February 19, 2013
I wrote yesterday that the City of Glendale would shortly be publishing a “Request For Proposals” (RFP) for an agreement to manage the city owned Jobing.com arena. Typically an RFP will be published by a city, interested parties may have signed up for notification when such requests are published. Glendale has pages on their web site (start here) to inform the public of bid opportunities. I have not been able to find an RFP for the arena management process on the web site. I also don’t subscribe to the Glendale Star where official notices are published but have been known to peruse their site.
Perhaps the reason I haven’t been able to find the RFP is that responsibility for dealing with this particular RFP has been handed over to a private contractor, Beacon Sports Capital Partners. I have a call in to them now for their input. The name of this Massachusetts based firm should ring a bell for faithful followers of the Coyotes fiasco if their memories remain intact. Why?
What’s Old Is New
Back in the day, 2009 in this case, Beacon was contracted by the City of Glendale to produce a report on the Coyotes and their economic viability in Glendale. Click here for a copy of that report. The interesting part, though, isn’t within the report. The most interesting part of Beacon’s hiring and their process of producing the eventual report is the cast of characters involved in the foreground and background. I wrote about this months ago in “Designing The Coyotes Mess 2” so I won’t rehash everything in that post, please read it or skim it for more details.
The overview of Beacon and the Coyotes is that Beacon was initially suggested to Glendale by none other than Michael Reinsdorf, the son of Jerry Reinsdorf. The New Times has suggested, in fact, that Michael’s group, International Facilities Group (IFG) was the first choice of Beasley and probably then mayor Scruggs to produce the report. You’d have to think that was just TOO close a relationship to appear ethical so Michael suggested Beacon.
Jerry Reinsdorf was a former bidder on the Coyotes, and is often rumored (along with John Kaites) to be still in the hunt for the Coyotes if they can be had for a fire sale price and moved in a short period of time. Reinsdorf does, indeed, have street cred with sports management and could even be a good candidate to own the team. Kaites is rampant in Arizona politics, having even taken a shot (complete with dirty political moves against his successful Republican opponent in the primary) at the Attorney General spot versus Janet Napolitano. The political shenanigans and hidden agendas that seem to be a normal part of the Reinsdorf/Kaites business philosophy should move them down the list of desirable partners.
Beacon, hired to be an impartial third party to examine the Coyotes with a cold eye, actually met with Reinsdorf and Kaites while in Arizona even though they had no official standing with the Coyotes at all. Kaites was then also forwarded the resulting report by then city manager Beasley “to be treated as highly confidential”.
The Beacon report was purportedly supposed to provide direction to Glendale on what comparable and, thus, reasonable agreements for arena management would look like. Yet, Glendale council members continue to maintain they have no idea what a reasonable arena management fee would be and, thus, what would constitute overpayment as a subsidy.
Suffice it to say that, on the face of it, Beacon is too connected with this mess to be an impartial overseer of the proposal process at this point in the process.
So Now What?
The idea of having a professional outside third party negotiate a resolution to the Jobing.com white elephant that is contributing to the budgetary strangling of Glendale is, in my opinion, a good one. New Council Member Sherwood has been pushing this idea since his primary campaign. In four years the city has seen two deals for the Coyotes negotiated by city employees go down in flames while the economic viability of the team continues to degrade for lack of ownership attention. Engaging a firm that has more experience with negotiating business deals as complex as any successful Coyotes deal would have to be would be a better idea.
Unfortunately, it now appears that while acting city manager Skeete has taken Sherwood’s suggestion to heart, he has decided to hand the RFP off without, unless I’m mistaken, further council direction in that regard. I don’t know what his budgetary restrictions are, we should assume Beacon isn’t working for free. Worse, he has chosen a group that has already had an active and questionable part in the failure of Glendale to dig themselves out of their arena hole.
After the Glendale January 31 deadline passed with no resolution to the Coyotes fiasco, there was an initial bluster of statements from new Glendale mayor Weiers about suitors other than Hockey Partners in the wings wanting to purchase the Coyotes. Since then, and subsequent fruitless demands by CM Norma Alvarez for Mr. Weiers to make known his list of Coyotes suitors, it’s been notably quiet.
Attempts to verify those statements by real reporters who actually know what they’re doing and bother to make the calls and do the research have come up empty. There was some news from Anthony LeBlanc, a former member of the Jamison group and before that the Hulsizer group and a key player in Ice Edge. It had even been reported that Ice Edge and Matthew Hulsizer were once again teamed up to take a run at the Coyotes in Glendale, apparently denied by the Hulsizer camp almost immediately. Uber-politico Grant Woods has thrown his hat in the ring through the press, yet remains coy about who he is “representing”. As far as representation and Woods, Inigo Montoya says it best: “You keep using that word. I do not think it means what you think it means.”
An RFP is nice, but the likelihood of it being successful in recruiting a viable arena manager is slim. With the competition for dates in the Phoenix metro area that is rich with quality venues, losing a guaranteed 40+ nights per year would effectively doom the arena, so keeping the Coyotes as the anchor tenant is important. With a failed arena, Glendale remains on the hook for payments and Westgate dies. While Tanger Outlets is packed, anyone that has actually ventured over there knows that the flow of people from Tanger to Westgate is minimal.
There are still ways for Glendale to get out of their mess in an ethical and successful fashion. All of those ways involve the Coyotes and an agreement of 12 or more years. If the city continues to fiddle while Westgate burns, they’re on a downward slope that will inevitably end in huge financial losses for the city.
The alarm bells are ringing, and Beacon is part of the problem. Get rid of them and find an Arizona firm.