November 17, 2012

Welcome back, boys and girls! Let’s jump right into our latest installment of predictions regarding the attempted defeat of the arena lease deal between Hockey Partners and the City of Glendale.

My prediction of a steady stream of articles worthy of being joyfully quoted, tweeted and facebooked all over Canada was easy to make and has come true. The latest article I read was yesterday, penned for the AZ Republic that compared the University of Phoenix “deal” versus the Hockey Partners lease agreement. I didn’t analyze it much, I did notice that the $1.1M subsidy provided to UOP by the Glendale fire department (due to losses on their negotiated contract) wasn’t mentioned. I’m sure there are more millions bouncing around unmentioned as well, I mostly mention that one because I know the reporter was at the same meeting I was where I heard that information. I assume the Glendale Star has been participating as well, although I admit to never even checking anymore. One brief ray of sunshine was a balanced article in the Phoenix Business Journal, written by perennial Ken Jones quoter Mike Sunnucks. We can only hope that trend continues.

No Talking Allowed

Lately there has been a little buzz from the usual boorish Twitterati about Mr. Jamison speaking with council members a while ago. The claim is these conversations constitute lobbying and that the council members are (forgive me) “assholes”. Oh yes, those are the usual arguments and adjectives employed by these people, quite often significantly worse.

There may or may not be more of a push down this path, but the complete lack of support for the claim in the law will MAYBE stop it in its tracks. They may continue down a similar road with some claim of open meeting law violations, but there’s a larger problem if they do so.

The problem is that the Phoenix Monarch Group had at least one meeting with council members that was not in public, the exact same thing that would apply in this case. The difference is that the people involved are on the “good guy” list for the trolls in question, so it’s not likely they will pursue it further. If it finally morphs into some sort of nuisance complaint designed to delay the execution of the already negotiated contract, that won’t be a surprise either.

Remember that, in the case of the Coyotes, simple delays are likely to cause their demise. Delaying tactics began even before Jerry Moyes ran the team down to the bankruptcy court, hand in hand with Balsillie like an over-aged Jack and Jill couple. If the Coyotes leave, it will be with a whimper, they won’t go down fighting.

I Know Nothing

Mayor Scruggs and, lately, others have come to vehemently deny knowledge of ALL “numbers” related to running the city they represent. The mayor has been at it longer, but the truth of the matter is that it is much less likely that she had “no idea” what Ed Beasley and crew were doing and what they were spending. Ms Scruggs has, without ever naming names that might be spelled B-e-a-s-l-e-y or even S-k-e-e-t-e, been throwing her staff under the proverbial bus for some time now. This baffles me, as I assume that the mayor, or any council member for that matter, could certainly read a budget or balance sheet and also demand “numbers” be provided if necessary.

It’s ludicrous to accept these claims of ignorance from elected officials, they were elected to NOT be ignorant so that their constituents could live their lives ignorant of their money being well spent by trusted officials. Yet it seems that people are slowly beginning to, selectively, accept these excuses. I say selectively because there are fall guys being laid out for the results of a recent audit while others, including the person driving the Glendale ship of state for nearly 20 years, remain unscathed. Read some articles, listen to some trolls, it’s true.

Expect this finger pointing and fiduciary denials to continue, in fact you can bet that the next council meeting (on Tuesday, Nov. 20) will be rife with same. Watch to see who is leading the charge to absolve themselves of all responsibility, it will be accompanied by a stated wish to postpone any real decisions into 2013.

We’ve already discussed the postponement technique that will become more prominent as the days go on. We have already seen it employed in the previous city council meeting with Scruggs offering her advice to push back a vote over the phone from her undisclosed location.

Deadline, Schmeadline

The final “thing” we’ll offer today is the existence or lack of a “hard” deadline for the closure of the Hockey Partners arena lease deal. Many people, including myself, see November 27 as a realistic date for a realistic deadline. This date affects many of the other delaying tactics being employed or spooled up by the opposition.

The NHL lockout has muddied the waters of the Coyotes situation quite a bit. I assume there would be a different sense of urgency if games were being played instead of having a Jobing.com ghost town. The people depending on the Coyotes for a living are being affected dramatically, there are stories all over the web about the economic impact of the Coyotes missing. It’s real, yet it’s also baffling to me that the people owning businesses that are losing TENS of thousands of dollars each time the Coyotes don’t play aren’t more vociferous in their complaints to their city government. It will be ironic if their silence costs them their livelihood permanently.

The NHL will shortly have to decide whether to renew their Jobing.com contract. I am not sure of the exact impact of them deciding NOT to renew, and it’s not from a lack of asking people a lot of questions. I haven’t even been able to find out if the NHL has subcontracted the job out. I suspect they have, and I suspect they subbed it out to likely candidate AEG.

Let’s look at one scenario here, there are many more but this one is interesting in an “I feel like puking” sort of way.

Meet The Seattle Starbucaneers

The opposition “wins” and the vote on the Hockey Partners lease agreement is bounced back to 2013. This happens because the spurious argument that the new council should vote on a long term agreement makes more sense gets enough traction to succeed. Since we predicted it in this series it has, indeed, gained favor in some camps. Yet, EVERYBODY knows the purpose of the delay would only be to stack the deck against the team. Seriously, any argument to the contrary iced over with exhortations of “transparency” or “what’s right for Glendale” or “I didn’t know what the numbers were” is obviously not the case.

I am assuming the lockout will continue past November 27. The NHL finally decides they have had enough reneging, renegotiations and renewals and they announce they are moving on. It would be naive to think that the NHL and Mr. Jamison (he wouldn’t be “Hockey Partners” after 11/27) have NOT discussed a plan B for the Coyotes. It’s logical to assume they have contingency plans fairly well constructed by now. It’s logical to assume their intended destination would be Seattle or, if Hell freezes over, Quebec City. If they don’t have these plans, they haven’t been watching this space or the happenings in Glendale closely.

If the NHL cancels their deal with Glendale, I assume their subcontract with AEG (assuming it exists) becomes void. I also assume that any event already booked into Jobing.com arena will be cancelled immediately. The $25M that Glendale owes the NHL becomes due immediately and the Coyotes load up the moving trucks. Let’s also assume that they would have to find a temporary home. I’m certain that arenas in California, maybe even Staples Center since the NHL probably has a close relationship with AEG could manage whatever games the Coyotes had to play IF the lockout is resolved this season. If it is NOT resolved, the people working for the Coyotes could simply be let go after being cherry-picked by the Jamison group and any equipment placed in storage. I assume that a temporary place for the Coyotes could be found for another year, it would be VERY unlikely to be anywhere near Arizona. Once the arena in Seattle is ready, and I’m assuming it COULD be rushed a little, it’s all done.

Plausible, right?

Reality Sets In

What does Glendale do in the time between the Coyotes packing up and a new arena manager being found through the normal request for proposal process? Would they simply continue to pay the $500,000 per month that it costs to simply keep the empty arena open? Of course, the naming rights contract and suite contracts would also be immediately voided because there is no anchor tenant in the arena.

In recent years, the sales tax revenue from the arena plus about $1M from Northern Crossings has covered the annual construction bond debt repayment. If the Coyotes are gone and the arena remains empty, the loss of revenue means the city is on the hook for the $6M to open the arena and the guesstimated $5M bond debt money. Interestingly, that total $11M for an empty arena is exactly the fee the city would pay Hockey Partners to have at LEAST 660,000 people come to Westgate for hockey and then however many other people came for the additionally guaranteed 30 events. We won’t even mention the $1.65M coming directly to Glendale from ticket surcharges assuming the horrendously bad attendance figures continue with a REAL owner and a Pacific Division Championship team. Yet somehow spending the SAME money for an EMPTY BUILDING is a SUBSIDY because it would be paid to a proven, successful arena manager?

Boggles the mind, yet that is the EXACT scorched earth scenario espoused by the naysayers in Glendale.