So, a few additional thoughts and elaborations on last night's Glendale, Arizona city council meeting in which they approved an arena lease agreement that will keep the NHL's Coyotes at Jobing.com Arena for at least five more years:
In his opening remarks, soon-to-be Coyotes owner Anthony LeBlanc commented on the team's attendance prospects, quipping that during the winter months the Phoenix area becomes the third largest city in Alberta. Hah! Maybe. But then Red Deer isn't big enough to support an NHL franchise either. And that speaks to the larger problem facing the team's longterm viability in Glendale: the consistently woeful attendance at Coyotes games despite fielding a consistently competitive team. Nothing in the new lease agreement will change that. And that means Seattle could yet find itself home to the team once the five-year opt-out clause is exercised.
It's hard to exaggerate just how much money the city of Glendale is losing on Jobing.com Arena. Debt service on the city-owned arena alone amounts to $8.4 million a year, on top of the $15 million the city will pay RSE to manage it. In return, Glendale will get a piece of revenues, estimated to amount to about $8 million a year, but there are no guarantees. Glendale also owes the NHL $25 million from the previous lease agreement, which the city will now pay in $5 million annual installments. So Glendale will be shelling out over $23 million a year on the arena and the Coyotes, in exchange for maybe $8 million in revenue. All this within the context of a $168 million annual budget. Such a bargain!
By comparison, the Memorandum of Understanding between Seattle/King County and would-be Sonics owner Chris Hansen is a sweetheart deal for taxpayers. Taxpayers would put up between $125 million and $200 million (depending on whether there's an NHL team), with Hansen guaranteeing tax revenue and rent sufficient to cover the public debt service. That guarantee is backed up by all the assets of ArenaCo, including the land, the arena, and the multi-hundred-million-dollar value of the NBA franchise (worth more than the arena itself), plus a personal guarantee by Hansen and fellow billionaire Steve Ballmer. There would be zero hit to city and county general funds, and arguably negligible risk.
I had intended to use Glendale as a lesson to Bellevue in its quest to build an NBA arena should the Hansen deal collapse, but in fact the economies of two cities aren't remotely comparable. Bellevue boasts a much more diverse economy that supports two and a half times the general fund expenditures of Glendale, but with only half the population. So yeah, Bellevue could weather a fiasco like this much better than Glendale. That said, it would still be best to avoid a fiasco.
I have come away from the stream of last night's meeting with a newfound respect for the Seattle city council, who come off as goddamn statesmen compared to their counterparts in Glendale. It's little things—like actually understanding the rules that govern council meetings—that make all the difference.
Yes, we will do fine without an NHL team. But it would have been really nice to have one. And while I agree with those in both Seattle and Glendale who insist that government has more pressing priorities than millionaires on ice, people who dismiss the positive non-monetary impact of professional sports on our quality of life are people who dismiss human nature. It may be incredibly irrational (you know, just like religion), but professional sports teams weave their way into the self-identity of a region in a way that few other cultural amenities can. Stupid humans. But human nonetheless.