Phoenix XXI: When will then be now?

[Gump Hasek]

I tend to agree that while the ideal is to have supply and demand at exactly the right point to maximize profit, what we end up with is varying demand for different games, plus the individual vs STH price levels. I do think that most operations will look at price before anything else when they want to hit a certain profit level (thanks to things like their self-imposed league tax).

That would be 100% true if we weren't discussing the upper echelon, the revenue sharing payees. An increased expense such as revenue sharing can easily be offset in markets such as Toronto and Montreal simply by raising ticket prices. Claims such as those made earlier in the thread, claims that revenue sharing payments have no impact upon ticket prices are easily countered when one considers the near insatiable demand for tickets in certain markets. It is a canard at best. Revenue sharing payments can in fact place an upward price boost upon ticket pricing in strong markets.

I get that one can eventually price oneself out of a market, but we have yet to reach that point at the top level.

 

[Killion]

Never mind.GHOST

Actually I do mind GHOST. If I was wrong about the Parking Rights not being assigned under the Interim-Lease & then reverting back to the COG upon expiration in June, then I most sincerely apologize for arguing with you that they did. Im still looking for & awaiting absolute clarification on this point, as it add's a whole new layer to this ball of confusion, and clearly puts Thors' Hammer in the hands of the NHL if indeed the COG was negligent enough to let that slip through the BK.

Yes, there is much about this idea that makes no sense to me. If the NHL now owns the parking rights in perpetuity, and if they are indeed worth $100 million ("perpetuity is a long time"), then if they sell the team and transfer those rights to Hulsizer in the sale of the Coyotes they are essentially giving him the team for $70 million, and he is turning around and selling the parking rights back to the City of Glendale for the $100 million....But if that's the case, then I suppose that a good argument could be made that the City of Glendale has already provided a "gift" by giving the parking rights to the NHL for essentially nothing.

Well how?. If this is true, then the NHL acquired the rights through the BK with the COG either unaware or negligent in not demanding the return of those rights. That we are just now discussing this critical point seems to mock all past postings on the subject, as it puts a completely new & revelatory complexion on things. What if the deal falls apart?. Can you imagine?. The NHL owns the rights to the lots around an arena that could wind up home to an AHL franchise; PBR, events & concerts, charging the Arena Management firm for their use?. What a total panic Whileee. Its just too much. Why, the Evil Genuis of it all is just..

A terminal multiple of 18x based on the 5.4% discount rate results in a valuation of $101 million (18x is rather high however, in practice it tends to be lower). Using a discount rate of 6.5% as indicated in the OM however results in a value of only $80 million with a terminal multiple of 15x. These values of course still result in funding requirements in the interim.

Of course. What the....?

Does anyone know whether the lease has finally been signed and whether the bonds are actually going on sale? As I recall, there were still some uncertainties in the bond offering related to the interest rate, among other things.

Isnt today the Big Day?. Bonds go on sale, wrapped up by Friday?.

 

[AllByDesign]

Actually I do mind GHOST. If I was wrong about the Parking Rights not being assigned under the Interim-Lease & then reverting back to the COG upon expiration in June, then I most sincerely apologize for arguing with you that they did. Im still looking for & awaiting absolute clarification on this point,

Whether it be through the MUDA, or AMULA, we are talking about "rights" not land ownership. The city still owns the land, so the land value cannot be associated with a re-sale value. From what I can gather from the wording is that the parking "rights" are associated with the group that has the title of "arena manager".

AJ had a good point with putting a value on these rights... Since the COG has packaged the rights as part of the lease/arena management bundle, you can put an appropraite monetary value by what had been agreed upon previously. This could be a point of contention for GWI

To get to the bolded part, it would appear that the parking rights, if no deal happens, would be reserved for whomever becomes the arena manager.

 

[Killion]

To get to the bolded part, it would appear that the parking rights, if no deal happens, would be reserved for whomever becomes the arena manager.

Well how could that be if the NHL owns the rights, acquired through the BK, for either 30yrs or in perpetuity?. Whoever takes over should a deal not close with Hulsizer would clearly be confronted with the obstacle of Glendale's intransigence in not re-acquiring those rights. Sure they own the land, but they dont own the rights to do anything with it. My brains gonna explode.

 

[Fugu]

I know I missed this earlier, if stated by you or anyone else here.

Is the NHL the current owner of the rights to these parking areas? Is that by virtue of the old lease with Moyes, assumed by the NHL, which I understood had been canceled by Moyes that past summer. Court had extended it for one year, iirc.

Can someone back track and fill in the steps on the parking rights? Please.

The parking rights were held by the team pursuant to the MUDA (mixed-use development agreement) and the parking agreements among the related parties (specifically, the "arena operator" or "arena developer" - i forget which - and the team).

The AMULA had nothing really to do with it.

When the NHL acquired the team, they made a number of decisions about which contracts they wanted to undertake. Along with all of the operational-type contracts and the employee/player contracts, and the NHL contracts, they acquired a number of those development contracts. One of them was that temporary agreement whcih contained the $25M in escrow monies supplied by Ellman long ago (for obvious reasons). Another one was the contract which provided parking rights in favour of the team (for equally obvious reasons).

So the NHL has something that is of higher value than "just" the team.

So, yes, here we are.

Either the Coyotes have no value and the NHL is selling the parking rights to MH, NHL team for free, who then sells these back to Glendale, or the NHL is stupid and they could be selling the team for $140m + expenses + $100m for parking rights.


Has anyone solved this mystery?

 

[Fugu]

To get to the bolded part, it would appear that the parking rights, if no deal happens, would be reserved for whomever becomes the arena manager.

Why?

Did Moyes not terminate his agreement with Glendale? (COG reserves rights on damages.)

Did the NHL not only extend the old Moyes lease for one year, with his approval?

 

[AllByDesign]

The NHL's rights to parking revenues were obtained as being the Arena Managers. They would only have value to the NHL as long as they are the arena managers. Once the Arena Management deal is transfered to a different operator the subsequent rights would be transfered to that party.

 

[Whileee]

Well how?. If this is true, then the NHL acquired the rights through the BK with the COG either unaware or negligent in not demanding the return of those rights. That we are just now discussing this critical point seems to mock all past postings on the subject, as it puts a completely new & revelatory complexion on things. What if the deal falls apart?. Can you imagine?. The NHL owns the rights to the lots around an arena that could wind up home to an AHL franchise; PBR, events & concerts, charging the Arena Management firm for their use?. What a total panic Whileee. Its just too much...Total Evil Genuis...

Isnt today the Big Day?. Bonds go on sale, wrapped up by Friday?.

Hey Killion, just to be clear, I am not sure whether the situation is as you've summarized above. I was just extending the logic and inferences of GSC's assertions, which were that as of today the parking rights for the City Parking Area are currently owned in perpetuity by an entity other than the City of Glendale. Presumably, that is the NHL, since they own the team and are current the lease holders. In order for Hulsizer to be able to monetize those rights, they must be transfered to him by the NHL. Following that logic the NHL acquired these perpetual parking rights along with the Coyotes in the bankruptcy auction for $140 million. The other startling implication is that once the NHL's agreement with the City of Glendale terminates, the parking rights do not revert back to the landowners so that they can renegotiate them with a new tenant.

This doesn't sound plausible to me, but what do I know?...

 

[AllByDesign]

Why?

Did Moyes not terminate his agreement with Glendale? (COG reserves rights on damages.)

Did the NHL not only extend the old Moyes lease for one year, with his approval?

Yes... and any benefits of those prior agreements are passed on to the NHL. The COG has assigned the benefits of the Parking Rights to the Arena Managers. It is the Arena managers choice on how they deal with these rights. The proposal for MH, as the Arena Manager is for him to sell these rights to the City.

At the end of June, when the Lease/Arena management agreement between the NHL and the COG terminates, the NHL will no longer be in posession of the parking rights. The rights would then be reserved for the next arena manager.

Edit : I think what is getting caught is the term of "perpetuity". The Parking rights were designated as the property of the Arena Manager without any time limitations. You also need to be the Arena Manager to benefit from these rights. If I am wrong with this interpretation, I would like a further clarification on the MUDA.

 

[Whileee]

The NHL's rights to parking revenues were obtained as being the Arena Managers. They would only have value to the NHL as long as they are the arena managers. Once the Arena Management deal is transfered to a different operator the subsequent rights would be transfered to that party.

Why? The current lease agreement is between the City of Glendale and the NHL, and the new agreement will be between the City of Glendale and Hulsizer. So unless there is an explicit agreement during the sale of the Coyotes to Hulsizer whereby the current Arena Managers (NHL) assign to him the parking rights in perpetuity, why is it assumed that he will own them? As the property owners and lessors, presumably the City of Glendale has the wherewithal to negotiate a new lease agreement as they see fit.

Put another way, if the City of Glendale has to buy these perpetual rights back, when did they sell them in the first place, and to whom?

 

[Killion]

Why? Did Moyes not terminate his agreement with Glendale? (COG reserves rights on damages.) Did the NHL not only extend the old Moyes lease for one year, with his approval?

That has been my contention all along and the assumption I and many others have made. The NHL simply signed an interim lease based on Moyes' existent agreement, the Parking Rights included until the interim lease expires. The suggestion that, no, their is in fact a separate agreement with respect to Parking Rights acquired by the NHL out of the BK that is tangible & quite real for the full term of the original 30yr lease (or in perpetuity) I find quite astounding. Surely this mystery can be cleared up here people. Rather crucial & critical to understanding the complexities & ramifications, motivations & possibilities yes?...

 

[Whileee]

By the way, as we rapidly tumble towards the end of another thread, here are some suggestions for future thread titles, drawn from the latest discussion points...

"Perpetually yours (or mine)"
"In perpetuity"

 

[AllByDesign]

Why? The current lease agreement is between the City of Glendale and the NHL, and the new agreement will be between the City of Glendale and Hulsizer. So unless there is an explicit agreement during the sale of the Coyotes to Hulsizer whereby the current Arena Managers (NHL) assign to him the parking rights in perpetuity, why is it assumed that he will own them? As the property owners and lessors, presumably the City of Glendale has the wherewithal to negotiate a new lease agreement as they see fit.

My interpretation is that the rights to the parking(and when I say parking I mean revenues, not the actual land) are the sole benefit of the Arena Manager. By terminating your Arena Management agreement you relinquish those rights. The MUDA assigns those rights to whomever is the Arena Manager, thus it being like a torch being passed.

Put another way, if the City of Glendale has to buy these perpetual rights back, when did they sell them in the first place, and to whom

We all know why the COG HAS to purchase these rights. I believe the assertion that they are buying them "Back" is incorrect. The rights associated with parking revenue has never been in the posession of the city. It has always been a benefit of the Arena Manager. The revenues have never really been exploited, mind you, but that is a different point all together.

 

[Killion]

.
"Perpetually yours (or mine)"
"In perpetuity"

I think were' all showing our age here Whileee. The thread titles sound like songs that didnt make the cut onto albums from the Moody Blues (When will Then Be Now or In Search of the Lost Chord?. Hmmm?) and now Yes (Pepetually Yours?, nah, Perpetual Change, lets go with that)... Were' all just a bunch of Doddering Old Coots' in need of some Yoots' round here with a fresh perspective!.

 

[LadyStanley]

Title suggestion: "Yours, Mine, and Ours" (nod to Ball/Fonda http://www.imdb.com/title/tt0063829/)

 

[jamwires]

I'm so tired of this. It's up there with the Black Eyed Peas Superbowl performance.

 

[mouser]

So, yes, here we are.

Either the Coyotes have no value and the NHL is selling the parking rights to MH, NHL team for free, who then sells these back to Glendale, or the NHL is stupid and they could be selling the team for $140m + expenses + $100m for parking rights.


Has anyone solved this mystery?

The NHL didn't "purchase" or assume the remaining years of the original 30 year AMULA. The new owner [MH] would be doing so.

The parking rights only have that monetization value over a long term AMULA.

 

[Whileee]

My interpretation is that the rights to the parking(and when I say parking I mean revenues, not the actual land) are the sole benefit of the Arena Manager. By terminating your Arena Management agreement you relinquish those rights. The MUDA assigns those rights to whomever is the Arena Manager, thus it being like a torch being passed.

We all know why the COG HAS to purchase these rights. I believe the assertion that they are buying them "Back" is incorrect. The rights associated with parking revenue has never been in the posession of the city. It has always been a benefit of the Arena Manager. The revenues have never really been exploited, mind you, but that is a different point all together.

Really? Having used city property and paid $180 million to build the arena and the parking lots, why has the City of Glendale ever been obligated to assign the rights to parking revenue to the Arena Manager? It seems more logical to conclude that during negotiations they agreed to assign the parking rights to the Arena Manager. Then the question is whether they assigned those rights to the original Arena Manager "in perpetuity", which would mean that those rights extended beyond the duration of the actual lease. That would seem to be an extraordinary concession on behalf of the City of Glendale, since it would be more reasonable to assign the parking revenue rights for as long as the Arena Manager was responsible for managing the arena. Then, when the lease ended or was terminated, the City of Glendale would negotiate a new agreement, either agreeing to transfer the parking revenue rights to the new Arena Manager, or renegotiating the assignment of those rights. I can understand the City of Glendale might be inclined to assign parking rights to the Arena Manager for the term of the lease, and even the concept of the Arena Manager monetizing those rights and selling them to another entity, or back to the City. What I find hard to believe is that at any given time the Arena Manager has those rights "in perpetuity". In that case, imagine a scenario where an Arena Manager signed a lease for 5 or 10 years instead of 30. Could the Arena Manager then monetize and sell the parking revenue rights for the next 30 or 50 years to a third party, or back to the City of Glendale? If so, how could those rights be automatically transferred from one Arena Manager to another if they have already been sold by a previous manager.

The idea of the Arena Manager having the parking rights "in perpetuity" makes no sense to me.

 

[GSC2k2*]

Glad I'm back, boys and girls??

Kidding aside, I see I have set a little bonfire or two with the substance of my posts on parking rights, etc.

To help clear things up for all, it requires a bit of a lengthy post (or a shorter post with a lot of thought put into it to make it short). Unfortunately, this doggone day job is not affording me the time other than the couple of minutes spent typing this while I'm wolfing down lunch.

I promise that I will write something up for y'all a bit later, when I'm done earning my daily bread.

 

[aj8000]

The NHL's rights to parking revenues were obtained as being the Arena Managers. They would only have value to the NHL as long as they are the arena managers. Once the Arena Management deal is transfered to a different operator the subsequent rights would be transfered to that party.

That is the problem, the agreements have a finite life under the BK, extended only until the sale. Then the COG signs a new agreement. If you (COG) want the parking rights you do not included them in the new agreement. if you do include them, you have to increase the lease of the Jobing to MH by 100 million if they are worth that much.

 

[CasualFan]

Glad I'm back, boys and girls??

Kidding aside, I see I have set a little bonfire or two with the substance of my posts on parking rights, etc.

To help clear things up for all, it requires a bit of a lengthy post (or a shorter post with a lot of thought put into it to make it short). Unfortunately, this doggone day job is not affording me the time other than the couple of minutes spent typing this while I'm wolfing down lunch.

I promise that I will write something up for y'all a bit later, when I'm done earning my daily bread.

My goodness, just when I thought this whole episode could not get any stranger look who reappears. I was endlessly amused to see that you immediately opined that CBRE misunderstood the agreements.

Here is the MUDA: http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_1159_2.pdf
I'm staying above the fray these days. Dissect as desired.

 

[AllByDesign]

Really? Having used city property and paid $180 million to build the arena and the parking lots, why has the City of Glendale ever been obligated to assign the rights to parking revenue to the Arena Manager?

I think obligated is the incorrect word. This was estabished in the initial development plan for the Sports/Entertainment district.

The idea of the Arena Manager having the parking rights "in perpetuity" makes no sense to me.

This has also perplexed the GWI. They themselves are trying to connect the dots to see if this is constitutional or not. Brighter minds, like Casual Fan, seem to believe that the parking rights scheme is constructed well enough to stand challenge.

 

[Acesolid]

Sooooooooooo, is Glendale going to sell the Bonds or what?

Since we've heard nothing, I dont think they will this week (PS: This means another 2 weeks deadline is broken).

Maybe next week? Or the one after that? Or will we be stuck in Limbo for another month or two with no information?

Is the lease with Hulsizer close to being signed? What of Goldwater?


And once again, after another "100% assured sale completed in the next few days" announcement two week ago, we're back in a complete information black hole with nothing actually happening....... Who would have guessed?

 

[AllByDesign]

Here is the MUDA: http://docs.bmcgroup.com/phoenixcoyotes/docs/azb_2-09-bk-9488_1159_2.pdf

Section 3.3 is where the meat of our discussion is.

 

[peter sullivan]

Sooooooooooo, is Glendale going to sell the Bonds or what?

yeah seriously....i couldnt sleep at all last night in anticipation of bond day....like ed grimley on christmas eve....

please end this glendale....one way or the other.