Yesterday it was announced that the City of Glendale and the Arizona Coyotes have reached an agreement that substantially reduces the payments being made to the team. The new deal is a victory for city, the Coyotes and most importantly, Glendale taxpayers.
For those not familiar with the dispute, Glendale entered into an agreement in 2013 with the owners of the Coyotes that would pay the team $15 Million dollars each year for 15 years to “manage” Gila River Arena. This is in addition to the $9 Million the city pays each year in debt service for the construction costs of the arena.
That is a lot of money for hockey, and taxpayers have been paying the price. Since the agreement went into effect in 2013, Glendale has approved 3 property tax increases and also dropped the sunset on the “temporary” sales tax increase. At 2.9%, Glendale has one of the highest sales tax rates in the region:
Without a substantial change to the management agreement, high taxes and cuts in city services were going to be a fact of life for Glendale. That is why the widely criticized decision by 5 members of the city council to cancel the management agreement last month was a bold yet necessary move. It didn’t matter that the city had a very good legal case to terminate the agreement, the public relations deck was stacked against the council. Yet they did not blink from the scrutiny and held firm in trying to protect Glendale taxpayers.
As a result, the city was able to renegotiate a new agreement with the Coyotes that cuts the management fee by more than half, reduces the length of the contract to two years and makes what was a clearly a one-sided agreement a bit more equitable.
And while it is questionable as to why any fee should be paid to manage the arena (most similar management deals involve little to no fees), it was not a sure thing that the city would prevail on their conflict of interest claim. It is better to get some relief than risk getting nothing.
Glendale is not out of the woods. Even with the millions saved under the new agreement, the city is still bleeding red ink on other questionable ventures such as Camelback Ranch. Additionally, the council should not ignore Glendale’s sky high tax rates and see if some much needed reductions can be made.
There is still a lot of work to be done, but today’s agreement goes a long way in getting Glendale back on the right path.
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