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Part V Phoenix Coyotes post bankruptcy UPD Reinsdorf out? IEH back in? else Winnipeg?

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Old
05-03-2010, 10:35 PM
  #76
RR
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Originally Posted by peter sullivan View Post
I think We decided that the legislation the senate was looking at didn't necessarily apply here. Although it is odd that they came out speaking against it if they were not related. There has still been no reasonable explanation Of how they plan to get around the issue of this existing Cfd legislation being specifically for infrastructure projects. Is it correct that the state must ok any municipalities decision to create a new cfd? I would assume so but please correct me if I'm wrong. If that is the case I can see that being another legality they will have to deal with. Even if the senate or whoever needs to pass judgement on the creation of cfd's likes the idea is it even within the current legislation to allow it for the use of direct payment to a private company instead of the creation of infrastructure as the law seems to have been intended for. Does anyone have any information on the wording of the cfd laws in Arizona?
You're not suggesting conspiracy here, are you? Like someone (Kaites) thought he could sneak something through by dark of night without it being noticed? Or that someone else (GWI) may have feared that was the case and was sure to publicize the matter just in case there was a nefarious motive?

As for you receiving a "reasonable explanation" on specific details about this deal, why would you? No one involved cares about you, me, or anyone else on this board.

No state approval is needed for a CFD so, yes, all of your assumptions that followed are wrong.

Chapter 4, Article 6 is what you're looking for:

http://www.azleg.state.az.us/arizonarevisedstatutes.asp?title=48

48-705 Order forming district; election is what you seek specific to forming a district:
http://www.azleg.state.az.us/FormatDocument.asp?inDoc=/ars/48/00705.htm&Title=48&DocType=ARS

The reason many posit that creation of the CFD will not be an issue if both the COG and Ellman are interested in seeing it done, is contained in the above link:

Quote:
Each owner has the number of votes or portions of votes equal to the number of acres or portions of acres rounded upward to the nearest one-fifth of an acre owned by that owner in the submitted district. In addition to holding the landowner election required by this subsection or receipt of the landowner petition pursuant to section 48-707, subsection F (no election needed if ALL landowners within the CDF sign petition supporting formation), and subject to section 48-707, subsection G (no one within the designated CDF signs supporting formation), the governing body shall submit the formation of the district to a vote of the qualified electors who reside within the boundaries of the proposed district.

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05-03-2010, 10:44 PM
  #77
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Originally Posted by RR View Post
You're not suggesting conspiracy here, are you? Like someone (Kaites) thought he could sneak something through by dark of night without it being noticed? Or that someone else (GWI) may have feared that was the case and was sure to publicize the matter just in case there was a nefarious motive?

As for you receiving a "reasonable explanation" on specific details about this deal, why would you? No one involved cares about you, me, or anyone else on this board.

No state approval is needed for a CFD so, yes, all of your assumptions that followed are wrong.

Chapter 4, Article 6 is what you're looking for:

http://www.azleg.state.az.us/arizonarevisedstatutes.asp?title=48

48-705 Order forming district; election is what you seek specific to forming a district:
http://www.azleg.state.az.us/FormatDocument.asp?inDoc=/ars/48/00705.htm&Title=48&DocType=ARS

The reason many posit that creation of the CFD will not be an issue if both the COG and Ellman are interested in seeing it done, is contained in the above link:
so by parsing this from the statute explain how the owners of such places as Biltmore Fashion Park, Desert Ridge Marketplace, Metro Center etc... can't create a CFD- charge $1 per space- sell the bonds on expected revenue for every car that parks at their shopping centers- this is the nut that's hard to crack for Westgate- revenue from just parking does not support the money mentioned in the MOU

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05-03-2010, 10:51 PM
  #78
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Originally Posted by billy blaze View Post
so by parsing this from the statute explain how the owners of such places as Biltmore Fashion Park, Desert Ridge Marketplace, Metro Center etc... can't create a CFD- charge $1 per space- sell the bonds on expected revenue for every car that parks at their shopping centers- this is the nut that's hard to crack for Westgate- revenue from just parking does not support the money mentioned in the MOU
Parsing what? Someone asked for, "any information on the wording of the cfd laws in Arizona?" I provided a link.

He also asked, "Is it correct that the state must ok any municipalities decision to create a new cfd?" I provided a link.

Sorry, no longer interested in the, "what if," and, "yeah, but" games going on around here. You all can play. I'll wait and see what the final outcome is.

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05-04-2010, 12:07 AM
  #79
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Thank you rr.

So...is there no restriction on what purpose a cfd can be created for? As long as the council of whatever town wants to create one supports it, it's all ok?

That seems hard to believe, but if that is how it is. Where did this notion that they can only support infrastructure come from I wonder?

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05-04-2010, 09:08 AM
  #80
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Originally Posted by peter sullivan View Post
Thank you rr.

So...is there no restriction on what purpose a cfd can be created for? As long as the council of whatever town wants to create one supports it, it's all ok?

That seems hard to believe, but if that is how it is. Where did this notion that they can only support infrastructure come from I wonder?
That's not correct. There is restricitons on what it can be used for.

http://www.dpfg.com/news/view_news.php?newsID=17

In the case of the coyotes it could be argued that it falls under the "enhanced public services" category I suppose.

Also I believe part of the CFD's are going to service the debt on the arena (i could be wrong on this point). Not sure if this secondary way of paying for the cost of the arena would qualify it.

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05-04-2010, 10:38 AM
  #81
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Originally Posted by peter sullivan View Post
Thank you rr.

So...is there no restriction on what purpose a cfd can be created for? As long as the council of whatever town wants to create one supports it, it's all ok?

That seems hard to believe, but if that is how it is. Where did this notion that they can only support infrastructure come from I wonder?
48-701 #12 "defines" public infrastructure:

http://www.azleg.state.az.us/FormatDocument.asp?inDoc=/ars/48/00701.htm&Title=48&DocType=ARS

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05-04-2010, 10:45 AM
  #82
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Originally Posted by RR View Post
In conjunction with this, the important provision deals with the powers of a CFD, as noted here:

http://www.azleg.state.az.us/FormatD...48&DocType=ARS

As noted in subsection 5, the powers of the CFD do not (as some mistakenly assumed) extend to construction projects, but rather to:

Quote:
5. Operate, maintain and repair public infrastructure.

6. Establish, charge and collect user fees, rates or charges for the use of any public infrastructure or service.

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05-04-2010, 11:19 AM
  #83
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hmmmm....seems like a stretch to me, but we'll see.

and it is the state who stamps its approval?

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05-04-2010, 11:42 AM
  #84
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Originally Posted by GSC2k2 View Post
In conjunction with this, the important provision deals with the powers of a CFD, as noted here:

http://www.azleg.state.az.us/FormatD...48&DocType=ARS

As noted in subsection 5, the powers of the CFD do not (as some mistakenly assumed) extend to construction projects, but rather to:
Don't forget to not only take into account the laws as written but also the court rulings around the laws. The recent AZ Supreme Court ruling further defined the usage of CFDs.

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05-04-2010, 11:46 AM
  #85
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Originally Posted by billy blaze View Post
Bettman won't put deadline on Phoenix sale........yet

http://slam.canoe.ca/Slam/Hockey/NHL.../13812611.html
He does have a bankruptcy court deadline for the lease of the arena so the NHL will have to do something.....

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05-04-2010, 11:48 AM
  #86
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Originally Posted by peter sullivan View Post
hmmmm....seems like a stretch to me, but we'll see.

and it is the state who stamps its approval?
No, it is the City.

http://www.azleg.state.az.us/FormatD...48&DocType=ARS

Quote:
Originally Posted by Wolvesfan View Post
Don't forget to not only take into account the laws as written but also the court rulings around the laws. The recent AZ Supreme Court ruling further defined the usage of CFDs.
Whihc one was that?

Quote:
Originally Posted by Wolvesfan View Post
He does have a bankruptcy court deadline for the lease of the arena so the NHL will have to do something.....
The parties can amend the terms of their sublease. Moyes would not object.

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05-04-2010, 12:18 PM
  #87
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Don't forget to not only take into account the laws as written but also the court rulings around the laws. The recent AZ Supreme Court ruling further defined the usage of CFDs.
Are you referring to the City North ruling or some other AZ Supreme Court decision? City North did not involve CFDs.

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05-04-2010, 12:31 PM
  #88
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Originally Posted by GSC2k2 View Post
but it would be the state that decides if the CFD meet the legal criteria i would assume....

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05-04-2010, 12:43 PM
  #89
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but it would be the state that decides if the CFD meet the legal criteria i would assume....
Where are you reading that?

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05-04-2010, 12:46 PM
  #90
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He does have a bankruptcy court deadline for the lease of the arena so the NHL will have to do something.....
If this deal cant' be consummated between now & then, or, a determination made that it'll fly without compromise/challenge and with 110% CERTAINTY it closes' shortly thereafter, the team stays put. The Devil will be in the Details of the new AMULA. I cant' see the NHL funding this team past July, and if Plan 'B' involves a sale & relocation they'll have to move awfully fast, plans for which I've got to assume are already in-place. Gary Bettman appears to be confident that the sale will proceed. We'll see.

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05-04-2010, 12:56 PM
  #91
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Originally Posted by GSC2k2 View Post
In conjunction with this, the important provision deals with the powers of a CFD, as noted here:

http://www.azleg.state.az.us/FormatD...48&DocType=ARS

As noted in subsection 5, the powers of the CFD do not (as some mistakenly assumed) extend to construction projects, but rather to:
Except that the CFD is supposed to be used to pay for (in part) the team and it's operating losses. I fail to see how the Team constitutes public infrastructure.

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05-04-2010, 01:41 PM
  #92
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Originally Posted by RR View Post
Where are you reading that?
I'm not. It's a question. It looks like this would be an atypical use for cfd funds. There must be someone who ensures it fits within the legal criteria laid out by the state. I'm just wondering what that process is.

While it can be argued that parking is infrastructure. The use of the money to purchase and then provide operating capital to a private business doesn't seem to meet the spirit of the cfd guidelines.

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05-04-2010, 01:57 PM
  #93
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Originally Posted by GSC2k2 View Post

As noted in subsection 5, the powers of the CFD do not (as some mistakenly assumed) extend to construction projects, but rather to:

Quote:
6. Establish, charge and collect user fees, rates or charges for the use of any public infrastructure or service.
Which I presume will be the cornerstone of any taxpayer concerns.

Did I miss the part where it states the proceeds should fund a private businesses ? Or if it doesn't state it, is it considered presumed ?

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05-04-2010, 02:27 PM
  #94
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Originally Posted by peter sullivan View Post
I'm not. It's a question. It looks like this would be an atypical use for cfd funds. There must be someone who ensures it fits within the legal criteria laid out by the state. I'm just wondering what that process is.

While it can be argued that parking is infrastructure. The use of the money to purchase and then provide operating capital to a private business doesn't seem to meet the spirit of the cfd guidelines.
I don't recall reading anything in the statute that addresses the state's ability to unilaterally challenge the CFD. I did find this:

http://www.azleg.state.az.us/FormatDocument.asp?inDoc=/ars/48/00706.htm&Title=48&DocType=ARS

Quote:
A. An owner or other person claiming an interest in the property who filed a written objection and who presented testimony or evidence at the hearing may seek review of the order forming the district and the decision of the governing body at the hearing by filing, within thirty days after the adoption of the resolution prescribed in section 48-705 which ordered the forming of the district, a petition for special action with the court of appeals. The special action shall be governed by the rules of civil procedure relating to special actions so far as applicable and not in conflict with this article...

...The (civil court's) review shall be limited to a review of the transcript of the hearing, the order forming the district and the affidavits of mailing and publication of the notice and resolution declaring the governing body's intention to form the district. The court may review, on the merits, whether the formation of the district and the adoption of the general plan complied with this article and the laws and constitution of this state and whether land is benefited by the district.

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05-04-2010, 02:28 PM
  #95
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Which I presume will be the cornerstone of any taxpayer concerns. Did I miss the part where it states the proceeds should fund a private businesses ? Or if it doesn't state it, is it considered presumed ?
GSC refers to point 6 above, which would appear to assume that the CFD can indeed be set-up to provide funding for infrastructure services however!, I tend to agree with your question/suggestion that interpreting it to be used to fund the partial purchase of a private, non-vital "service" is open to debate, which is why I questioned the CFD application without state approval in the first place. It just strikes me as being somewhat "liberal" in terms of the spirit of the legislation. Cant imagine things having gotten this far however without the COG/JR council having made sure it can be accomplished, no?....

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05-04-2010, 02:48 PM
  #96
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Are you referring to the City North ruling or some other AZ Supreme Court decision? City North did not involve CFDs.
Not directly but is did define certain things such as benefits. GI's statement of "The ruling should stop schemes that government concocts to subsidize developers based on grandiose promises that often fail to materialize," added Mr. Bolick. "Although we're disappointed that the Court allowed the CityNorth deal to stand for now, that development has proved to be such a disaster that it's doubtful taxpayer money will ever change hands. CityNorth will stand as a monument to government folly." may may others think about how that ruling will apply to CFDs.

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05-04-2010, 04:17 PM
  #97
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It just blows me away that this type of deal can get done in the current economy. If everything was going well then ya I could see something like this working but when there is no money, people losing houses still and the city forks out potential cash to a sports team? I know it sucks when you lose a team but as big of fan as I was in Winnipeg I didn't condone any tax payers subsidizing a team. You can say that this isn't a tax and I can't debate that but it still potential money that can be used to lower taxes. The COG could have done this to make improvements in other areas of the city or to lower city taxes but instead the money will be earmarked for an NHL team. A sports team should be completely paid for and subsidized by an owner not a city.

I don't agree with this and I think it's a bad deal for the 95% majority of Phoenix/Glendale population. For the true Phoenix hockey fans I know they won't agree with me but they would pretty much approve selling their own parents if it helped. Honestly so would I if roles reversed but looking at this subjectively it's a joke of a deal.

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05-04-2010, 05:18 PM
  #98
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Originally Posted by GSC2k2 View Post
As noted in subsection 5, the powers of the CFD do not (as some mistakenly assumed) extend to construction projects, but rather to:
5. Operate, maintain and repair public infrastructure.
6. Establish, charge and collect user fees, rates or charges for the use of any public infrastructure or service.
Well good afternoon!

The problem this use of the CFD is likely to run into is not a challenge regarding what powers the CFD has, but rather, how the funds raised by those powers are expended. The CFD is not going to be able to simply sit back and say “Well, we have the power to sell these bonds, and what we do with the funds generated by the sale is our business.” The CFD is going to face some very difficult challenges to it's definitions and plan:

Quote:
"Public infrastructure" means all improvements listed in this paragraph that will result in a beneficial use principally to land within the geographical limits of the district and may include a district's share of any improvements listed in this paragraph if the district board determines such share is proportionate to the beneficial use of such improvements to land within the geographical limits of the district, improvements within or outside the geographical limits of the district, necessary or incidental work, whether newly constructed, renovated or existing, and all necessary or desirable appurtenances…
The CFD also requires a General Plan.
Quote:
General Plan: B. Before adopting a resolution under this section, a general plan for the district shall be filed with the clerk setting out a general description of the public infrastructure improvements for which the district is proposed to be formed and the general areas to be improved.
Listing “Jerry Reinsdorf’s wallet” as the “general area to be improved” is not likely to hold up.

I don't doubt that Glendale can put the CFD into place and bond against parking revenues. The problems are going to start when they attempt to use the bond proceeds to pay the NHL $65MM instead of using the funds to improve the "public infrastructure" within the "geographical limits of the district". The challenge to this use of a CFD is pretty much assured to withstand any motion from Glendale for summary judgment and thus will result in the type of lengthy court process that the NHL seemingly would want to avoid.


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Originally Posted by RR View Post
I don't recall reading anything in the statute that addresses the state's ability to unilaterally challenge the CFD.
The State Attorney General does not require their ability to challenge/investigate improper governmental activity to be expressly stated in a statute. The Goldwater Institute has already commented that Glendale cannot sidestep the AZ Constitution with CFD language. Paraphrasing Sitren: “a subsidy is a subsidy and a judge will see through this.”

It's certainly going to be great fun to watch Glendale try to navigate the troubled waters. Personally, I don't think they stand a chance of getting away with misusing a CFD in this fashion. And that's just for the $65MM securitized by the parking revenue. We haven't even opened Pandora's $100MM-Line-of-Credit Box yet.

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05-04-2010, 05:23 PM
  #99
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It just blows me away that this type of deal can get done in the current economy. If everything was going well then ya I could see something like this working but when there is no money, people losing houses still and the city forks out potential cash to a sports team? I know it sucks when you lose a team but as big of fan as I was in Winnipeg I didn't condone any tax payers subsidizing a team. You can say that this isn't a tax and I can't debate that but it still potential money that can be used to lower taxes. The COG could have done this to make improvements in other areas of the city or to lower city taxes but instead the money will be earmarked for an NHL team. A sports team should be completely paid for and subsidized by an owner not a city.

I don't agree with this and I think it's a bad deal for the 95% majority of Phoenix/Glendale population. For the true Phoenix hockey fans I know they won't agree with me but they would pretty much approve selling their own parents if it helped. Honestly so would I if roles reversed but looking at this subjectively it's a joke of a deal.
I'm done trying to guess what will happen next, but I think you should consider the impact on taxpayers if the team was to leave. I'm all for lower taxes, but I don't see the team leaving with >$200M still due on the bonds to build the arena as an event that leads to "lower taxes."

COG taxpayers are on the hook for that money, and arena revenues have been paying the majority of those bills. With less arena revenue, the money will have to be found elsewhere to service that debt. That means cuts or higher taxes.

Not sure how one could construe the team leaving as an opportunity to lower taxes.

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05-04-2010, 05:31 PM
  #100
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^^ Because its not a hockey market and the citizens will go away next year when the team does not do as well. So paying for an arena with an AHL team is better than paying Reinsdorf when the team fails.

Boarding Jobbing.com up makes more sense than this deal.......but having said that, the COG can do a much better job of filling that place with events OTHER than hockey.

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