Carrie Ann Sitren

Avoiding a multi-million tax dollar 'emergency' in Glendale

Posted on May 10, 2011 | Author: Carrie Ann Sitren
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Months after cries of “emergency,” the City of Glendale will be given another season to try to keep the Phoenix Coyotes hockey team playing in the desert.

Last year, the Glendale City Council approved a contract with Chicago millionaire Matthew Hulsizer to buy the team with the help of $116 million in municipal bonds backed by taxpayer dollars. The council declared that the bonds were an “emergency,” which took away the taxpayers’ right to petition for a public vote on the deal.

Four months later, the bonds still haven’t sold and the deal hasn’t closed. The council members themselves said they were rushed and misinformed when they voted last year. One city economic analysis showing that the taxpayers could lose on the deal wasn’t released until after the emergency vote. The deal committed the city’s hockey arena (previously funded by $180 million in taxpayer bonds) to the Coyotes for another 30 years, and required the city to pay a $97 million management fee over the first five years, on top of the $116 million in new bonds. This certainly was not the kind of decision to be made quickly.

Scottsdale Mayor Jim Lane has written that he is glad his city isn’t in Glendale’s shoes, after having lost the bidding war a decade ago to lure the hockey team. The New York Times reported in September 2010, “With more than four decades of evidence to back them up, economists almost uniformly agree that publicly financed stadiums rarely pay for themselves.” Glendale has already racked up more than $3,000 per person in sports-related debt—not including what might be required to keep the Coyotes.

Tonight’s decision before the City Council would commit Glendale to spend another $25 million, for a second year in a row, to keep the Coyotes playing at Jobing.com Arena while a deal is made to sell the team to a new owner. If approved, Glendale will have another year for those negotiations. So there would be no reason to cut the time down to the wire. The city should take the time to study the economics and make all the information public, and it should not cut off any avenues for voter participation. This should not be another multi-million-dollar emergency.

Carrie Ann Sitren is an attorney with the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation.

Learn More:

Goldwater Institute: Consultant in Phoenix Coyotes arena deal named in fraud lawsuit

Goldwater Institute v. City of Glendale: A challenge for taxpayers to see public records

Arizona Republic: Phoenix Coyotes deal with Glendale raises concern

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