Phoenix LXXX: Is there another way out?

[Llama19]

If you don't leave paperwork and you don't schedule more meetings, what was the purpose of the meeting? To gauge how committed they are to $6 million? To get them to cancel the RFP?

I think it was to see what the ceiling is for the AMF. I expect that they heard that it was $6 million with a bit of "wiggle room". I also expect that when Sherwood saw Bettman looking at his watch and checking his messages, he tried to keep the NHL interested by suggesting various other "revenue streams" that they could discuss.

My guess is that the NHL is going to leave this ball in the COG's court until after the RFP bids are reviewed, hoping that the COG will not find anything suitable and come back to the NHL with something.

I think it's a vague hope. I wonder if Bettman might have left the groups with a deadline for agreeing on a lease before he left.

There you have it...the NHL/RSE probably never intended to submit a bid to manage the arena, hence the 'eleventh hour' meetings.

Delay, delay, delay...until you can delay no more.

Excuse me, is there a way out?

 

[Donwood]

So are all of the bids currently unknown to Glendale or have they been briefed in bids as they come in?

 

[wunderpanda]

Don't really see the big deal about having 1 more team in the east than in the west. It'll all even out nicely when Seattle gets a franchise anyway, which I'm confident that they will. Am I missing something?

with the realignment, the east already has 2 extra teams than the west. easy solution is switch quoyotes with the winnijets and postpone realignment

Seattle needs some planning before they can be considered. The arena plan currently requires an NBA team to move forward, they would need to rewrite the proposal for an *NHL first* scenario (would also need someone who wants to buy an NHL team for them)

 

[Killion]

Naming rights? Perhaps, I suppose.

How do you secure substantial funds from that based on historical attendance, lack of media & broadcast exposure, and you the Manager & Team Owner with an out clause? All kinds of ways to Shake n' Bake the financing on naming rights deals but these guys, Renaissance, theyve got zero leverage & no track record in the industry so who's gonna sign anything even remotely substantive with them on that building? Possibility of no anchor tenant, anemic attendance, no concerts & events, negligible serendipitous media exposure & name mentions, youd be crazy to sign a deal if your like Southwest Airlines or whomever. Impossible. Yet Sherwood seems to be living in Fairyland thinking its worth alotta dough and enough to bridge a chasm? Gimme a break. This whole thing, the whole dealeo, utter BS. Somethings goin down and it aint in Glendale.

 

[Llama19]

So are all of the bids currently unknown to Glendale or have they been briefed in bids as they come in?

Bids are 'unknown' until opened.

From V. EVALUATION PROCESS:

"After proposals have been received by the date noted above (May 24, 2013 [Note this was extended until May 31 - ed.], the City and Beacon Sports will review and identify those Managers which the City wishes to negotiate further with based on the requirements set forth in this RFP. The City and Beacon Sports may request an interview with any prospective Manager and may begin negotiations directly with one or more of the qualified entities.

After the award is made by City Council, the successful Manager and the City will promptly enter into a written agreement (the “Contractâ€) incorporating the terms of the RFP, the successful response, and other terms and conditions as may be agreed to between the parties. The City seeks to have the Manager to assume responsibilities no later than July 1, 2013."

Source: http://www.glendaleaz.com/purchasing/documents/GLENDALEARENAREQUESTFORPROPOSAL-RFP-April16-2013.pdf

Excuse me, is there a way out?

 

[CasualFan]

So... anyway, to hopefully remove any misunderstandings, misinterpretations, or generally anything else, I am posting Ms. Schurhammer's opening statement from last nite's meeting... in it's entirety. Council approval of the Tentative Budget includes adoption of City Council's financial policies ... These financial policies are included in the Tentative Budget document that was provided to Council last week...

Thanks for the summary. Interesting tidbit there (emphasis added). http://www.glendaleaz.com/Clerk/agendasandminutes/Meetings/Agendas/052813-11.pdf

Page 15 of the PDF

City Council’s Financial Policies: Capital Asset and Debt Management

@ para.2

The city will not give or loan its credit in aid of, nor make any donation, grant or payment of any public funds, by subsidy or otherwise,to any individual, association, or corporation, except where there is a clearly identified public purpose and the city either receives direct consideration substantially equal to its expenditure or provides direct assistance to those in need.​

They didn't just cap the AMF at $6MM, they wrote the Gift Clause into their financial policies.

There's more:

5. Non‐voter approved debt such as Municipal Property Corporation [MPC] bonds, lease obligations and inter‐fund loans will be used only when a dedicated ongoing revenue source is identified to pay the associated debt service obligations. This type of debt service will not exceed 10% of the 5‐year average of the General Fund’s ongoing operating revenue.
a. For FY 2014, debt service is 15% of the FY 2014 General Fund ongoing operating
revenue.​

Lease obligations debt will only be used when a dedicated ongoing revenue source is identified to pay the service obligations. Sounds like the end of Clarkonomics.

There's even more in the City Council’s Financial Policies: Fiscal Planning and Budgeting as related to balancing special revenue funds when all projected ongoing revenue sources does not exceed all ongoing expenses. This is an outright evisceration of the sports subsidies at the baseball complex and arena.

Also, a return shout out to Casual Kenneth. The most concise way to make that point is from the Follow Your Money Budget Book Schedules.

Here's how the Glendale website describes budget schedules:

"The Schedules section is the heart of the budget document as an operating and financial plan. These schedules summarize the city's financial activities in a comprehensive, financial format."​

Fund 1780 is on Page 3 of the PDF. It's a roll up of the City Sales Tax from Westgate and the Arena; the base rent (referred to as "Arena Base Team Fees"); and the per ticket surcharge (referred to as "Arena Parking Fees"); rental income; and miscellaneous revenue. FY 2011 Actual in column 2 must be an especially proud moment for the city. That's when they paid a $25MM Arena Management Fee to the NHL while the city collected a whopping $4.5MM in revenue. Columns 3 and 4 are an estimate and a budget amount, respectively. You can use the Follow Your Money revenue tool for FY12 to demonstrate that the estimated $4.75MM in "miscellaneous revenue" never actually appeared. Lastly, to study the issue comprehensively, you also have to account for the partially reimbursed expenses (EMS/Fire/Security) from Fund 1282.

 

[Killion]

Bids are 'unknown' until opened....

Keep your eye on Beacon. I dont trust them as far as I can spit.

 

[Llama19]

Also, a return shout out to Casual Kenneth. The most concise way to make that point is from the Follow Your Money Budget Book Schedules.

Fund 1780 is on Page 5 of the PDF. It's a roll up of the City Sales Tax from Westgate and the Arena; the base rent (referred to as "Arena Base Team Fees"); and the per ticket surcharge (referred to as "Arena Parking Fees"); rental income; and miscellaneous revenue. FY 2011 Actual in column 3 must be an especially proud moment for the city. That's when they paid a $25MM Arena Management Fee to the NHL while the city collected a whopping $4.5MM in revenue. Columns 3 and 4 are an estimate and a budget amount, respectively. You can use the Follow Your Money revenue tool for FY12 to demonstrate that the estimated $4.75MM in "miscellaneous revenue" never actually appeared. Lastly, to study the issue comprehensively, you also have to account for the partially reimbursed expenses (EMS/Fire/Security) from Fund 1282.

That's an excellent point.

Do you think your comment will be used by Casual Kenneth at the next meeting?

Excuse me, is there a way out?

 

[CasualFan]

Do you think your comment will be used by Casual Kenneth at the next meeting?

No, because the Follow Your Money data is evidence; not commentary. Hence, it's not my intellectual property at all. It's public record, available and usable for anyone inclined to reference it.

 

[Whileee]

Lease obligations debt will only be used when a dedicated ongoing revenue source is identified to pay the service obligations. Sounds like the end of Clarkonomics.

Great summary, CF. I suppose that someone figured out that bond rating agencies needed to get a signal that Glendale was serious about reining in its cavalier financial practices, and was now functioning as though it had a clue about fiscal prudence.

 

[Donwood]

Chances of Glendale finding a dime more for RSE are slim to none.

 

[Fugu]

There is a video on the Chris Hansen thread where he basically said that an NHL team would have to have its own ownership group and they would have to work out a lease with Hansen. Just cross Seattle off the list.

that is not new information?

Aqib, that's not what Hansen said. He said he didn't want to assume all the risk of going forward with an arena if he didn't have an assurance an NBA team would eventually come too. To me it sounded like he'd entertain partnering with an NHL ownership group if they needed/wanted to be in Seattle before an NBA team could get there. He did not want to own an NHL team however, citing that his money and investors couldn't take that on as well.

 

[enarwpg]

I have a question: why do people keep predisposing what Glendale citizens want?

People are generally drawn to voice opinions that make sense ... that being in this case, that the normal, ordinary Joe type of Glendale citizen probably prefers proper police and fire department staffing levels over enabling wealthy people to live a dream of owing a major league sports team on the taxpayers dime.

If however, you're of the opposite opinion, believing that Glendale citizens prefer paying out tens of millions of taxpayers hard earned money annually to the wealthy, then I'd have to say there's little hope of you thinking rationally......

But if you're right and the Glendale taxpayer doesn't give a rat's azz that services are being decimated in order to provide a hugely subsidized ticket price, then I'd say the city of Glendale is populated with dimwits.

 

[CasualFan]

Great summary, CF. I suppose that someone figured out that bond rating agencies needed to get a signal that Glendale was serious about reining in its cavalier financial practices, and was now functioning as though it had a clue about fiscal prudence.

Yeah, it looks like the reality of an impaired ability to bond or borrow made the administration take a more hard line position.

 

[Donwood]

CF I'd like your opinion on something I'm debating on another forum.

A Phoenix fan contends the money left in escrow will be used by the NHL to prop up the Coyotes by using it to pay for future losses.

 

[TheLegend]

If you don't leave paperwork and you don't schedule more meetings, what was the purpose of the meeting? To gauge how committed they are to $6 million? To get them to cancel the RFP?

That's definitely one possibility....

However, it isn't up to the NHL to leave paperwork for the CoG. They came in with RSE to see where all the sides are and fill in CoG on where their purchase agreement is, but after that point it's actually up to RSE to work out a lease with CoG.

I'm surprised that so many people have overlooked that little detail.

I'm not sure if I read somewhere that RSE will have meetings with the acting city manager. They did reportedly meet with him once on the same day as the mayor and council members.

But it is highly probable that RSE was told CoG will still be looking at the bids from Beacon before making any decision, and RSE decided to wait until those come in before they schedule any further talks.

 

[Whileee]

That's definitely one possibility....

However, it isn't up to the NHL to leave paperwork for the CoG. They came in with RSE to see where all the sides are and fill in CoG on where their purchase agreement is, but after that point it's actually up to RSE to work out a lease with CoG.

I'm surprised that so many people have overlooked that little detail.

I'm not sure if I read somewhere that RSE will have meetings with the acting city manager. They did reportedly meet with him once on the same day as the mayor and council members.

But it is highly probable that RSE was told CoG will still be looking at the bids from Beacon before making any decision, and RSE decided to wait until those come in before they schedule any further talks.

TL, I agree that the bids for arena management are germane, but I don't think it will change the bottom line much. The COG just has no financial wiggle room on the arena management fee. I expect that RSE now knows that, having confirmed it in face-to-face meeting with the COG, in the presence of the NHL. It is an open question as to whether they will even attempt to negotiate a lease agreement with the COG.

 

[CasualFan]

CF I'd like your opinion on something I'm debating on another forum.

A Phoenix fan contends the money left in escrow will be used by the NHL to prop up the Coyotes by using it to pay for future losses.

It's the NHLs money; they can use it however they want. I have no opinion on it.

 

[Killion]

I'm surprised that so many people have overlooked that little detail.

Say what now?... hang on here TL, if Im going in there looking to construct the foundations for a deal, Im bringing paperwork in professionally bound portfolios, Coyotes logo's, top quality vellum, guaran-eff'n-t'd to blow your mind. Video, audio, whole 9yds Baby. No messin around. Swag Bags galore with Coyotes Jerseys, Caps, autographed sticks, you name it. Im not only making an entrance, Im entrancing my audience. Hypnotised. You do not mess around with some silly meet n' greet, you go for the throat. Killer instinct. Wat da... No one ever hear of like RJR Nabisco & Golf Tournaments n' such? Coca Cola outta Atlanta? IMG & Mark McCormick? I mean, c'mon. Oh Gawd. You guys invented this stuff. Yet here we are? Totally unprofessional & unacceptable.

 

[nelina]

Say what now?... hang on here TL, if Im going in there looking to construct the foundations for a deal, Im bringing paperwork in professionally bound portfolios, Coyotes logo's, top quality vellum, guaran-eff'n-t'd to blow your mind. Video, audio, whole 9yds Baby. No messin around. Swag Bags galore with Coyotes Jerseys, Caps, autographed sticks, you name it. Im not only making an entrance, Im entrancing my audience. Hypnotised. You do not mess around with some silly meet n' greet, you go for the throat. Killer instinct. Wat da... No one ever here of like RJR Nabisco & Golf Tournaments n' such? Coca Cola outta Atlanta? U.S. of. A.? Oh Gawd. You guys invented this. Yet here we are? Totally unprofessional & unacceptable.

EXACTLY ! If I was CoG member, zero....below zero chances I gave them a dime to run the arena. Hey rockstars! Can you turn on the volume and the spots please??? !!!????!!!!

 

[RowdyMcPfeifer]

Someway somehow the Coyotes will be kept in COG limbo for another year. We will all be posting in Phoenix C: [Insert Thread Title Here] debating their imminent demise and relocation to another city.

 

[rt]

Say what now?... hang on here TL, if Im going in there looking to construct the foundations for a deal, Im bringing paperwork in professionally bound portfolios, Coyotes logo's, top quality vellum, guaran-eff'n-t'd to blow your mind. Video, audio, whole 9yds Baby. No messin around. Swag Bags galore with Coyotes Jerseys, Caps, autographed sticks, you name it. Im not only making an entrance, Im entrancing my audience. Hypnotised. You do not mess around with some silly meet n' greet, you go for the throat. Killer instinct. Wat da... No one ever hear of like RJR Nabisco & Golf Tournaments n' such? Coca Cola outta Atlanta? IMG & Mark McCormick? I mean, c'mon. Oh Gawd. You guys invented this stuff. Yet here we are? Totally unprofessional & unacceptable.

If you came in with that pitch, two twenties, a ten and four ones, this team would be your by next Tuesday.

 

[Tommy Hawk]

Bids are 'unknown' until opened.

From V. EVALUATION PROCESS:

"After proposals have been received by the date noted above (May 24, 2013 [Note this was extended until May 31 - ed.], the City and Beacon Sports will review and identify those Managers which the City wishes to negotiate further with based on the requirements set forth in this RFP. The City and Beacon Sports may request an interview with any prospective Manager and may begin negotiations directly with one or more of the qualified entities.

After the award is made by City Council, the successful Manager and the City will promptly enter into a written agreement (the “Contract”) incorporating the terms of the RFP, the successful response, and other terms and conditions as may be agreed to between the parties. The City seeks to have the Manager to assume responsibilities no later than July 1, 2013."

Source: http://www.glendaleaz.com/purchasing/documents/GLENDALEARENAREQUESTFORPROPOSAL-RFP-April16-2013.pdf

Excuse me, is there a way out?

The bids are only DUE by the 31st. Any bids received earlier can start being evaluated by Beacon, et. al. Most bids will not be received until the 31st.

CF I'd like your opinion on something I'm debating on another forum.

A Phoenix fan contends the money left in escrow will be used by the NHL to prop up the Coyotes by using it to pay for future losses.

It's the NHLs money; they can use it however they want. I have no opinion on it.

Actually, they can't. They can only use the money for the actual cash losses for the year for which it was funded. If they had actual cash losses of 18 mil for the 11-12 season the remaining 7 mil or whatever it is (not sure if they actually funded the extra 5 mil) cannot be used to fund the 12-13 season losses, IIRC from the agreement. Also, the NHL is supposed to provide an accounting and, is asked, supporting details of the accounting.

 

[epo]

Actually, they can't. They can only use the money for the actual cash losses for the year for which it was funded. If they had actual cash losses of 18 mil for the 11-12 season the remaining 7 mil or whatever it is (not sure if they actually funded the extra 5 mil) cannot be used to fund the 12-13 season losses, IIRC from the agreement. Also, the NHL is supposed to provide an accounting and, is asked, supporting details of the accounting.

Assuming they lost the enough money to take it, which is a pretty safe assumption.

 

[Nordskull]

Good morning Mr Bettman,

Lots of people think we'll know how many proposals have been filed tomorrow.

There's no garantee to that. The earlier will be monday or later, as CoG sees fit.