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Wednesday, July 3, 2013

Stupid Humans, and Other Thoughts on Last Night's Glendale City Council Meeting

Posted by on Wed, Jul 3, 2013 at 2:05 PM

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 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 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.


Comments (10) RSS

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meanie 1

if we just had more hydrogen economy in our suburban property tax solutions this would have turned out better.
Posted by meanie on July 3, 2013 at 2:27 PM · Report this
Poor, poor Goldy! Didn't get his hockey team. Waaaaah! Didn't get his arena. Waaaaaah! Does this mean there'll be no check in the mail from Chris Hansen? Waaaaah indeed!
Posted by Noicons on July 3, 2013 at 2:55 PM · Report this
fletc3her 3
Who names an arena after slang for masturbation anyway?
Posted by fletc3her on July 3, 2013 at 3:19 PM · Report this
kk in seattle 4
The proper analysis for Glendale is how much they would lose WITH the team and how much they would lose WITHOUT the team, factoring into each equation the secondary effects, such as sales tax, property tax, etc. You need to do that analysis, otherwise the City Council's decision won't make sense. (I do agree that the Seattle-Hansen deal is sweet, but Seattle is not Glendale, and our councilmembers are full-time professionals.)
Posted by kk in seattle on July 3, 2013 at 5:23 PM · Report this
Great article Goldy. It's nice to know that when the NBA and NHL return it will be on Seattle's terms, not because the city caved in to extortion.
Posted by Fussellian on July 3, 2013 at 6:19 PM · Report this
Some Old Nobodaddy Logged In 6
This is Arizona we're talking about. Jan Brewer is their governor, after all.
Posted by Some Old Nobodaddy Logged In on July 3, 2013 at 6:40 PM · Report this
Our governor is Jay Inslee, who is every last bit as stupid as Arizona's.
Posted by Noicons on July 3, 2013 at 9:23 PM · Report this
Christampa 8
@9- Yes, we all remember how you bet on the losing ticket last November. No need to rub it in your own face.
Posted by Christampa on July 4, 2013 at 4:35 AM · Report this
Frank Blethen's vodka distiller 9
@2 & @7 I see you figured out how to override the parental controls set on your browser.
Posted by Frank Blethen's vodka distiller on July 4, 2013 at 2:14 PM · Report this
cressona 10
Goldy, thanks for the diligent continuing coverage of the Coyotes saga. As much as I'd love to see the resurrection of the Seattle Metropolitans, I have a soft spot for the Coyotes. Just the whole idea of hockey in the desert. And just what plucky overachievers that team has been under Dave Tippett.

And yet, I'm not delusional. It's obvious the Glendale location is not sustainable. The city should have never built a pro-sports arena in that far-flung location. The team should have never left downtown Phoenix in 2003. They had a solid following prior to the move. (They'd have a far more lucrative following with an arena in Sodo, just because Seattle's a better market.)

Which brings me back to the other part of this saga that has so fascinated me. There's something to be said for good urban planning--for putting major cultural venues in central locations accessible by transit. There's a reason the NBA's Nets went from being a box-office bust in the Meadowlands to a box-office smash in Brooklyn. And even that remaining New Jersey team, the Devils, plays in Newark, not the exurban swamps of North Jersey. (Yes, I'm aware the Giants and Jets still play in that wasteland. Ten or so games a year on a Sunday is a different logistical decision for a sports fan.)
Posted by cressona on July 4, 2013 at 7:09 PM · Report this

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