Part XV: Phoenix - the battle of evermore (UPD #443ff 14-Dec agenda/lease links)

[Snarky Coyote]

So why doesn't ownership then just charge for parking and selling ADV rights and all?

Perhaps because WH is a businesman and is looking to get the best deal possible when buying something.

Perhaps it is because the NHL is insisting on selling the coyotes for more than they are worth to make back thier money

Perhaps it is because previous ownership screwed this team so hard that WH knows that it will take a few years to recover.

Perhaps its so we can sign Parise and trade for Malkin
(ok that might not be all that likely)

 

[OthmarAmmann]

I agree with RR... Eat some chips and drink a coke, I won't have satisfaction until the ink is dry and GWI has made the sign of the cross. Speaking of that, my spiced rum needs a re-fillin'. Who's got the next round? Looks like the COG is buying...

I'll have a Crown Special Reserve pls.

 

[CGG]

Mayor Scruggs here (http://www.azcentral.com/community/glendale/articles/2010/12/10/20101210glendale-mayor-phoenix-coyotes.html)

Keeping those buildings running costs money, she said. The arena could cost Glendale as much as $20 million per year to maintain, she said, on top of the city's roughly $10 million annual debt payment on the facility.

"Someone has to pay to run it, just like we have to pay to run the Civic Center," Scruggs said. "If the hockey team goes away, you and I still own an arena."

Okay. And apparently the solution is to keep paying the annual debt service, pick up the annual operating costs too, and fork out $100 million upfront just for fun. I can't believe anyone thinks this is a good idea.

 

[AllByDesign]

I'll have a Crown Special Reserve pls.

No problem... COG has got moneys to burn Hoooahh!

 

[pucka lucka]

Fishy is the word. If the parking was really worth $100M, why wouldn't Hulsizer have kept it and raised the $100M himself? Sounds like the CoG is paying a "little" bit to much for the parking. nudge nudge

You would figure the CoG would at least attempt to justify their desire to pay $100m for parking right that have such little current value. If this is the best they can do it's easy to understand why it took them so long to commit to anything.

It's so completely absurd. I am actually kind of surprised that the NHL would want to endorse this, even implicitly, when its so out in the open. The NHL's claims of not wanting to leave markets rings rather hollow when this is what's required of a small municipality. We still haven't really heard much from the NHL besides that they "fully endorse Hulsizer to apply for ownership". You would think a true endorsement would say they fully endorse Hulsizer as an owner. The next couple of weeks should entertaining.

 

[TheLegend]

Starting to read through the 150 page tome.

One note from page 4 - a carrot the NHL is dangling to CoG:

"These agreements also position Glendale to host the 2013 NHL All Star Game and related events with a potential economic impact of $10-30 million."

The NHL already owed them the one they lost from the lockout year.

If this all had been settled last year the 2011 ASG would have been in Glendale instead of Raleigh.

 

[Tom ServoMST3K]

i don't see any positives for cog besides keeping the yotes at least they get something but for yotes fans, is it worth it

 

[pucka lucka]

Beer and pills eh? I don't think you're the only one who'll be medicating themselves to stomach this deal.

Does anyone know where the COG"s obligation to fund losses stands in the face of this new proposal.

Well, it seems they are attempting to pretend they aren't covering losses by spending a cool $100m on parking rights for which they were being paid $2+ per ticket by the Coyotes. Don't forget they are now eating $17m/a on arena management. If a bunch of yokels ( us ) on an internet forum can smell this, how do they expect it to fly? If it does fly, I seriously doubt that a democracy is the best form of government.

 

[CGG]

Does someone want to explain how MH doesn't lose an absolute fortune on a year-to-year basis now that all ancillary revenues seem to have been cut off? No parking, no naming rights, advertising, etc. He's left with ticket sales and TV rights. What did those pull in in 2008-09, about $20 million? And the salary cap will be about $62 million next year?

Also, for anyone who missed it, this is trumpeted as a "no out" 30-year lease. But wait just a sec, MH has the right to buy the arena in 5 years. How much is the arena worth at that point, $10 million? Once he buys the arena, he terminates the lease with himself and moves the team to Houston.

 

[CGG]

This parking thing still troubles me.

Old Lease:
"We the COG own the land and the arena, we'll let you use it for free parking but you pay us $2.50 a ticket to cover the parking cost."

New Lease:
"Just kidding, the team owned the parking rights all along, here's $100 million as we the COG want to buy the phenomenally valuable parking rights back from you. That's only 10 million cars at $10 each. Only about 50 years worth of parking at Coyotes games. We're awesome."

 

[Faltorvo]

Wait a tick.

If this 100m is being raised by bonds at 5% then this parking purchase won't end at a 100m cost will it?

 

[OthmarAmmann]

Mayor Scruggs here (http://www.azcentral.com/community/glendale/articles/2010/12/10/20101210glendale-mayor-phoenix-coyotes.html)



Okay. And apparently the solution is to keep paying the annual debt service, pick up the annual operating costs too, and fork out $100 million upfront just for fun. I can't believe anyone thinks this is a good idea.

There's got to be something else. It's too easy to show that the city is better off by $100 mm by letting the team relocate otherwise.

 

[pucka lucka]

Does someone want to explain how MH doesn't lose an absolute fortune on a year-to-year basis now that all ancillary revenues seem to have been cut off? No parking, no naming rights, advertising, etc. He's left with ticket sales and TV rights. What did those pull in in 2008-09, about $20 million? And the salary cap will be about $62 million next year?

Also, for anyone who missed it, this is trumpeted as a "no out" 30-year lease. But wait just a sec, MH has the right to buy the arena in 5 years. How much is the arena worth at that point, $10 million? Once he buys the arena, he terminates the lease with himself and moves the team to Houston.

I think MH is somewhat of a pawn here. It looks like CoG is indirectly buying this team.

 

[htpwn]

Well, it seems they are attempting to pretend they aren't covering losses by spending a cool $100m on parking rights for which they were being paid $2+ per ticket by the Coyotes. Don't forget they are now eating $17m/a on arena management. If a bunch of yokels ( us ) on an internet forum can smell this, how do they expect it to fly? If it does fly, I seriously doubt that a democracy is the best form of government.

"Democracy is the worst form of government except all others that have been tried." -- Winston Churchill

This parking thing still troubles me.

Old Lease:
"We the COG own the land and the arena, we'll let you use it for free parking but you pay us $2.50 a ticket to cover the parking cost."

New Lease:
"Just kidding, the team owned the parking rights all along, here's $100 million as we the COG want to buy the phenomenally valuable parking rights back from you. That's only 10 million cars at $10 each. Only about 50 years worth of parking at Coyotes games. We're awesome."

Crazy stuff.

 

[Whileee]

Does someone want to explain how MH doesn't lose an absolute fortune on a year-to-year basis now that all ancillary revenues seem to have been cut off? No parking, no naming rights, advertising, etc. He's left with ticket sales and TV rights. What did those pull in in 2008-09, about $20 million? And the salary cap will be about $62 million next year?

Also, for anyone who missed it, this is trumpeted as a "no out" 30-year lease. But wait just a sec, MH has the right to buy the arena in 5 years. How much is the arena worth at that point, $10 million? Once he buys the arena, he terminates the lease with himself and moves the team to Houston.

He's getting $100 million for the parking and $85 million over the next 5 years for arena management. That should help.

This is actually very interesting. What seems to have happened is that Glendale wanted the subsidies to be paid by Westgate businesses (who we have been told were desperate to keep the Coyotes). Westgate said "thanks but no thanks, we'll just have to take our chances without the Coyotes".

There were no owners willing to purchase the team at the NHL's price without massive subsidies. Since Glendale cannot legally directly subsidize a private business due to the gift law, they instead grossly overpay the owners for parking rights and arena management. Even they know that they are overpaying which is why they put a "Fact Sheet" together to tell their citizens that the Super Bowl came to Glendale because of the Coyotes.

It seems to me that if this passes legal muster, it essentially eviscerates the gift law. Any municipality could tell a prospective business owner "well, we can't give you incentives directly, but we'll pay if you $100 million if you let us run the parking lots". It seems pretty transparent. It will be interesting to see how the Phoenix media interprets this, and whether the Goldwater Institute takes an interest. I think this might be a tough sell on both fronts.

Still, hats off to the City of Glendale. Nobody can accuse them of not putting their money where their mouth is...

 

[RECCE]

It will be interesting to see how the Phoenix media interprets this...

I think he's on the same page as everyone else....

brahmresnik #Coyotes: Lease indicates Hulsizer gets $182M from Gdale in 1st 5 years (awfully close to a purchase price, no?)

 

[Dado]

Item 24 is a request to issue $125 mm in bonds and declare an emergency.

Good god. This is fiscal irresponsibility of the highest order, unless declaring bankruptcy is something the CoG is actually considering. And why would they do this for a rookie owner but not for an experienced owner like Reinsdorf?

Unbelievable. Thank god these clowns aren't representing me...

 

[CGG]

Good god. This is fiscal irresponsibility of the highest order, unless declaring bankruptcy is something the CoG is actually considering. And why would they do this for a rookie owner but not for an experienced owner like Reinsdorf?
Unbelievable. Thank god these clowns aren't representing me...

Answer: The CFD was a pipedream. Couldn't make it fly. Therefore, just hand over a briefcase full of money. If Jerry was still around I'm sure they would give him the same deal.

 

[Faltorvo]

Good god. This is fiscal irresponsibility of the highest order, unless declaring bankruptcy is something the CoG is actually considering. And why would they do this for a rookie owner but not for an experienced owner like Reinsdorf?

Unbelievable. Thank god these clowns aren't representing me...

I find it very interesting that they are actually able to label this an emergency.

Kinda shows how supposed democratic checks and balances don't mean sht when corrupt politicians and lawyers get involved.

Good on ya folks of Glendale, your getting what ya deserve.

 

[AllByDesign]

Answer: The CFD was a pipedream. Couldn't make it fly. Therefore, just hand over a briefcase full of money. If Jerry was still around I'm sure they would give him the same deal.

A briefcase would be too non-descript... More like a canvas sack with a large dollar sign on it.

 

[OthmarAmmann]

Is the CoG still on the hook for the $25 mm for this season?

 

[ATHF]

It would almost make more sense for the COG to say that they were buying the team themselves and having Hulsizer manage the arena for 17 mil a year rather than them just handing over the money like he was their pimp.

I mean, that's essentially what's happening here. The COG is buying the team and paying Hulsizer to run the parking lots. Wonder how he'll fit in one of those red valet coats?

 

[Dado]

And apparently the solution is to keep paying the annual debt service, pick up the annual operating costs too, and fork out $100 million upfront just for fun. I can't believe anyone thinks this is a good idea.

This just reeks. CoG is fronting him the money, which means he can't afford to buy the team on his own. If he cant afford to buy the team, he sure as **** can't afford to absorb the $20-$40M in annual losses.

It should be a huge warning flag that even a deal as ludicrous as this couldn't get a proven pro owner to bite.

 

[CGG]

Anyone care to try to explain how COG can justify its new $100 million purchase of parking rights on land they already own? Throw out some dollars and predictions. How does the math work? Don't they have to prove that they aren't paying a disproportionately absurd amount in any financial transaction to not run afoul of the gift clause?

Anyone care to explain how this isn't utterly embarassing for the league when the parking rights for an NHL team ($100 million) are apparently worth more than the actual NHL team ($70 million)?

 

[GoJetsGo55]

This parking thing still troubles me.

Old Lease:
"We the COG own the land and the arena, we'll let you use it for free parking but you pay us $2.50 a ticket to cover the parking cost."

New Lease:
"Just kidding, the team owned the parking rights all along, here's $100 million as we the COG want to buy the phenomenally valuable parking rights back from you. That's only 10 million cars at $10 each. Only about 50 years worth of parking at Coyotes games. We're awesome."

I literally LOL'd