Glendale Bids and Budgets

Observers interested in the Coyotes saga in Glendale are aware the city hired Beacon Sports Capital to deliver vetted arena management proposals to the city for consideration. Most of those same observers are now aware Beacon has come up with four candidates for managing the Glendale owned arena.

There is some confusion as to what the process is for managing these four proposals and what are the legal restraints.

Open Sesame

We submitted a public records request some time ago for copies of the proposals submitted by Beacon to the City of Glendale. We were rejected, as was the Arizona Republic if protestations are to be believed:

I’m not a lawyer, but I’m not sure that in this case Caitlin is correct about opening the proposals publicly. The city charter language regarding bids is available here. One “out” for Glendale may be:

“Requests for the construction, improvements, repair or maintenance of public works requiring bids shall be initiated by the division responsible for the project.”

The arena management proposals are none of the above and the publication requirements laid out in that section have not (to the best of my knowledge) been followed. Perhaps the simple fact that Beacon, a third party, has been hired by the city as a third party to negotiate with and vet candidates before providing those “pre-approved” packages to the city is enough to obviate the bid regulations.

Also, there’s this:

“4.12.040 Contracts for which bidding not required.
Whenever materials or services are to be procured and the aggregate cost to the city is to be such that competitive bidding is not required by law and funds have been appropriated and remain unexpended to which such procurement may properly be charged, a contract providing for such procurement, duly executed by the supplier and accompanied by such sureties as may be required by law, approved as to form by the city attorney, may be executed by the city manager on behalf of the city. (Prior code § 5-14.1)”

Legally it’s been clarified an arena management agreement is a fee for professional services agreement that isn’t subject to the bid process. It may have even been restated as such in court a few days more than a year ago. Additionally, whether the budgeted amount is or isn’t enough to satisfy whatever arena management agreement is finally reached, the funds have already been appropriated.

Since Arizona isn’t Quebec, if the AZ Republic disagrees with Glendale’s assessment, they are of course afforded the opportunity to sue the city.

Rejection Letter

We received an email from the Glendale City Clerk’s office that politely rejected our request and explained the reasoning behind that rejection. The email also promised to provide us with our requested information relative to the RFP “at the appropriate time”. We’re fine with that.

Every interaction with the Clerk’s office we’ve had over the years, by the way, has been handled in a courteous and efficient manner.

The rejection included other clarifying information regarding the current state of the bidding process with Beacon and what the next steps are.

Who’s On First?

Beacon met with Glendale staffers yesterday (06/10/2013) to brief them regarding the four initial proposals received by Beacon. I’ll help them out with some educated conjecture here, mostly because the AZ Republic is trying to “ID four firms”.

Since the AZ Rep is prone to publishing their own speculation, I’ll try to help them with their ID process with some speculation of my own.

Speculation begins here
Two of the four are Global Spectrum and AEG. I’ve detailed in the past why I’m fairly certain these two are involved, and that they would both be good options if somehow the Coyotes deal managed to fall apart.

I’ll further take a stab at guessing that the Reinsdorf connected IFG (International Facilities Group) is one of the bidders, and in fact may be the one with the upper hand in the process because of their “relationships” with Glendale over the years.
Speculation ends here

Proposal Timeline

The email goes on to state all four proposals will be considered “this week”, meaning between Monday, June 10 and Friday, June 15.

“Finalists” will be identified this week, so there will be more than one and probably fewer than four. As the week goes along, the candidates may be asked to provide further information and there will be “vetting of the maturing proposals” (note: not yet “bids”).

The city anticipates the selected finalists will be invited to make their presentations on Monday, June 17 and Tuesday, June 18 with the final “best proposals” being presented to the City Council on June 18, presumably before or during the workshop scheduled for 1:30pm on that day. This may actually be the first look the general public gets at the proposals.

The email closes with the following:

The negotiations have yet to begin.

And as we are still so early in the process, council has not been briefed on any details of the submissions at this point.

Although we understand and appreciate the desire for the public to know details, disclosure of details before negotiations commence could negatively impact Glendale’s ability to receive the best terms for the City.

As we progress further and are able to share this information, we will definitely do so.

So, there you go. Based, we assume, on the legal opinion of the Glendale City Attorney’s office, there will be no information disseminated to the general public for the next week or so, at least.

Non-Hockey Versus Hockey

One rub in the above schedule is what looks like a disparity between the schedule required for a successful bid by Renaissance Sports and Entertainment (RSE) to house the Coyotes in the city owned arena.

There is a LOT of work to be done between now and June 25, the date of the last scheduled City Council meeting before July 1. Rumors have been mounting the NHL is applying deadline pressure to various factions, although the dates and the “or else” are moving targets. Is it possible the Coyotes relocate? Of course. It is likely? My opinion remains that it is not likely based on any number of published or unpublished facts.

Misguided assumptions (that must somehow be ferrous since they increase in fervor as they approach to magnetic north) that budgetary constraints, even given a final budget approval vote, or other factors spell doom for an agreement to be reached with RSE are wrong.

In an unexpected (by me at least) move, Glendale has called a special meeting for Friday, June 14 to approve the budget. Based on that, it’s an even bet the approved “final” budget wouldn’t have a correctly budgeted amount for arena management since NONE of the agreement conditions with any party could be finalized by Friday.

It’s even possible the July 1 deadline can come and go without a completely executed agreement. Assuming the Coyotes are staying, the legal beagles have to run their billable hours up for awhile until documents are ready for signatures. I think if the NHL is satisfied the deal will get done, their deadline is flexible. We should hope the NHL and RSE agreement is close to being signature ready at this point, but we all know how that process can suddenly require a few thousand dollars more of legal effort.

It’s even possible that the kinks have already been worked out between Glendale and RSE and all (or most) necessary votes are in place. I know for a fact there was significant effort in providing realistic numbers for an arena with an NHL anchor tenant and one without based on similar arenas nationwide, and the arguments are very compelling.