Phoenix CXXIII: Who Wants to Pay Our Bills?

[Tom ServoMST3K]

Someone asked how the bill got hrough this stage.

It got combined with a transportation bill, so it could go to a committee that had the right voters.

Your poli-lobbiests at work

 

[Spartachat]

I realize I'll anger a few people saying this, but the 24.4 doesn't make a lot of sense to disclose.
A.) Wouldn't the site itself have a lot to do with maintenance?
B.) While I'm sure they've paid some money to have some conceptual work done, how can you determine maintenance until the thing has been completely engineered? Especially if the maintenance cost is so much higher than comparable facilities.
C.) What's the point of disclosing it at this point with any specificity instead of just using average maintenance for facilities of this size anyway?

Just for comparison, a new elementary school in Las Vegas (just because I'm familiar with the area) costs $28,775,000 to build and equip since they all use the same plans. They're really saying that maintenance on an existing facility will cost almost as much as a brand new Clark County School District elementary school every year?

This is starting to smell a lot like PR to me. I realize that's not a new concept, but are they really trying to stay in Phoenix or are they just trying to make it seem like they're trying to stay in Phoenix?

The franchise would be worth a lot more in Seattle, Quebec City or even Portland. I suspect they want to move the team, but they have to convince the NHL that they did everything they could to keep it in Phoenix.

The NHL will likely charge them a hefty relocation fee depending on the market. Although the relocation fee was only 60 million when the thrashers moved to Winnipeg in 2011. Even with the relocation fee a company like Quebecor would pay a premium to get the team if it means moving them to Quebec.

The worst case scenario for IA is to keep the team in Glendale.

 

[WildGopher]

Can you imagine?? I don't know the length of lease they are promising. I said 30 before. The deal with Glendale in 2013 was for 15, so let's go with that. They would have to be quickly served bonds, but let's go with that.

As I recall, the Worsley bill allows bonds to be issued for "up to 40 years." I think with most arenas, 30 has been more standard, but the bill leaves the district the flexibility. Glendale's last deal for a 15-year lease was probably for that length because they'd already used the arena for 10 years at the time. And the bonds were already issued and running for (I think) 30 years.

 

[Killion]

The phrasing we saw was, "This arena will cost 24.4M/yr in maintenance, far more than any other arena."


There is no reason to think of that as anything other than "physical maintenance."

And, although it is not specified who will pay, we know enough about the financials to know that IA is not going to be able to pay that, as well as try to stay solvent paying the 170M loan for construction costs. So, the municipality must be the one paying.

... so let me see if I have this straight... whatever muni will be required to float $55M worth of Arena Bonds and pay IA an already pre-determined "Management Fee" of how many millions? $24M?... and this for an as yet non-existent facility which they said yesterday was a seriously scaled back model from those going up or in existence elsewhere.... furthermore, their borrowing their $170M contribution which surely must be contingent upon their receiving that $24M AMF so in reality, no, they are not using their own money at all as LeBlanc has repeatedly stated. They dont have it & this is the only way they can get it while building in a cushion in receiving more in AMF's than wiould be required to service the debt on the $170M loan... which I'd be willing to bet is again coming from Fortress. Its almost identical to what they pulled in Glendale only theyve upped the ante' this time around, increased their demands on whatever prospective municipality. They get a "bargain" today at $55M but.... responsible for paying $24M for lets say 15yrs as you suggest MNN?... That about right? This is crazy.... and from whence EXACTLY does the State's money come from?

 

[Killion]

One things for sure... despite yesterdays hearing whereby we hoping for clarity, Im just more confused than ever.

 

[TheLegend]

The phrasing we saw was, "This arena will cost 24.4M/yr in maintenance, far more than any other arena."


There is no reason to think of that as anything other than "physical maintenance."

And, although it is not specified who will pay, we know enough about the financials to know that IA is not going to be able to pay that, as well as try to stay solvent paying the 170M loan for construction costs. So, the municipality must be the one paying.

Think bigger than just the arena. This is a development project that can take up to 30 acres.

I saw a hotel and other facilities mentioned aside from the arena in that presentation. So it may take $24 million per year to operate everything if you include payroll, maintenance, etc.

So say hello to "LeBlanc Land"

 

[MNNumbers]

OK. Slow down the freight train.

Here is the link, from the last thread....

http://arizonasports.com/story/1024...rovide-funds-for-new-coyotes-arena-explained/

The next-to-last slide is where the 24.4M comes from.

However, in typical IA fashion, that 24.4M is claimed to be Coyotes' cost. But, there is no where it is explained what that 24.4M does. It is, quite literally, a worthless slide, placed there for one reason: to convince people how much the team has invested in the place. But, it literally says NOTHING about how that investment, or that cost, is allocated out.

Draw your own conclusions...

To show how worthless that is: The WIld are listed as having operating costs of 25M +. What exactly does that mean?

 

[GuelphStormer]

OK. Slow down the freight train.

Here is the link, from the last thread....

http://arizonasports.com/story/1024...rovide-funds-for-new-coyotes-arena-explained/

The next-to-last slide is where the 24.4M comes from.

However, in typical IA fashion, that 24.4M is claimed to be Coyotes' cost. But, there is no where it is explained what that 24.4M does. It is, quite literally, a worthless slide, placed there for one reason: to convince people how much the team has invested in the place. But, it literally says NOTHING about how that investment, or that cost, is allocated out.

Draw your own conclusions...

To show how worthless that is: The WIld are listed as having operating costs of 25M +. What exactly does that mean?

im struck by the creativity of the pitch, claiming on slide 3 to have invented a whole new way to finance arenas. congratulations to them.

but the slides do seem to address one unknown ... where the coyotes money is eventually coming from ... slide 5: "Over 85% of the arena funding would be generated on site from the team and shared new tax revenues" ... hmmmm, where have we heard that before? hardly seems like the new innovative way to fund arenas they claim on slide 3.

 

[Ciao]

im struck by the creativity of the pitch, claiming on slide 3 to have invented a whole new way to finance arenas. congratulations to them.

but the slides do seem to address one unknown ... where the coyotes money is eventually coming from ... slide 5: "Over 85% of the arena funding would be generated on site from the team and shared new tax revenues" ... hmmmm, where have we heard that before? hardly seems like the new innovative way to fund arenas they claim on slide 3.

They are relentless. Perhaps relentlessly stupid, but they do get full marks for effort.

I am amazed that the Arizona legislature has entertained this at all, but nothing should surprise us.

This is the land of the unexpected.

That is why this is all so entertaining.

 

[The Feckless Puck]

I saw a hotel and other facilities mentioned aside from the arena in that presentation. So it may take $24 million per year to operate everything if you include payroll, maintenance, etc.

Then they'd have said the entire commercial development would require $24.4 million to maintain, not just the arena.

Let's face it. LeBlanc and company put that figure out there because they're going to try their Glendale strategy again - disguise the subsidy as a management/maintenance fee, act as the arena managers, and voila! Operating capital. All we have to do is wait and see which East Valley city's managers have been living under a rock for the past five years.

 

[GuelphStormer]

Slide 8 above seems to suggest that Nashville has no arena occupancy costs at all and in fact makes a couple of millions dollars a year. Im not sure what that means.

---------

Im also confused by slide 7 above. It seems to suggest that of the $14.2M in newly generated arena-based taxes, that the State will receive only $7.8M of it. Who gets the other $6.4M?


It's unfortunate none of these figures anywhere are referenced for source.

 

[gravyleaves]

It's unfortunate none of these figures anywhere are referenced for source.

I think I know what "source" these figures were pulled from... and it's a dark one.

 

[Tom ServoMST3K]

I think I know what "source" these figures were pulled from... and it's a dark one.

CL Hocking?

 

[Roadrage]

I think I know what "source" these figures were pulled from... and it's a dark one.

I'm going with "What is arse?" Alex.

 

[blues10]

So...... the Coyotes new arena will be the 2nd smallest building in the league and the newest building in the league but will have the 2nd highest maintenance costs. Something does not add up here.

Are they buying toilets from dollarama that have to be replaced between periods? New ice plant each season the way the Cardinals replace their field turf?

 

[MNNumbers]

Then they'd have said the entire commercial development would require $24.4 million to maintain, not just the arena.

Let's face it. LeBlanc and company put that figure out there because they're going to try their Glendale strategy again - disguise the subsidy as a management/maintenance fee, act as the arena managers, and voila! Operating capital. All we have to do is wait and see which East Valley city's managers have been living under a rock for the past five years.

To be honest, I don't know what these figures are supposed to mean.

But I agree with TFP that IA will use them to get their subsidy.

 

[TheLegend]

Then they'd have said the entire commercial development would require $24.4 million to maintain, not just the arena.

Let's face it. LeBlanc and company put that figure out there because they're going to try their Glendale strategy again - disguise the subsidy as a management/maintenance fee, act as the arena managers, and voila! Operating capital. All we have to do is wait and see which East Valley city's managers have been living under a rock for the past five years.

I was speculating....

It's hard to say what they're getting for their $24.4 million. Doesn't make sense to me either. But as you pointed out.... we've been down that road.

 

[powerstuck]

Any intelligent guess as to why the cost is limited to $395M instead of rounding it up to $400M ?

I mean we've heard Coyotes talk about $170M before and I guess them and state putting in even numbers is okay, but then they go and say $55M from host city. Is there something that makes that $55M figure prohibiting a city for being higher ?

Also, I know its way too early to talk about this...but who pays for any overages and who saves if there is economy on final numbers ?

 

[blues10]

Any intelligent guess as to why the cost is limited to $395M instead of rounding it up to $400M ?

I mean we've heard Coyotes talk about $170M before and I guess them and state putting in even numbers is okay, but then they go and say $55M from host city. Is there something that makes that $55M figure prohibiting a city for being higher ?

Also, I know its way too early to talk about this...but who pays for any overages and who saves if there is economy on final numbers ?

I believe that it was Zeits that claimed IA would pay for any cost over runs or change orders.

 

[varano]

... so let me see if I have this straight... whatever muni will be required to float $55M worth of Arena Bonds and pay IA an already pre-determined "Management Fee" of how many millions? $24M?... and this for an as yet non-existent facility which they said yesterday was a seriously scaled back model from those going up or in existence elsewhere.... furthermore, their borrowing their $170M contribution which surely must be contingent upon their receiving that $24M AMF so in reality, no, they are not using their own money at all as LeBlanc has repeatedly stated. They dont have it & this is the only way they can get it while building in a cushion in receiving more in AMF's than wiould be required to service the debt on the $170M loan... which I'd be willing to bet is again coming from Fortress. Its almost identical to what they pulled in Glendale only theyve upped the ante' this time around, increased their demands on whatever prospective municipality. They get a "bargain" today at $55M but.... responsible for paying $24M for lets say 15yrs as you suggest MNN?... That about right? This is crazy.... and from whence EXACTLY does the State's money come from?

Ever heard of robbing peter to pay paul?

At the end of the day if it fails and the club moves, I'm sure the coyotes would just make whoever the next purchaser of the coyotes is cover all of the debts as well.

 

[varano]

Slide 8 above seems to suggest that Nashville has no arena occupancy costs at all and in fact makes a couple of millions dollars a year. Im not sure what that means.

---------

Im also confused by slide 7 above. It seems to suggest that of the $14.2M in newly generated arena-based taxes, that the State will receive only $7.8M of it. Who gets the other $6.4M?


It's unfortunate none of these figures anywhere are referenced for source.

Dont the Islanders have a similar situation in Barclays where they're paid 50 million to play there?

 

[Fugu]

Any intelligent guess as to why the cost is limited to $395M instead of rounding it up to $400M ?

I mean we've heard Coyotes talk about $170M before and I guess them and state putting in even numbers is okay, but then they go and say $55M from host city. Is there something that makes that $55M figure prohibiting a city for being higher ?

Also, I know its way too early to talk about this...but who pays for any overages and who saves if there is economy on final numbers ?

It's the old real estate trick, price in the high 9s versus rounding up to the next highest number. It does work though, proving that people really are strange.

 

[Glacial]

It's the old real estate trick, price in the high 9s versus rounding up to the next highest number. It does work though, proving that people really are strange.

An arena looks like such a deal when it's priced $399,999,999.99.

 

[objectiveposter]

The only reason they were able to extract 15 million a year from Glendale is because the arena was already built and Glendale had no leverage. Out of desperation they agreed to the 15 million subsidy. There is no chance in hell a city is going to agree to put up 55 million and also pay anywhere close to a 24 million annual subsidy. IA knows this. They arent going to waste time and money and continue to eat losses in Glendale knowing that no city will ever agree to build them an arena and pay an arena management fee. I dont believe they are implying that they want an arena management fee. That is not something you can hide. If it was a part of their proposal they would have mentioned it.
In any other market the IA propsal would be reasonable when you compare it to other recent arena projects (Edmonton, Milwaukee, Sacramento) It just doesnt make sense in Arizona since it would ultimately lead to 3 tax payer funded arenas for 2 teams.

 

[powerstuck]

Think bigger than just the arena. This is a development project that can take up to 30 acres.

I saw a hotel and other facilities mentioned aside from the arena in that presentation. So it may take $24 million per year to operate everything if you include payroll, maintenance, etc.

So say hello to "LeBlanc Land"

I don't buy it.

What does Wild owns in Minnesota that brings their cost to $25M. Heck what any of other teams owns beside their arena to justify their costs ???

Or did Leblanc and cie just compare apples with oranges ?