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Shoalts: Glendale Mayor Scruggs wants city's $$ back
If this is true, why can't they actually ask the nhl for the bill for the actual cost of managing the arena and if it is 11 million they actually do get the 9 back (or can use it as "store credit" for a third year)?
Or is the deal that they agreed to provide the nhl 20 ( or 25) million irrespective of how much it cost to manage the arena ?who in the world would agree to something like this ?
This!
Some believe it was done in this manner to purposely circumvent the gift clause and subsidize the Coyotes losses. In doing so the COG outsmarted themselves.
I recall that any city contracts over a certain $$$$ figure were to be tendered out which this was not. The COg was playing with fire and got burnt.
First: In the draft budget for the next fiscal year (2013-14?), the Mayor would allocate no more than $11MM to manage and operate the arena, with or without the Coyotes, based on "brilliant" and "exhaustive" research that could probably be done with a Google search, and made much more reliable with a few phone calls and maybe even some e-mails or letters. I'm guessing the research stopped with Google, except for perhaps a call to a friend somewhere in the City of Phoenix administration.
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I must be missing something, the 11 million that the mayor thinks it will cost to run Jobbing.com arena is for 2013-2014 ? If I understand correctly, the mayor put substantially more money than the "proported" operational costs into an account to ensure management of the arena but have no way of getting the money back if the actual costs are significantly lower ?
I have no idea whether the 11-12 million would be sufficient to run jobbing.com, but that number is lower than what I saw was offered to a potential suitor ( I think 97 million for 5.5 years) and way less than the 25 they agreed to.
If the money is already somewhere the City can't get to, what is their leverage to try and get the nhl to pay any of it back ? If the yotes leave isn't the city on the hook for 100% of the operational costs of the arena and still has to make payments on the arena without a primary tenant and the revenues they bring in ? Does anyone know how much the city still owes on the arena ? I heard their loan payments were something like 12 million a year ( I dont know how long these payments last) so if the yotes leave they are on the hook for the 12 million in operational costs and the 12 million in loan repayments that they can try and reduce by having more concerts ?
but thanks for setting me straight, man this is complicated. Even though I learn new things about this every day, it seems that the CoG is in a really tight spot with nowhere to go. And if they try to stay put, it just gets worse.
Or is the deal that they agreed to provide the nhl 20 ( or 25) million irrespective of how much it cost to manage the arena ?
who in the world would agree to something like this ?
The whole thing with the $25M was a value that the NHL wanted to get to cover the losses for a season. The problem was the CoG just couldn't cut the NHL a cheque and had it over, as this would have resulted in the GWI stepping in. So the CoG ( I'm assuming Beasley here since he's the negotiator ) and the NHL agreed that the CoG would pay $25M to the NHL as an Arena Management Fee. This has somehow kept the GWI at bay because the CoG has said they are paying fair market value for a service.
Some simple Google searches and some phone calls would show that the CoG is way over paying for said service, but the NHL won't provide any documentation as to the true costs of running the arena.
Some simple Google searches and some phone calls would show that the CoG is way over paying for said service, but the NHL won't provide any documentation as to the true costs of running the arena.
Does the city actually know what the costs are ? From the transcript it seemed that the mayor was trying to find out and no one knew or could tell her which is why she pulled up the numbers from phoenix.
The whole thing is a huge mess, and I think no matter what happens is going to end badly for CoG. The question is only how badly.
Much of the same here really. The story is gaining some momentum. Will the NHL isssue a statement?
Here, I'll take a crack at it. Tell me if this sounds familiar.
The NHL continues to pursue opportunities that will benefit all parties involved in the Coyotes situation. While we can not respond to specific comments that may have been made by certain parties, we can assure you that all avenues continue to be pursued, and pursued with vigor. Of course, at some point we may have to consider other options. At this time we're not prepared to say what those options are, who they involve, or provide a deadline for them.
Here, I'll take a crack at it. Tell me if this sounds familiar.
The NHL continues to pursue opportunities that will benefit all parties involved in the Coyotes situation. While we can not respond to specific comments that may have been made by certain parties, we can assure you that all avenues continue to be pursued, and pursued with vigor. Of course, at some point we may have to consider other options. At this time we're not prepared to say what those options are, who they involve, or provide a deadline for them.
Thanks Gary
again we may be approaching a whole different kettle of fish and the train may not reach the station
Some simple Google searches and some phone calls would show that the CoG is way over paying for said service, but the NHL won't provide any documentation as to the true costs of running the arena.
Does the city actually know what the costs are ? From the transcript it seemed that the mayor was trying to find out and no one knew or could tell her which is why she pulled up the numbers from phoenix.
The whole thing is a huge mess, and I think no matter what happens is going to end badly for CoG. The question is only how badly.
What's sad is that most people around here saw this coming years ago. It was clear that the city could not keep the team without subsidizing it, and GWI was active from the beginning saying that if they tried to do that it would be challenged in court. They tried to find a loophole and failed.
What's funny is that the mayor is now pretty much admitting that the $25m was a subsidy, with the management fee only being about $11m. I wonder where the liability for this lies if GWI should challenge the $50m in court.
At the end of the day, the NHL did pretty well. They managed to get the losses mostly covered for the team while they waited for a buyer to materialize in another market. Bettman ain't no dummy.
Knowing what they know now, I wonder what would have happened if the COG supported Moyes and Balsillie in BK court
Just imagine how worse off the COG without the GWI.
Some strong words from the mayor:
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...they misled us and they can’t do this to our city,”
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“They have been in control of this process for the entire time.
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They have led us to this terrible point we’re at today.”
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“Maybe some places should know what they’re getting involved in when they get involved with the NHL. This is what I know based on how long we’ve been fiddling around with (the NHL).”
NHL deputy commissioner Bill Daly said in an e-mail message he “would strongly deny and reject the suggestion that anyone from the NHL misled city council or the mayor. We have at all times been completely transparent with the City of Glendale.”
Some believe it was done in this manner to purposely circumvent the gift clause and subsidize the Coyotes losses. In doing so the COG outsmarted themselves.
I recall that any city contracts over a certain $$$$ figure were to be tendered out which this was not. The COg was playing with fire and got burnt.
Usually it's any contract above 25k...we're way under 25M.
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Originally Posted by Hamilton Tigers
Man, do I feel bad for Coyotes fans and citizens of Glendale.
I...sympathise with them, but at the same time, I'm getting ready on my side for hell of a celebration.
Man, do I feel bad for Coyotes fans and citizens of Glendale.
I would think that if there are "quiet negotiations" going on between NHL and Jaimeson, if Jaimeson, who is familiar with NHL/BoG, would get turned off by this-why would he want to deal with this city to keep a team there if the city themselves are effectively flipping off the NHL?
If some of "experts" over on the AZ republic are correct... THE COG have 400M sitting in something called the "Enterprise Fund" which was used for the original 25M "payment" 2 seasons again.
They could raid the fund again couldn't they? GWI didn't take issue when they did it the first time.
If this 400M is sitting there for the COG to use........ couldn't they just pay off the arena?
assuming of course the interest rate accruing in the enterprise fund is less than the interest rate being paid out for Jobbing.com.
If some of "experts" over on the AZ republic are correct... THE COG have 400M sitting in something called the "Enterprise Fund" which was used for the original 25M "payment" 2 seasons again.
They could raid the fund again couldn't they? GWI didn't take issue when they did it the first time.
If this 400M is sitting there for the COG to use........ couldn't they just pay off the arena?
assuming of course the interest rate accruing in the enterprise fund is less than the interest rate being paid out for Jobbing.com.
But didn't GWI gob the ''arena management fee'' for the first 25M. They could react very differently for any other amount involved.
Dreger I find now, seems to lack objectivity-so it's hard to take him seriously anymore compared to say Mackenzie or a couple of the others.
IMO the reason they aren't doing the Nords meter is I wouldn't be surprised if they reprimanded behind the scenes by the NHL for doing the Jets.
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Originally Posted by cbcwpg
The Jets meter was in poor taste and I'm fairly certain Uncle Gary slapped some wrists.
While I'm sure the NHL wasn't happy about last years meter I think the lack of one this year has more to do with the fact that TSN stands 0% chance of getting a contract to carry any games if a team ends up in QC.
IMO there's an equal chance of there being a Seattle-o-meter as a QC-o-meter.
Although I'm willing to start an Ice Edge Meter, if the clowns get their hands on a team there would be more how-not-to-run-a-hockey-business threads in BoH than hours in a day! Good Times my friends, good times!
If some of "experts" over on the AZ republic are correct... THE COG have 400M sitting in something called the "Enterprise Fund" which was used for the original 25M "payment" 2 seasons again.
I could dig it up somewhere in the mass of threads regarding the Coyotes, but I'm lazy. Basically the money that the City of Glendale has is in non-liquid assets; I think the mayor explained this to a resident who asked the same question.
And I found a post that references what I was referring to here.
I believe that the NHL's $25 MM wasn't an upfront payment (hence being placed in escrow), but an "up to" $25 MM figure. The NHL would be able to use that money to defray costs accrued above and beyond the Coyote's own ability to generate revenue.
Of course, they arrived at that figure because they probably could predict how much money their operations would cover vs the total cost.
Furthermore, wasn't this the second year that $25 MM was placed in escrow by COG? Did the mayor not realize what was paid out a year earlier?
I believe that the NHL's $25 MM wasn't an upfront payment (hence being placed in escrow), but an "up to" $25 MM figure. The NHL would be able to use that money to defray costs accrued above and beyond the Coyote's own ability to generate revenue.
Of course, they arrived at that figure because they probably could predict how much money their operations would cover vs the total cost.
Furthermore, wasn't this the second year that $25 MM was placed in escrow by COG? Did the mayor not realize what was paid out a year earlier?
That's what I thought as well, but my understanding is that the GWI viewed using this money to cover operating losses as an illegal gift and intended to sue to prevent it.
So I think that the NHL actually planned to use that money to cover operating losses from the team, but they would never say so publically. If anyone asked, the money that they were getting was compensation for managing jobbing.com and not to offset operational losses.
And my understanding is that although the CoG did not like the idea of the first 25 million, they had to do it to try and get someone to assist in paying down the debt on the arena. They claim that they were told that a sale which would keep the team in glendale was imminent and that they were being asked to put up a second 25 million as a safety net that they would not really need as a new owner was " closer than ever", and that the new owner would be responsible for these costs. They claim that people told them that even if they put this money into escrow, the team would be sold before ever having to dip into these funds.
Well the team was not sold and it appears that the CoG has no way to take back that money that is in escrow and I doubt that the NHL feels any obligation to renegotiate it to 11 million, much less give it all back.
I saw a guy on the local news saying that Glendale could actually go bankrupt because of this. If they default on the arena, I suspect that in addition to their credit rating going further in the toilet, that no one in their right mind would actually want to buy jobbing.com from them because they are already so underwater and will no longer have a tenant.
If I screwed some of this up, again please feel free to correct me.
. . . wasn't this the second year that $25 MM was placed in escrow by COG? Did the mayor not realize what was paid out a year earlier?
It's beyond belief, Fugu, that she could really be that dense, but Killion, CF and I, among others, have all watched the video and somehow we all believe her. Yes, she really is that dumb.
It brings to mind the look my wife gives me when I do something incredibly stupid.
Here we go...
NHL deputy commissioner Bill Daly said in an e-mail message he “would strongly deny and reject the suggestion that anyone from the NHL misled city council or the mayor. We have at all times been completely transparent with the City of Glendale.”
Man, do I feel bad for Coyotes fans and citizens of Glendale.
For once, Daly is not being deceitful. "Transparent" would include "invisibile", which, according to Scruggs, is what the NHL has been in the past few months.
