Quote:
Originally Posted by afc wimbledon
Well it kind of is though, the city is proposing to hire Hulsizer to run the facility for them (at 5 times market rate, I believe they are paying more than Yankee Stadium for managing an arena a quarter the size), Hulsizer will then lease the parking back to the city, even though they already own it. That is basically giving him money.
|
. . . . . AND, what are the other details?
Here is the 150 page lease document:
http://www.azcentral.com/ic/pdf/1210glendale_lease.pdf
City raises $100 million in 30 year bonds. City gives this money to Hulsizer.
Hulsizer gets $100 million up front and between $10 million and $20 million per annum for five years in cash payments for operating the Arena.
Hulsizer basically gives the NHL all of the money he gets from the city, including up front and in the first five years, making up the $170 million purchase price.
In return, Hulsizer guarantees the city the Coyotes stay in the arena for 23 years, the term of Glendales remaining financing for the arena, ensuring their fee/revenue streams to cover the arena financing remain intact. Hulsizer may own the team but he can't take it anywhere. The only thing he can do is sell it to another operator who is bound by the terms of the lease.
Hulsizer or whomever owns the team absorbs operating losses or enjoys operating profits through the term of the lease.
City gets up to $6 million per year in rent and fees from Hulsizer or any other operator through the term of the lease or as much as $180 million through 30 years.
City gets $25 million back from Hulsizer it put up front to guarantee losses in 2010-11 and Hulsizer gives a personal guarantee for $75 million of the bond issue.
City gets parking rights and naming rights for all events at the venue, not just the Coyotes. The value of this is in dispute but the lowest estimate from three consultants was between $60 million and $80 million through the life of the deal.
City incurs interest costs of borrowing for the term of the lease but say its $6 million per annum or $180 million.
At the end of 5.5 years, city can sell the Arena to the operator for a price up to $130 million or anyone else if the operator refuses or negotiate another agreement with the operator to operate the arena.
At the end of the lease in 30 years, the city can "put" the arena to the operator for $40 million, which would include parking rights. Basically, this ensures the city is getting at least $40 million from the arena at the end of term.
So, it looks like $170 million going out in five years.
It looks like the normal payments of $180 million for the bond issue are offset by the $180 million the operator would normally pay in fees.
It looks like there is $60 million to $80 million coming in from parking and naming rights, a number Goldwater disputes, while $100 million will be owed on the bonds at term.
It looks like the city is guaranteed at least $40 million for the arena at the end of term and could sell it for as much as $130 million before then.
Cost of debt on the arena and the bond is fixed and never changes. Parking and naming rights revenue could inflate through time, helping the city.
Not known above is whether or not there would be further cost to have someone operate the arena after 5.5 years.
If the operator wanted to leave Phoenix, would he be willing to pay Glendale a cost to sever the lease? Probably. Glendales asking price would probably depend on how much more Arena payments it has to make. It has to.
So, lots going out but also lots coming in. No, its not as simple as giving a guy $100 million.
Does it even out for Glendale? Is Goldwater right? There's some room for opinion but for them to say a "gift" probably takes a lot of balls.
Cowperson
Toews probably didn't have anything to do aside from seeing family/old friends/his roots and he didn't like being in the public eye and famous there and so he left after one and half months.
