Many say the definition of insanity is doing the same thing over and over, yet expecting a different result. The City of Glendale has suffered adverse economic, legal, political and social impacts from its arena lease agreement for more than a decade, yet its primary structure remains unchanged. Why?
As the legal battles wage on with the city and the Arizona Coyotes, it seems the original business model crafted specifically for Steve Ellman may be terminally flawed when it comes to managing and operating the city-owned Gila River Arena. And after reviewing the financial performance of the facility and its operators to date, one can argue it never really worked.
As both the developer of Westgate and owner of the then Phoenix Coyotes, Ellman’s interests were understandably all inclusive from the start. In assuming the majority of the project’s risk and liability, he likely wanted every opportunity to generate revenue and ensure the best return on his investment.
As time passed and the concept, as well as the club, faltered, city leaders were unwilling to consider alternatives to the original structure of the agreement and routinely imposed the same all-or-nothing deal on every potential buyer who expressed an interest in the team.
For years, this newspaper inquired with then City Attorney Craig Tindall as to why a management agreement similar to that of the University of Phoenix Stadium wasn’t considered for the arena.
Each time we asked the question, we got the same answer: “It just wouldn’t work.” When pressed repeatedly for the reasons why not, Tindall would only reply, “It wouldn’t work.” Considering all that has come to pass, now one can’t help but ask, wouldn’t work for who?
Just how does a hockey team qualify as an arena manager anyway? Wouldn’t the considerable roles and responsibilities of such a contractor directly detract from the core business of the club? Could it possibly require resources that are needed to secure the quality and success of the primary product? Why not employ professionals in their respective fields to maximize the revenues and income to each entity, as well as the city?
Looking just across the street, University of Phoenix Stadium seems to function quite well with Spectra as the stadium’s management company and the Arizona Cardinals as its major tenant.
Though it may be a matter of scale, why couldn’t Glendale and IceArizona negotiate a contract to include a management company in the mix that would mirror its substantially larger sports and entertainment neighbor to the south?
Imagine the synergy that a professional management company could create with the exclusive opportunity to leverage two state-of-the-art facilities simultaneously, as well as individually. Add two or more professional sports franchises as tenants and it suddenly seems the sky is the limit. Why wouldn’t that work?
The team could focus on its development and success, the management company could aggressively market, recruit and schedule acts, concerts and events and the city could turn a taxpayer drain into a municipal moneymaker.
With just a little give from Glendale and the Coyotes to make room for a third partner, it seems both the respective obligations and risks would be diminished to each while the returns and revenues would only increase to all. And that would work for everyone.