Coyotes Arena Management

Sept. 16, 2015

Transcript:

TED SIMONS: Coming up next on "Arizona Horizon," why Glendale is aggressively pursuing new management for the Gila River arena. Also tonight, we'll hear how blogging is impacting journalism and the media. And we'll learn about a massive new general storage data platform. Those stories next on "Arizona Horizon".

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TED SIMONS: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. The city of Glendale recently voted to start looking for a new management group for the Gila River arena. This is just six weeks after the city signed a two-year management deal with the Arizona Coyotes. Joining us new is Glendale city councilman Gary Sherwood. Good to see you again. Thanks for joining us.

GARY SHERWOOD: My pleasure.

TED SIMONS: Why announce for arena management bidders now?

GARY SHERWOOD: You would think that -- I think the arena has been open about 14 years, you would think we had an idea what it costs to run an arena, and we don't. We have a figure of 6 to $6.5 million, that's been touted and that is what we budgeted for. Quite frankly I believe the Coyotes thought after that two-year arrangement to get us by that we would start talking and try to figure out something that was more feasible for the city as well as for themselves.

TED SIMONS: It sounds again the idea is that it -- you just signed that deal with the Coyotes. Why the rush for the RFP now?

GARY SHERWOOD: Again, my thoughts were that we would start negotiating a contract and let's say by January or so that things weren't going very well, then we would have to start covering our bases and look for something because the majority of council wanted to build -- make a decision by the end of March, give that 90-day notice so that they could take over management ourselves come July 1st, ourselves, that would be through a third party.

TED SIMONS: Right. For critics who say this isn't the best way to be dealing with the Coyotes, would you agree with that?

GARY SHERWOOD: I would agree with that. I mean, it kind of shows the team right now we're not so interested in negotiating with them, rather we're trying to get information as to what it really costs to run an arena and actually bring folks in. And we did this, you know, before we signed the original deal with them. We had a couple for non-hockey, just in case that we couldn't strike a deal for non-hockey, and again there is folks on our council that think that we can be successful without those 43 dates.

TED SIMONS: When the two-year deal was signed, both sides seemed like they were saying we are looking forward to maybe working together and finding a long-term deal. This particular action kind of puts that into question. At least from the outside. It seems that way. Does the city want a long-term deal with the Coyotes?

GARY SHERWOOD: They do. I mean, on the surface they say they want the Coyotes to stay. But, you know, they want it under our terms, and whatever those are. Again, you know, we were sending them $15 million a year and the plan was we would get $9 million of that back in revenue streams. And year one, we didn't make it. And a lot of that was the ink had just dried just before the season started, just before the season started. Last year, they didn't have a very good ice product, although they put money everywhere else. So, you know, in terms of their plan, they weren't expected to break even until year three, hence, the city would go along with that, and, so, now, you know, so, before we -- before the two-year deal, they had given us certainty where we would only have to give them the $6.5 million. We had that certainty that we wouldn't have to spend anything more than that. And I was really good with that, but there is those out there that thought that, you know, we could do better taking care of the arena management on our own. Not the city, but through another party and maybe it's the same folks that are doing it today.

TED SIMONS: Do you think the team did enough to schedule enough non-hockey events?

GARY SHERWOOD: They were disappointed with their third party after the first year. And we saw more events -- I think U.S. airways had 14 concerts and we had 12. You know, there is not a lot of concerts that are traveling and they're playing in the smaller venues, and we're always up against the -- the largest promoter in town owns, and so they're going to steer traffic towards that. Recently the Coyotes partnered with them. So we wouldn't be cutting each other's throat when we're bidding against the U.S. airways and as it turned out that, in most cases, nobody was making any money on those.

TED SIMONS: Interesting you mention that, the concern now for hockey fans at least is that the Coyotes are going to move to maybe another venue, and they're hoping it will be another venue here in the valley. If that happens, okay, the Coyotes lose, Glendale loses the Coyotes, some city people think that they can handle it. Perhaps, perhaps not. If the Coyotes move to another brand new venue, that is another brand new venue competing with yours.

GARY SHERWOOD: Yeah, and I bring that up often. And, so, you know Phoenix comes up as an option. I think they would have to bring private partnerships into that because I don't believe they have the bonding capacity to put up a new arena. Four, five, six years ago put a lot of money into U.S. airways. And then if you have one of the tribal, you know, like out at Talking Stick, some talk there, to your point, another arena that we have to fill and we can't keep what we have today filled.

TED SIMONS: What are you hearing from residents about this latest action and situation overall?

GARY SHERWOOD: Being presented that we are saving our citizens a lot of money over these next couple of years. You know, what they're failing to take into consideration is that west gate -- cities don't make money on arenas or stadiums. They use it for a catalyst for economic development. West gate never got beyond phase one because of the downturn. A lot of activity, a Dave and Busters moving in, and several new restaurants. If that arena becomes inactive, number one, you will not have whatever concerts we had coming. They want people that are used to serving drinks, food, don't have to a guest-- take the dust off of the seats, and they're not going to -- they're not going to attract that. They are not going to have the advertising. You don't have the sponsor ship, you don't have the naming rights. A thread of revenue streams that you lose.

TED SIMONS: I asked if you heard from residents and what they're saying. What about folks at west gate. What are they saying about the quick RFP, quick turn-around for this and seems to be a signal that the city doesn't trust the Coyotes and the city may not be interested in working with the Coyotes after this particular deal?

GARY SHERWOOD: Well, I mean, I know just before the vote, there was a couple of deals that were going to be signed and they were lost. Recently we did hear and I'm not sure it is even announceable, but we did hear of a company coming in, and -- to replace Margaritaville. Again, you have 43 nights as a minimum that the hockey team, and if they're successful, you can pick up the playoff games. Who do you replace that? What do you replace it with? No other sporting event that you can put in that arena that will drive that traffic.

TED SIMONS: When you ask that question, what do fell council members, the mayor, what do they say?

GARY SHERWOOD: They believe the arena can be better utilized than it has been. Again, I don't know with what. I don't know if you have -- any number of things. I don't know what you can put in there.

TED SIMONS: There was an audit done and it looks like the team may have shorted the city in naming rights, ticket surcharges, and the team refuses to give over the kind of financial statements that I think the city would like to see. Is there reason to not trust the Coyotes?

GARY SHERWOOD: Well, you know, and they will admit as well, I don't think it has been the greatest partnership. Whether that was our city manager and what occurred, you know, losing her, you know, it hasn't been the best. We really should have had an administrator in that building. It was frustrating for our audit team to look at the financials and, so, again, but they have to realize when you are dealing with a public entity, there are certain things that you have to go through. And, you know, U.S. airways does it. Yeah, there is a little distrust there with some of the council.

TED SIMONS: Last question. Real quickly. Do cities focus on sports, was it a mistake?

GARY SHERWOOD: It is hard for me to say. We kind of fell into both of them, right. The arena was supposed to go to south Scottsdale. They were trying all over the place to find a place for the football stadium. Again, without that downturn, that area was -- I think the mistake we don't talk much about the spring training complex and that is a whole other subject.

TED SIMONS: Yes, it is. That one will cost the city more than even the arena probably. Thank you for joining us.

GARY SHERWOOD: Thank you. Appreciate being here.

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