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

[Dado]

With the Coyotes losing the lucrative parking rights, do we have estimates of how much their revenues will drop?

Now there's a loaded question.

 

[Dado]

Glendale owned the lots and was getting the $2.70 or so per ticket as per the original AMULA.

So they're paying $100M for something they already own in exchange for giving up $2.70/ticket they were already getting?

What a deal!

 

[pucka lucka]

Not that I think it matters, but it does currently cost to park at all concerts, and in the premium and valet lots for Coyotes games. That revenue now goes to Arena Management. Under the new lease those revenues will go to the City.

I don't doubt that they have more value than $0, but how can they demonstrate that paying $100m for them is a balanced deal? If it's not a clear and obvious violation I doubt anyone will challenge it.

 

[TheLegend]

Interesting analysis.

Honestly speaking, can you say with a straight face that this deal is not a "gift" from the City of Glendale to Hulsizer? Just wondering.

Never claimed it wasn't creative, did I?

Anyone who thought Glendale would be able to get a lease done without something of monetary value would have been fooling themselves. All I did was explain how they came up with a way to get things done and stay within the constraints they were given.

Now.... for the purposes of discussion, let's expand on this a bit. There's the matter of Glendale hoping the NHL will leave the $25million they have in escrow alone right now. Plus, the "emergency" bond issue that's tacked on the agenda for $125 million. Of which the first $100M is no doubtedly earmarked for the parking rights.

That leaves $25M from bonds... and the $25M already in escrow.

How much does a parking garage cost to build these days?

 

[TheLegend]

So they're paying $100M for something they already own in exchange for giving up $2.70/ticket they were already getting?

What a deal!

If you read a little farther along you'd have seen I also said they still get the $2.70 per ticket. As has been stated over and over on this board they cannot change that. It would be an open invitation to GWI.

Nice try though.

 

[TheLegend]

Look i don't expect you to look at this objectively , your team is staying and if the COG takes a bath it's no skin off your nose.

But can we suspend fantasy land for just a minute.

Are we to believe after all these years , the feasibility of the parking being worth a 100 million dollar win fall had been over looked?

Come on now .

Actually, I have been looking at it objectively. I posted a while back that this has been a royal clusterflock in one way or another since the team arrived in '96 and I put the blame squarely on the NHL for it. Up until the announcement of the vote the other day I was prepared to see this go either way.

This isn't a fantasy..... the reality is there's finally a lease to be voted on. Sure..... it could get voted down... but do you really think it will?? And whether it works out in the end will no doubt generate dozens of discussion threads down the road.

 

[pucka lucka]

The part I don't quite understand here is why the NHL wants this. Ok, so they got CoG to pony up some cash, that doesn't change anything as far as market viability. Is the NHL confident they won't be in the same situation in a few years? If so what makes them confident?

 

[Finlandia WOAT]

The part I don't quite understand here is why the NHL wants this. Ok, so they got CoG to pony up some cash, that doesn't change anything as far as market viability. Is the NHL confident they won't be in the same situation in a few years? If so what makes them confident?

In b4 someone suggests that this entire fiasco was the result of Gary Bettman refusing to allow his pride to take a blow.

Because the Phoenix metropolitan area is one of the most viable sports markets that you can find?

Because relocation in general makes a league look amateur and unstable?

That losing the Phoenix market will hurt the NHL's chances in claiming the elusive National TV deal that GB seems intent on claiming?

 

[ultra runner]

The part I don't quite understand here is why the NHL wants this. Ok, so they got CoG to pony up some cash, that doesn't change anything as far as market viability. Is the NHL confident they won't be in the same situation in a few years? If so what makes them confident?

That is the $197,000,000 question...I guess if you throw enough money at it some will finally stick. I see no light at the end of the tunnel.

 

[JetFan4Ever]

I just watched 60 mins, they had a story on Jerry Jones and chronicled how he purchased the Cowboys. When he first bought the team for 150 million, Texas was in a steep recession and the team was losing a boat load of money (something like a million a week or month not sure what they said). At any rate the team is now worth north of 1.5 Billion. Jones said at the time everyone thought he was crazy. No one really knows how this will turn out for Hulsizer but I am sure it will be an interesting ride!

 

[RR]

So they're paying $100M for something they already own in exchange for giving up $2.70/ticket they were already getting?

What a deal!

For at least the second time in the last few of pages, the COG DOES NOT currently own the rights to any parking revenues under the current lease. Any current parking revenues go to Arena Management and the team.

Second, the City will continue to receive the ticket surcharge on all tickets sold to all events under the new lease.

Bottom line is under the new lease the current revenue stream from ticket surcharge continues to go to the city, and for the first time the City will collect all revenues from all parking for every event for the entire term of the lease.

 

[Veinless]

I still get the sense that CoG would be better off buying the team themselves for $170M, acquiring the parking rights that way and selling them off for the $100M.

Honestly, I'd be shocked if the NHL was not offended that the Coyotes perceived team-worth is $70M. Unsure what this says about sale values of the other 29 teams, but I cannot imagine the BoG being impressed.

EDIT: The NHL perhaps should sell the parking rights directly to CoG for the $100M, and then still try selling the Coyotes for an estimated $140M or whatever most other teams are valued at.

 

[CasualFan]

Not that I necessarily think it will happen, but what would be the repercussions if Goldwater filed an injunction?

I think it would hold up the sale for a few weeks/months, taking us past December 31st. Would the NHL stay committed to Hulsizer/COG at that point, or would they start exploring their options?

The most likely repercussion is the judge denying the motion and Goldwater paying Glendale's legal bill.

There is a significant gap between filing for injunctive relief and being awarded injunctive relief. Whomever filed such a claim would still need to demonstrate a legal right to stop the action. Standing up and saying "buying 5500 parking spaces for $100MM is really, really dumb" is not going to get it done. Glendale can rather easily demonstrate that over 23 years the 5500 spots have a revenue potential that amounts to an equitable return for their investment.

Does anyone, including Glendale City Council and Coyote fans, truly believe that potential revenue will be fully realized? No, probably not. But that is not relevant.

Glendale is entering a legally valid transfer of parking rights. It does not matter that the city paid to build the parking lots because the city gave the rights to the lots to the team. Now they are buying them back. Is that a fiscally responsible series of events? No, probably not. But again, that is not at issue. The collective wisdom of the City of Glendale cannot be litigated.

Is the most likely outcome that Glendale falls woefully short of their bond obligations because they cannot raise nearly enough revenue from the parking lots? Of course it is. But you are not going to gain an injunction because of it.

Fair. Unfair. Right. Wrong. Dumb. Wise. These terms do not apply. Legal. Illegal. That is all that matters. Glendale is not doing anything illegal. You can talk until the cows turn blue (my favorite mixed metaphor) about how stupid the city is. I'd probably agree with you. But you can forget this idea of injunction. It's not going to happen.

 

[Snarky Coyote]

Why don't you hold off gloating until MH owns the team and the lease is signed? If i had a nickel for every time i've read premature gloating on an internet forum, I'd have way too many nickels.

And if i had a nickel for every truth distorted by a bitter relocationist I could buy the coyotes. However it was not my intention to gloat.....

My point was that this will be done one way or another Tuesday, and I will be glad to see it over. That was all this thread can be closed off and perhaps maybe people would give the Yotes a year or two to rebuild. ( I believe they will be here but hell, with this thing its never over until its over )

And as for gloating - IF and When us 7 yotes fans who live in phoenix get a secure future for our team, donthca kinda think we deserve a bit of gloat?

 

[pucka lucka]

In b4 someone suggests that this entire fiasco was the result of Gary Bettman refusing to allow his pride to take a blow.

Because the Phoenix metropolitan area is one of the most viable sports markets that you can find?

Because relocation in general makes a league look amateur and unstable?

That losing the Phoenix market will hurt the NHL's chances in claiming the elusive National TV deal that GB seems intent on claiming?

I don't buy that at all. I was hoping for some insight, not the same ol' rhetoric.

Relocating makes them look amateur and unstable but that nonsense from CoG and some nobody owner doesn't?

 

[pucka lucka]

And if i had a nickel for every truth distorted by a bitter relocationist I could buy the coyotes. However it was not my intention to gloat.....

My point was that this will be done one way or another Tuesday, and I will be glad to see it over. That was all this thread can be closed off and perhaps maybe people would give the Yotes a year or two to rebuild. ( I believe they will be here but hell, with this thing its never over until its over )

And as for gloating - IF and When us 7 yotes fans who live in phoenix get a secure future for our team, donthca kinda think we deserve a bit of gloat?

You might want to save your nonsense for a different forum. Using silly divisive language like relocationist adds nothing to the discussion. There is a fan section for the Coyotes here.

 

[Rob]

Can't believe it all comes down to parking to save a franchise.

 

[CasualFan]

Can't believe it all comes down to parking to save a franchise.

Actually, handing over $100MM in public funds saved the franchise. Parking was just the ruse they used to get it there with violating the Gift Clause.

 

[berklon]

I just watched 60 mins, they had a story on Jerry Jones and chronicled how he purchased the Cowboys. When he first bought the team for 150 million, Texas was in a steep recession and the team was losing a boat load of money (something like a million a week or month not sure what they said). At any rate the team is now worth north of 1.5 Billion. Jones said at the time everyone thought he was crazy. No one really knows how this will turn out for Hulsizer but I am sure it will be an interesting ride!

One minor difference... Dallas/Texas lives and breathes football and the Cowboys even at that point were arguably considered "America's team". Jerry Jones made a gamble, but the odds were nowhere near stacked against him.

 

[TheLegend]

Actually, handing over $100MM in public funds saved the franchise. Parking was just the ruse they used to get it there with violating the Gift Clause.

Actually..... They're selling bonds to raise the $100M (plus $25M). Explain how is "public funds" involved at this pont?

Not trying to be a wisearse here... I'm genuinely curious.

 

[Whileee]

For at least the second time in the last few of pages, the COG DOES NOT currently own the rights to any parking revenues under the current lease. Any current parking revenues go to Arena Management and the team.

Second, the City will continue to receive the ticket surcharge on all tickets sold to all events under the new lease.

Bottom line is under the new lease the current revenue stream from ticket surcharge continues to go to the city, and for the first time the City will collect all revenues from all parking for every event for the entire term of the lease.

I get it. The question is "how much are those parking rights worth?" The lease says $100 million. That seems awfully high and suspiciously arbitrary. Instead of wasting space in their "Fact Sheet" to say how Glendale would not have the Super Bowl, Fiesta Bowl and BCS without the Coyotes, perhaps they should have put up some "facts" about how the $100 million was calculated. What if they decided to pay $150 million, or $200 or $300 million for the parking revenues. Would that still not be a "gift" to Hulsizer? Couldn't any business just sell rights to certain revenues for an inflated sum to avoid the gift law? I think that is at issue here; not the mechanism but the proportionality and value for money.

 

[AllByDesign]

How much does a parking garage cost to build these days?

Hehehe, I thought I knew. Let's just ask Mayor Scuggs.

 

[Whileee]

Fair. Unfair. Right. Wrong. Dumb. Wise. These terms do not apply. Legal. Illegal. That is all that matters. Glendale is not doing anything illegal. You can talk until the cows turn blue (my favorite mixed metaphor) about how stupid the city is. I'd probably agree with you. But you can forget this idea of injunction. It's not going to happen.

Well, not exactly. If this is seen and shown to be financially very "stupid" (i.e. lopsided towards the business), then it is disproportionate and would constitute a "gift". If Glendale is arranging to grossly overpay Hulsizer for the parking revenue rights etc., then the mechanism by which they have done this doesn't make the deal more "legal", does it?

 

[CasualFan]

Acutally..... They're selling bonds to raise the $100M (plus $25M). Explain how is "public money" involved at this pont?

Not trying to be a wisearse here... I'm genuinely curious.

Likewise, I have no intention of being a smartarse or instigating anything - that's why I put the smiley icon thing in there to show it was a tongue-in-cheek comment. Anyway, as for the public money, it breaks down like this:


ARENA LEASE AND MANAGEMENT AGREEMENT @ 9.9 City Commitment

9.9.1 In consideration for the conveyance to the City of the Arena Parking Rights and the other rights and the assumption by the Arena Manager of the obligations set forth in this Agreement, the City shall pay to the Arena Manager, by wire transfer of immediately available funds to an account specified in writing by the Arena Manager on or before the Agreement Effective Date, One Hundred Million and No/100 Dollars ($100,000,000).

That is the straight up transfer of $100MM in public money from the city to the team. Attempting to sell Parking Revenue Bonds to generate the $100MM doesn't make the funds any less public.

 

[Whileee]

Hehehe, I thought I knew. Let's just ask Mayor Scuggs.

She could put it in the next "Fact Sheet" that justifies the lease deal.