annual rent. How much is that? We don’t know because it is proprietary.

So, what’s the point? It demonstrates that there are all kinds of arrangements between governmental entities and sports teams and in almost every case; it is to the benefit of the sports team. Many of the arrangements are not known because they are not available for public scrutiny. Glendale has been one of the most transparent entities to offer every element of any proposed deal to its citizens.

Feb 13

28

Steak or hamburger?

Posted by Joyce Clark on February 28, 2013
Posted in Blogs • City of Glendale | Tagged With: City of Glendale, jobing.com arena, NHL Phoenix Coyotes, Westgate | 4 Comments

Let me pose a hypothetical question. I will offer you two choices. I will give you a scrumptious steak dinner every day for one week. After that week I will give you nothing. You are on your own. Or I will give you a hamburger dinner every day forever. You will never have to worry about providing your food.

I think most of us would choose the certainty of knowing we would have an assured supply of food. Of course, there will be the few who will choose the immediate gratification of that glorious steak dinner and worry about the consequences of that choice later.

Hockey fans are wonderfully diverse, men and women, toddler to septuagenarian, white to black, American to Canadian, Catholic, Jew and Atheist. They share one common theme and that is absolute devotion to the team of their choosing. In Arizona and beyond the team of choice is the Coyotes. The nearly four year saga to find an owner who is committed to keeping the team in Glendale has been trying for all and no more so than for its fan base.

The band of hockey brothers and sisters that fought off, as one cohesive group, a referendum and an effort to repeal a sales tax increase in Glendale has now dissolved into two groups of equally committed and passionate hockey fans. The steak and hamburger analogy is an apt way of describing the camps that have arisen. One group has decided on the steak, the other on the hamburger. The steak group wants the Coyotes to say, even if it’s only short term. The hamburger group wants the assurance of permanency and wants the team for the duration. Is one group right and the other wrong? No, of course not.

I am in the hamburger group and I will tell you why after having been intimately involved as a councilmember from the time the decision was made to build the arena and the Coyotes played their very first game at Jobing.com arena until January 15, 2013, my last day as an elected official.

Jobing.com arena was built primarily, contrary to the former Mayor’s assertions, to host hockey. Of course there would be other non-hockey events held there as well. Witness the wonderful concerts that we have attended over the years. But its primary function was to serve as a hockey arena. History attests to the fact. Steve Ellman owned a hockey team and he was looking for a new home for the team. Hockey is the lynch pin of Westgate. It attracted the UofP Stadium, Cabela’s, the Renaissance Hotel and a myriad of other commercial venues.

Courtesy Christopher B.

When it seemed as if the ownership issue was about to be resolved in 2012, a resurgence of Westgate development occurred with the opening of Tanger Outlet Mall, new restaurants like Chipotle arriving and Dignity Health Hospital’s decision to locate nearby. These development actions demonstrate that once permancey for the team as an anchor tenant is achieved, further development will explode – just in time for Glendale’s hosting of the Super Bowl.

Coyotes practice session

Then there is the team itself. Imagine playing each and every game wondering if it’s your last in Arizona. As much as the General Manager, coaches and players try to ignore the implications, periodically another spate of media speculation ekes its way into their consciousness. No one can play their best under a perpetual cloud of uncertainty. This team deserves better. They deserve the assurance of knowing that this is their home not just for 5 years, only to relive today’s turmoil once again, but for the next 10-15-20 years.

Knowing that the Coyotes will remain for the long haul is so important for the team and for Westgate. I choose hamburger forever.

Feb 13

25

Another look at Beacon Sports

Posted by Joyce Clark on February 25, 2013
Posted in Blogs • City of Glendale | Tagged With: Beacon Sports, City of Glendale, Gerald Sheehan, International Facilities Group, Michael Reinsdorf, Palmdale, Phoenix Coyotes | 1 Comment

In a previous blog I shared the speculation that,upon the recommendation of Michael Reinsdorf, Managing Member and Co-Founder of the International Facilities Group, LLC (IFG), the City of Glendale hired Beacon Sports to negotiate with any and all potential buyers of the Coyotes. George Fallar, in his blog, www.nebulousverbosity.com, has fleshed out a great deal of information about Beacon Sports.

It’s time to revisit Beacon Sports. We know that the City hired them to produce a report, Survey of Professional Sports Venue Agreements – January 2011. There remains speculation about Beacon’s involvement in the Moyes bankruptcy. It appeared that IFG did not want to get involved in the bankruptcy and Michael Reinsdorf may have suggested the use of Beacon.

Why does any of this matter? Well, in 2005 suit was filed against Beacon Sports, IFG and Michael Reinsdorf by West Coast Arena Ventures, LLC in the Superior Court of California. That is fact. Since I do not know the disposition of the suit, I will use “allegedly” liberally.

Two groups, The Schwartz Group and John Cambianica Associates Architects formed West Coast Arena Ventures, LLC and hired Beacon to evaluate the project’s potential and to assist in development of the project. Allegedly, Gerald Sheehan, Managing Director of Beacon, signed a confidentially and non-compete clause with West Coast in pursuit of the development of a sports complex “in the High Desert of Southern California” (from filed complaint, page 3).

The suit then goes on to allege that Beacon presented the project to Michael Reinsdorf and IFG allegedly shared material confidential information without having Reinsdorf or IFG sign a confidentiality/non-compete agreement. In the complaint Reinsdorf is alleged to have met in person on behalf of IFG with officials from the City of Palmdale to present what was essentially West Coast’s project. It is claimed in the suit that as a result West Coast lost a business opportunity with Palmdale as a result. All of this information is readily available.

So what does this have to do with the City of Glendale? We know that Glendale hired Beacon
Sports to do a study in 2011 to provide a positive rationale for the Hulsizer deal. That deal included the City’s purchase of parking rights for $100M. We know that Glendale already has a business relationship with Jerry Reinsdorf, owner of the White Sox and one of the tenants of Camelback Ranch, a city owned facility. We know that the City hired IFG to manage construction of Jobing.com arena. We know that, allegedly, Beacon Sports, breached a previous confidentiality/non-compete agreement in 2004-05.

Who is to say that if the City has indeed hired Beacon Sports to negotiate a sale of the Coyotes, whether Beacon Sports would share information with a Reinsdorf?? If the Coyotes end up being purchased by a Reinsdorf, it should be examined very carefully. Based upon the original Reinsdorf proposal to buy the Coyotes, they wanted an “opt out” clause of 5 years. That is not enough time to build the kind of fan base needed to make the team viable. From all appearances the Coyotes would be moved. How many dedicated fans are willing to invest financially and emotionally in a team that could move?

Feb 13

20

So many questions…so few answers

Posted by Joyce Clark on February 20, 2013
Posted in City of Glendale | Tagged With: City of Glendale, Mayor Weiers, NHL | 8 Comments

As of this date the public does not know the status of the Jobing.com Arena management RFP that Council directed be used. Has it been issued? What are the specific criteria within the RFP? In addition to the issuance of an RFP Council directed a simultaneous track to pursue negotiations with potential buyers. Has there been any confirmation of a consultant hired to negotiate with any and all potential buyers of the team? What is the cost of this new consultant? Who determined the direction given to this consultant? What was the specific instruction? Where are Mayor Weiers’ “mystery buyers”? Has the City Manager talked with them? Word on the street is there really aren’t any. Do they really exist? What is the City’s time frame for resolution of the Coyotes ownership situation? Is there a time frame?

In addition to the cloudiness surrounding the status of multiple tracks for management of the arena, word has it that Mayor Weiers has not abandoned his scheme to issue four separate contracts for the management of Jobing.com arena. If true, someone should advise the Mayor that his scheme is the surest way to lose the Coyotes team. Perhaps he knows that already and it is his way of publicly professing support while killing them and Westgate off gently. So, Mayor, ‘fess up. Do you really, really want the team to stay and Westgate to thrive? If so, please explain just how this idea of four separate management contracts will attract any buyer of the team.

And where, oh where, has the NHL gone? All we heard after the deadline for the Greg Jamison deal had passed was the NHL oft repeated and perfunctory comment saying they continue to work with the City to secure a buyer for the team. All we saw was the granting of another extension by the City to the NHL to manage the arena until the end of the season. Now that the lockout is over it seems that they are consumed with realignment of the league. I suppose after that there will be another pressing issue to consider. The most pressing issue to be resolved is the sale of the Coyotes to a buyer committed to keeping the team in Glendale long-term. It’s been 3+ years. It’s way past the time for the NHL to focus itself on this issue and this issue alone. It would be refreshing to hear from Mr. Bettman that he is committed to selling the team by the end of this season. NHL, do you hear us? Don’t you think it’s time to reveal your plan for the Coyotes?

So many questions but so few answers… It’s time for the City of Glendale and the League to provide some as the real stakeholders, the team, the fans and the citizens of Glendale remain in limbo.

Enjoy my version of the team’s Wheel of Fortune. I suppose if you could interactively spin it, it’s result mirrors all of the speculation out there.

Coyotes Wheel Of Misfortune

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