The $500,000 paid to Jamison every game fallacy

Glendale First! is aware that one of the “talking points” of the people circulating the petition to negate the arena lease deal between the City of Glendale (CoG) and the Jamison group for the Coyotes hockey club is that CoG will have to pay Jamison $500,000 for each game played at Jobing.com. This isn’t true, here are the real numbers and the explanation for the erroneous math (we believe).

The City of Glendale owes about $260 million on the arena. With or without an anchor tenant, that has to be paid or the arena will be in foreclosure.

The entire period of the lease agreement is 20 years. Over that period of time, the arena management fee paid to the Jamison group to manage Jobing.com arena changes. The math that the people circulating the petitions is, to the best of our knowledge, based on 40 hockey games per year with the City of Glendale paying Jamison $20M for the arena management fee. That math, $20M divided by 40 games WOULD equal $500,000 per game. However, their premise and their math is flawed, and deliberately so to inflate the cost and inflame the ire of potential petitioners long enough to exract their signatures.

We will only change the incorrect 40 game count and use the more correct 41 games., although the Coyotes are extremely likely to play MORE than the scheduled 41 games per year with pre and post season games. For now, we will leave out of our totals ALL the other events already scheduled at the arena (below) this coming year which will obviously be attended and producing revenue. We could safely assume that a well schooled, professional arena management team such as Jamison’s would be able to schedule even more events, but for now let’s give “them” the benefit of the doubt and just talk the bare minimum number of hockey games.

  • Two nights of skateboard competition
  • American Idol Live Tour
  • Gymnastics Champions Tour (after the Olympics)
  • Red Hot Chili Peppers
  • Justin Beiber
  • Carrie Underwood
  • Eric Church

We will also assume in our calculations, to continue the WORST CASE scenario, that the Coyotes will have the worst attendance record in the NHL, soon to be very unlikely because of their continued success on the ice. Please understand that the Coyotes performance will nearly guarantee sold out playoff games over the course of the 20 year agreement. What we will do is account for the entire length of the agreement because of the sliding scale payment amounts to provide more accurate numbers. There is a table below with the breakdown by year of the arena management fees paid to the Jamison group minus the rent paid BY the Jamison group for using the city owned arena. The net total is $286.2M. The total number of regular season games over 20 years is 820 (41 games x 20 years).

Now we add in a $24M capital improvement fund that Glendale is contracted to provide over the twenty year agreement. This number could logically be excluded from the total because it would have to be spent whether there was an anchor tenant or not since the building has to be maintained. But, let’s add it in anyway to bring the total net cost to Glendale of the Jamison/Coyotes 20 year arena lease deal to 310.2M for an average of $15.5M per year without the contracted additional revenue. Calculating the cost per game at this point, we arrive at $378,292.68 (310.2M / 820 games), a LOT of money but significantly ($121,707.32) less than is claimed by the petitioners, even before we have subtracted the other streams of revenue that will be paid to Glendale. So, we now have proved the opposition is using deceptive, in fact completely erroneous, numbers.

Let’s continue with the exercise and back out the ticket fees paid to Glendale by the Coyotes. The first five years of the agreement Jamison pays Glendale $2.75, after that $3 per ticket for an average per ticket fee of $2.94 over twenty years. Please keep in mind that fee is paid for all of the other events at the arena too, the ones we have elected to leave out of our calculations to give our opposition a distinct advantage to justify their numbers. Let’s continue by multiplying 41 games per year by a horrible 13,000 people per game (at least 533,000 people visiting Westgate and the arena per year) to arrive at 10,660,000 people total over 20 years. Consider that number, a bare minimum 10.6 MILLION people will come to Glendale with the Coyotes at Jobing.com, ZERO if they leave. So, the total paid to Glendale for tickets over 20 years would be at least $31.34M. Of course an optimist would hope that those 10.6 MILLION PEOPLE would spend a buck or two at local businesses along the way once in awhile. Let’s reduce the net amount paid by Glendale ($310.2M) by the ticket fees to arrive at $278.86M expense for Glendale. Now we’re down to $340,073.17 per game.

Glendale’s cut of the naming rights to the arena will be about $8.8M, this is an estimate and depends on the market value negotiated when the current arena naming rights expire. If we subtract that we’re down to $269.96M or $329,219.51 per game. We’ll stop here, there are other amounts (sales tax, etc.) that will reduce Glendale’s liability and thus taxpayer liability.

The best study on arena costs and options has stated that Glendale will lose money on the arena with or without the Coyotes, yet it concluded that the loss is significantly reduced with the Coyotes as the anchor tenant. (click here for study) Is this an ideal situation? No, Coyotes PAC does not believe it is. We do, however, unequivocally state that the oppostion is using deceptive numbers in their talking points AND that the currently approved arena lease deal is unequivocally the best deal presented to the city and it should be embraced.

Now, consider this, please. We are convinced that a core concept within the Jamison group business plan is the eventual ownership of the arena. Is it guaranteed? Of course not. However, assuming some success with building the Coyotes and the arena business, we believe that the arena will be sold to the Jamison group per the terms already agreed upon in he current agreement within six years. Once that transaction is complete, all of the above Glendale EXPENSE numbers disappear, yet the Glendale INCOME numbers remain.

Thus, the current arena lease deal is a big win for the City of Glendale and it’s taxpayers.

Thank you for your time reading this.

Year Mgmt Fee Rent Total
1 $17M .5M $16.5M
2 $20M .5M $19.5M
3 $20M .5M $19.5M
4 $20M .5M $19.5M
5 $18M .5M $17.5M
6 $18M .65M $17.35M
7 $18M .65M $17.35M
8 $16M .65M $15.35M
9 $16M .65M $15.35M
10 $16M .65M $15.35M
11 $16M .65M $15.35M
12 $15M .65M $14.35M
13 $15M .65M $14.35M
14 $15M .8M $14.2M
15 $10M .8M $9.2M
16 $10M .8M $9.2M
17 $10M .8M $9.2M
18 $10M .8M $9.2M
19 $10M .8M $9.2M
20 $10M .8M $9.2M
Totals $300 $13.8M $286.2M

I signed the petition, but I changed my mind

If you signed the petition to get the referendum on the ballot, and have now changed your mind, you can withdraw your signature.  There are three ways to do this.

The first is the easiest, find the person who was circulating the petition locate your name and cross it out (the entire line).  The Circulator must allow you to do this.

The second requires you take a trip to the City clerks office to file a statement that you wish to have your name removed from the petition, no later than 5 Pm on the day the petition is filed with the Clerk.

The third way is to sign a statement, have it notarized and mailed to the City Clerks office.  They have to receive this no later than the 9th of July.   If you need this form; click here.

If you have signed the petition and after reading the facts about the Arena Lease Management Agreement, have changed your mind, please withdraw your signature from the petition. It is your right! [A.R.S.§19-113]

Who Is Greg Jamison, The Arena Bidder?

Greg Jamison at Glendale City Council meeting

No one, especially in sports and politics, knows the future. They can make estimates and predictions but historic facts, current statistics, and an understanding of what needs to be done are heavily relied on tools. To outsiders, the Phoenix Coyotes are a very small market team that loses money. They fail to see, or fail to look at why, and they make assumptions. They don’t see the history of shoddy mismanagement of funds, they don’t see the Coyotes ever being the top priority in the owner’s eyes, and they don’t see that hockey success in the Valley was never an effort with who used to own the team. To outsiders, they see this black hole and it’s hard for them to envision an owner transforming the team because the Phoenix Coyotes history never had that before.

To outsiders, they see and hear NHL leaders in front of the City of Glendale and potential owners of the Coyotes say that they can turn this around amidst doubts and skepticism of the outsiders. Instead of viewing them as business owners and operators the outsiders view them as if they are running for office in a campaign rather than investors in a business.

So we’ll let Greg Jamison’s proven history explain who he is and what he can bring to the table.

So now the outsiders, the skeptics, may say that the Coyotes are hockey, so his experiences with the Indiana Pacers and securing sponsorship deals that helped the arena to be financed, shouldn’t be compared because that’s the NBA. And under the same excuse, we shouldn’t compare what he did in Dallas with the Mavericks and his helping to establish the front office into one of the most respected in the NBA. Neither should be used as examples to show what he can do for a hockey team. So let’s be fair then, if we want to know what Greg Jamison can do with a small market NHL team, a city owned arena, and a situation where he would possibly have to manage the arena as well, we have to look and see if in he has that in his history.

And Greg Jamison does, with San Jose, for thirteen years.

Greg Jamison in 1996 became President and CEO of Silicon Valley Sports & Entertainment. They own the San Jose Sharks and also Sharks Sports and Entertainment, which handles the day-to-day operations, marketing of the team, as well as ticket sales. They also manage the additional acts that come to HP Pavilion arena as well and of course the anchor tenant, the Sharks. Jamison also focused on local ice facilities in the San Jose area and spearheaded a management group for those facilities, including Sharks Ice at San Jose. This investment of resources helped aid in the growth of local hockey among children and adults.

Greg Jamison has made charitable contributions to the community as well. He helped create the Sharks Foundation who assists with social, educational, and cultural needs of the community and helps provide financial assistance and other resources as well. Their site (thesharksfoundation.com) states that this foundation has donated more than $5.7 million to over one hundred non-profit groups in the community.

But what are his concerns with business success with a small market team? In 2003, amid his tenure with the San Jose Sharks, he had a candid interview with chuqui.com. It is almost eerie in his words with how similar it was then in San Jose to how it is now with the Phoenix Coyotes.

When asked about finances:

“From the Sharks standpoint specifically, the team lost money last year, and is projected to lose money this year. In talking about the Sharks, our goal has never wavered from winning the Stanley Cup, but I also feel we have to follow a good financial strategy and a good budget process and all those things that go into running a good business, but our business is hockey and running this arena. You have to remember that winning is not a function of throwing money at the team but spending money wisely.”

When Jamison was asked about revenues:

“If you look at your overall financial picture, you have to put all of that out there: ticket price, parking revenue, food, and it all comes into play when you look at revenues. Our goal as a franchise is to chase revenue as much as we can, and in some cases and get outside of the consumer. Our goal isn’t to see how much how much we can take ticket prices up, our goal is to see what revenue we can get outside of that, and our more encompassing goal is to get our expenses in line so we take in more than we spend and still have a very good and competitive product that doesn’t take it’s eyes off of winning the Stanley Cup.”

When asked why the city has to be involved:

“This is a city-owned building. There are times when the city has to share the costs. We should not be expected to bear the brunt of all improvements to the building.”

And when asked about bringing in new fans to games:

“We’re still in a non-traditional hockey market. We’re in a very fragmented media market. And I think the thing that really drives that is you can have a good regular season and a first round, but I think if you go deep into the playoffs and there’s a real strong concerted interest in the game and what’s going on and you have a deep playoff run and you’re in the third round and into the finals, that’s when I think your television numbers can get a pretty good spike that you might maintain into the future. Hockey on television, for the person who loves hockey and understands the game, they can watch hockey on television and enjoy it. For the more casual fan, even if they’re in the arena may or may not get into hockey on television as much until their sophistication and interest grow. I think thirdly one of the things that will help hockey on television is HDTV. It seems to make it more vivid, puck following is easier for some, so I think there’s a lot of upside potential, but we haven’t fulfilled it. And even when you look at radio and television down the road, eventually you’ll have people in place who’ve grown up on Sharks games and become a sportscaster on a channel, and talking about hockey as well as football and basketball and baseball. Remember, at the end of the day, we’re still only 12 years old. We have not gotten to the point yet where we can take it for granted.”

This is a man whose team’s record during his time in San Jose was 530-377-155 and had even secured the President’s Trophy. This is a man who helped his organization have a consecutive sell-out streak of 118 games. This is a man who knows that the community, the on and off ice product, and an experienced front office staff need each other to sustain success.

Greg Jamison holds an understanding of how to grow into a winning team and knows when he speaks in front of the City of Glendale and states he believes there can be success in Glendale with the Coyotes, it isn’t just empty words but proven action and history behind him as clear evidence.

Coyotes Doan wins Mark Messier Leadership Award

From the GLENDALE STAR
June 21, 2012

Phoenix Coyotes captain Shane Doan received the 2011-12 Mark Messier NHL Leadership Award, presented by Bridgestone, during the 2012 NHL Awards ceremony at Encore Theater at Wynn Las Vegas.

The award recognizes the person who is a superior leader in hockey and as a contributing member of society. It honors the individual who leads by positive example through on-ice performance, motivation of team members and a dedication to community activities and charitable causes.  |  Read More

NHL Commissioner Comments On Coyotes Ownership, Chastises Goldwater Group

by Pete Holby • Jun 23, 2012 2:22 PM MST
from Desert Dirt

NHL commissioner Gary Bettman was interviewed by Rob Kerr of Sportstalk 960 while attending the NHL Draft over the weekend, and he had comments about the ongoing Coyotes ownership/arena saga. He also had some harsh words for the Goldwater Group, the watchdog organization suing the city of Glendale to prevent a deal that would keep the Coyotes in Arizona. Bettman suggested that moving franchises was “a last resort.” He added: “We don’t look at where we’re going next unless we absolutely have to leave a place where we are. So we’re working on fixing Phoenix because it’s the right thing for fans of the Coyotes.”  |  Read More

Yeah, Moyes IS The Bad Guy

Contributed by Bea Wyatt

I decided to look into when it was that Goldwater Institute (GWI) started to interject themselves into the Coyotes/NHL/Glendale negotiation process.

In combing through the GWI, I discovered the first time that GWI Got “on the record” in this matter was (according to GWI) February 26, 2009. On that day, Carrie Ann Sitren was speaking on Channel 12. It is now marked as a private video on YouTube.com. Since the video is blocked and requires a password, so I was unable to view it, but there was a synopsis of the video on the GWI site:

“There are reports that the City of Glendale could give the Phoenix Coyotes $15 million a year to help keep them in business. The Goldwater Institute’s Carrie Ann Sitren talked with Channel 12 about how far cities can go in helping private businesses”

I thought it was strange that at this point the headline was the “Coyotes” and not “Moyes” who was the owner of the team, as well as a local businessman and a former (maybe even current) board member of Goldwater.

In another video from Channel 3, posted on YouTube on May 13, 2009, Ms. Sitren clearly states that it was indeed Jerry Moyes who had provided Goldwater with the information about the potential arena management fees. Click here to watch the video, listen to the misleading if not incorrect dollar amounts.

Within a few months the hockey season was over and before the ice had thawed inside Jobing.com arena, Jerry Moyes had taken the team into bankruptcy.

Jerry MoyesDuring the summer we learned from the bankruptcy hearings that the NHL had been infusing the team with money throught out the last season at least if not longer, and that the NHL, for all intents and purposes, had taken control of the Coyotes in November 2008 by virtue of a proxy agreement with Moyes. The NHL claimed this agreement, and several others signed by Moyes, specifically barred Moyes from filing for bankruptcy.

We can surmise that sometime after the NHL had assumed control of the Coyotes in November 2008, and before the time that Ms. Sitren had her tme on Channel 12 in February 2009, Mr. Moyes notified GWI that the CoG has been contacted to work on an agreement that will require them to pay to have their building managed.  This was conveniently called a “subsidy” versus an arena management fee by Moyes, who, in my opinion, leaked confidential information to Goldwater with the specific intent, if not even direct instructions, to poison any possible sale of the team with Glendale voters and the public at large by turning opinion against the team.

Moyes attorneys in August 2009 had been sanctioned by the bankruptcy court for “leaking” confidential information with the intent of destroying a potential sale of the Coyotes to Jerry Reinsdorf, one has to wonder if this had been the only / first time this had occurred, especially considering the close relationship Jerry Moyes had with Goldwater and probably still maintains.

As far as I was able to find this interview was the first time that Goldwater has a record of commenting negatively on the Coyotes and a potential buyer. The real questions should be, why would Moyes want this information to be shared with anyone, much less a “tax payer watchdog” group.  In my opinion, it is to scorch the earth, and to  turn public opinion against any deal that would keep the team in Glendale that required the city of Glendale to pay for maintenance or management of their city owned property Jobing.com arena.

This still doesn’t make sense until you move forward a few months to May 5, 2009. On this fateful day, Moyes files the necessary papers to take the Coyotes into bankruptcy. That very same day (we hear), Gary Bettman, Comissioner of the NHL was headed to Phoenix to meet with Moyes to go over the options to sell the team to potential buyers, especially Jerry Reinsdorf. This sale would keep the team in town for at least a few years, with the option to move if the team wasn’t able to make a go of it.  But this plan would require an special taxing district to pay for the management fees. This, incidentially, is the confidential information that Moyes attorneys got caught leaking, garnering sanction from the court.

Moyes was aware that the sale price being tossed around by the NHL wouldn’t leave enough extra to allow Moyes to walk away from the sale with the $103 million that he felt he was owed. However if he were able to sell the team to someone who woud pay more for the the team, regardless if the team would stay in Glendale or not he could walk away with more cash. In walks Canadian Blackberry billionaire Balsillie, a man dying to own a hockey team.  With Balsillie happy to toss money at Moyes to take possession of a NHL hockey team, Moyes (and Gretzky) could walk away with a fat wallet or at least “whole”. The only real problem was that Balsillie had already tried to buy a hockey team or two, and was turned down by the NHL Board of Governors, not once but twice in the previous 3 years. So now to get the NHL to accept Balsillie, force the NHL’s hand by taking the team into bankruptcy. Surely the bankruptcy court would force the NHL to sell the team to the highest bidder, insuring the creditors would be paid. Moyes was one creditor with a balance due, he says, of 103 million.

It didn’t work out that way for Moyes. The resulting sale to the NHL forced by the bankruptcy court has placed the team into the three year limbo drama that we are currently experiencing. It has also seen the Goldwater Institute to dig in like a dog with a bone. The question remains, why?  Well we could say that it is because Moyes was a board member of Goldwater (2000 he is on the letterhead), or that because he is still, by his estimation, owed 89 mil.  Or maybe he has decided that because he didn’t make a good land deal in Glendale, because between Moyes & Ellman, this was all a land deal, that the citizens of Glendale would suffer. GWI is making the Jamison Deal out to be a bad deal, but the reality is that it is a good deal in nearly every way for Glendale. The NHL has, over the past three years, attempted to protect the citizens of Gledale’s investment in Jobing.com arena.

The Coyotes are not a land deal, they are a professional hockey team.

Keep the faith, Coyotes brothers and sisters.

Goldwater is flouting discretion by suing

FROM THE ARIZONA REPUBLIC
June 10, 2012
by E. J. Montini, columnist

There are hundreds of “think tanks” in the United States. The Phoenix-based Goldwater Institute is becoming one of the most famous. Or infamous.

And it’s not because the Goldwater folks are really good at “thinking.” It’s because they’ve gotten really good at suing.

Putting the “Hip” in Hypocrite

It’s been fun to be the “tinfoil hat conspiracy theory” guy for the past week or so. It’s easy to dismiss the Goldwater “coincidences” as nothing more than that, even in the face of simple logic. One only has to go back to the original bankruptcy filing by Goldwater board member Jerry Moyes to see the connection between the Goldwater Institute and Moyes were strong then, they remain strong now. Remember the leaked document eventually attributed to Moyes’ lawyers? Remember the initial lawsuit filed by Goldwater against the City of Glendale (CoG) almost immediately and to the direct benefit of Moyes’ position in the bankruptcy proceedings? There are many more “coincidences”, and they continue.

The other pet peeve I’ve been harping on with my tinfoil tirades is the hypocrisy of a 501(c)(3) corporation, benefiting mightily from being tax exempt and paying their staff members well, yet suing CoG and others for what they characterize as subsidizing private entities. We’ve discussed the Suns and Diamondbacks being well represented on the Goldwater board and the distinct lack of pursuing any government subsidies from which they benefit.

My theory that other pro sports being represented within the Goldwater old boy network looks suspicious considering the zeal with which the Insititute is pursuing the death of the Phoenix Coyotes has been seen as just another crackpot idea, even by friends of the Coyotes. Maybe, I don’t have all the facts, I just see consistent patterns that are hard to deny.

Why didn’t Goldwater pursue Mesa using their “gift clause” toy over their $100M stadium gift to the Chicago Cubs? Is it because Jeff Flake is the representative in Mesa and also a contributor of people and philosophy to Goldwater in between his fact-finding trips? Nah, that’s impossible.

Today we’ll visit some other Goldwater supporters and run through their financial benefits from government subsidies, these are direct subsidies (legal of course), not just a 501(c)(3) tax benefit.

Goldwater Philosophy

The stated purpose of the Goldwater Institute is ostensibly to protect the constitutional rights and privileges of citizens, not specifically Arizona citizens. From their web site:

Founded in 1988 with the blessing of the late Senator Barry Goldwater, the Goldwater Institute’s mission is to advance freedom and protect the Constitution.

As a non-profit organization funded solely by individual donations, we stand on principle, not politics. Headquartered in Phoenix, Arizona, we believe in the power of the states to restore America to the founding principles that made it a beacon of opportunity, prosperity, and freedom.

We research and develop ideas that help states use their constitutional powers to protect their citizens’ liberties. And when governments overstep their constitutional authority, the Goldwater Institute defends citizens in court.

Nobody will argue the right of anybody in our United States to mobilize and pursue their philosphy with whatever resources are at their disposal, including Goldwater. As a dad who has had five kids go through the Cave Creek Unified School District, I can say that we have had direct interference from Goldwater with what the majority of our people felt was an excellent and legal use of a school bond issue.

While Goldwater (GWI) is based in Arizona, their stated mission is to protect the rights of all citizens of the United States, yet their concentration on local issues belies that statement. The conservative bent of GWI attracts like minded individuals, of course, just as liberal minded individuals would support liberal organizations. It’s the American way. The problem is the, dare we say it, hypocrisy of GWI pursuing “government subsidies” while many (if not all) of their board of directors and most generous supporters have amassed significant wealth by taking advantage of the same thing.

Consider the following two GWI proponents of litigation against Glendale and the Coyotes based on perceived subsidies from the city to a private enterprise.

John Norton

John R. Norton III, his family and his companies have made significant and important financial and other contributions to Arizona, nobody can question their generosity and philanthrophy. John and his family and companies have had a positive impact on the state of Arizona, I am not questioning that and applaud the generosity.

Besides being a GWI board member, the Norton family provided a $1 million grant to the Scharf-Norton Center for Constitutional Litigation (a GWI entity), which is now suing the City of Glendale.

The JR Norton Company is in the agriculture business. Their products include strawberries, cantaloupe, honeydews, citrus, asparagus, cotton, wheat, alfalfa, cattle feeding (hay). They also have ranching operations.

JR Norton owns or is affiliated with several other companies. Cotton, Norton, and Stevenson Consulting, Inc. is a management and financial services business started in 1992 specializing in agriculture, agribusiness, real estate, and venture capital investment. Norton is affiliated with Stevenson Family Farming, L.P. and Desert Trailways Mutual Water Company. I don’t have the resources to discover and investigate the financials of these companies, but clearly the main focus of Norton’s business and his source of wealth is agribusiness. Norton, and thus Goldwater by dint of donations and grants from Norton and companies, has most assuredly benefited directly or indirectly from agricultural subsidies.

Norton was President Reagan’s Deputy Secretary for Agriculture in 1985-1986. JR Norton ostensibly opposed agricultural subsidies but did nothing to eliminate or reduce them. In fact, subsidies increased during his tenure. While we know that a Deputy Secretary really doesn’t have the juice to get a job like reducing the subsidies for a group as politically powerful as agribusiness, I am of the opinion that to verbally oppose something while still reaping huge benefits from same is hypocritical at best. (see http://www.downsizinggovernment.org/agriculture).

I understand that litigation is a natural part of doing business. There is no indication, really, that Mr. Norton is dishonest or culpable in any fashion. We’re looking at the disparity between one’s philosophy in business and the philosophy espoused by people one associates oneself with.

In 1983, the JR Norton Company was brought to court for its violation of the California labor code as it relates to the right of union workers. See here and here.

While a Director at the Apollo Group, and Chairman of its Compensation Committee, Mr. Norton was among Apollo Group executive mentioned for “fuzzy accounting” in an action against them by the Louisiana Municipal Police Employees’ Retirement System for backdating of stock option grants. See here and here and here.

From publicly adamant opposition to government subsidies it is clear for example that Goldwater also supports school choice, and school finance via school vouchers.  John Norton is a board member of New Directions Institute for Infant Brain Development (NDI). NDI is a member of the Arizona Children Association, a nonprofit that accepts both private and government funding. Goldwater favors charter schools over public schools. In Arizona, however, as in many other states charter schools receive public funding, government receives all of its funds from taxes and/or bonding.  It would seem the “limited government” argument in this case is, well, selective rather than limited. Picking and choosing in this fashion has been referred to as “situational ethics”.

Mr. Norton was also a director with Shamrock Foods Company, a subsidiary of Shamrock Farms which is the largest dairy company in the Southwest. Shamrock Farms and Shamrock Foods are owned by another Goldwater board member Norman P. McClelland (see below) and his family for another node in the old boys network. Six Degrees of Separation from Kevin Bacon, anyone?

Norman McClelland

Norman P. McClelland is another influential Arizonan and powerful Goldwater Institute backer. He has made huge financial contributions to Arizona, especially to educational institutions, including a $19-million building at the University of Arizona that carries his name. He supports political campaigns with $102,100 of his contribution in the 2008 election year going to mainly Republican causes. In 2007 he also contributed $1 million to Goldwater’s Scharf-Norton Center (which, it appears, he later borrowed back). Other publicly available records show him donating $4800 to John McCain’s campaign in 2010, $2,400 to Jeff Flake’s campaign, and $10.000 to Rick Renzi (who is now federally indicted for include conspiracy, wire fraud, money laundering extortion and insurance fraud.)

Shamrock Farms also receives significant government subsidies, thus Goldwater is also reaping these benefits by virtue of large donations available because of the extra cash people and companies have received from our tax dollars.

Goldwater’s tax return (2009 GWI 990) for 2009 shows a loan in the amount of $1.2 million dollars to Shamrock Farms. There is no further detail on when the loan was made or what it was for. The balance due on the loan at the time of tax return filing was $950,000, I have yet to be able to obtain later returns so whether the loan has an outstanding balance will remain a mystery for now. I am assuming the loan was unsecured, but have no idea if it was interest free or low interest or “normal” interest. It does indicate, however, that Mr. McClelland obviously has very significant influence on Goldwater. To assume he has no influence on the direction in which Goldwater will proceed would be naive, wouldn’t it? I mean, if Mr. McClelland said, in a board meeting or over lunch, to Darcy or Clint “Hey, you guys, since John and I have been lining our pockets for years with government subsidy money, maybe we should find another direction for the Institute to pursue lest we look hypocritical.”, they would have to listen, wouldn’t they?

Farm Subsidies Don’t Count, Sports Subsidies Do

The economic literature showing the economic benefits of subsidizing sports team, stadiums, and even huge events like the Super Bowl, the Olympic Games, and World Soccer Cup, are nearly always lower than the costs. However, societies do not invest in public projects for economic profits alone. Quality of life questions are hard to answer, hard to legislate and impossible to adjudicate. So, because sports are “only games”, they will always be the first target for cuts and scrutiny because it’s easy to dismiss them as frivolous expenditures. Maybe that’s even true in some cases.

This is the angle that makes the opposition to the Glendale/Phoenix Coyotes sale incomprehensible as influential members of the Goldwater Institute have benefited solely at the public’s expense with no investment back to the “community”. The farm subsidies they have received over the years simply benefited the company/owner.   If either of these men were asked about receiving farm subsidies…how much?…how long?…the question would undoubtedly go unanswered. In fact, the numbers/dollars are not publicly available, or at least I wasn’t able to find them with my limited skills and resources. I believe it would take a lawsuit or heavy media pressure for public record to get the numbers, obviously we all know that a schmo like myself would soon be outspent and outlawyered if I raised even a basic request or suit. However, there’s little doubt that these men have been receiving considerable subsidies for years. Consider the evidence below.

The State of Arizona has been receiving farm subsidies for decades now. There have been up to 28,000 recipients of about $1.4 billion in farm subsidy over the 1995-2009 years alone. Well over $25 million of that amount have gone to milk and other dairy products and services, in the process surely benefiting Shamrock Farms, Shamrock Foods Company, JR Norton Company, and their affiliates. See the Farm Subsidy Database where the data can be manipulated by state, county, and congressional district.

Moreover, direct subsidies to agriculture are not the only subsidies; huge government projects like dams and canals which deliver water to agriculture, such as the Hoover Dam are indirect subsidies to agriculture as well. Obviously any entity making money with agriculture in a desert environment is highly dependent on a reliable source of water in a normally nearly water free environment. So, government water.

The agriculture from which the associates and directors of the Goldwater Institute made their old money has depended on government support for decades, as Harry Ayer shows (click here). Although it’s fallen to around 12% now, in 1983 total federal farm subsidy was 48% of net farm income. In fact, during the 1980-2001 years, “subsidies reached record or near-record proportions,” according to Harry Ayer (same document above). Most payments went to large beef, hay, fruit, and vegetable producer in which both Shamrock Farms and JR Norton Company have huge stakes, given their relatively large size in Arizona and the Southwest (click here) and then (click here) and then (click here). The evidence is overwhelming. Arizona federal politicians have served the state well in this regard. In 2006 the Washington Post reported that the U.S. government paid out $95 billion in agricultural subsidies in one year, enough that some dairy farms were selling milk at prices far below production costs, and made up the difference from subsidies (http://farm.ewg.org/, http://www.washingtonpost.com/wp-srv/nation/interactives/farmaid/).

If agricultural subsidies can be defended, why is a stadium subsidy from the City of Glendale to the prospective Phoenix Coyotes buyer in question? The answer undoubted lies in partisan politics, the old boy network and, yes, maybe even a personal vendetta than in the facts alone. Consider this; litigation will cost the city government (or the very Glendale taxpayers the Goldwater Institute claims to protect) …millions. Some of those millions would go, in the unlikely event of a Goldwater win, directly into the pockets of Goldwater.

We’ll be looking around at more Goldwater Institute board members, contributors and employees as time goes on.

Since they’re fond of cute catch phrases like “Let the sunshine in” or “I think you need another cupcake”, I submit they begin to consider one of my personal phrases:

“If you’re going to talk the talk, you have to walk the walk.”

Credit for research and some writing gratefully given to Anonymous. Anonymous, you da man!

Top programs in Arizona receiving agricultural subsidies, 1995-2009**

Rank Program
(click for top recipients, payment   concentration and regional rankings)

Number   of Recipients
1995-2009

Subsidy   Total
1995-2009

1

Cotton Subsidies**

2,816

$1,024,978,292

2

Wheat Subsidies**

2,128

$104,228,951

3

Env. Quality   Incentive Program

1,927

$87,958,056

4

Disaster Payments

6,026

$80,961,736

5

Corn Subsidies**

1,128

$35,562,487

6

Dairy Program   Subsidies

224

$24,732,113

7

Livestock Subsidies

5,076

$24,514,335

8

Barley Subsidies**

1,576

$10,813,621

9

Sorghum Subsidies**

1,355

$5,943,570

10

Wool Subsidies

5,848

$2,715,655

** Crop totals are an estimate. In the data received by EWG for 2009, USDA does not differentiate Direct Payments or Counter-Cyclical Payments by crop as in previous years. EWG allocated the region’s Direct Payments by crop for the 2009 calendar year using the proportion of that crop’s Direct Payments in 2008. Number of recipients receiving Direct Payments for that crop was not estimated. Due to the way Counter Cyclical Payments are made – EWG was not able to allocate Counter Cyclical Payments to crops. Also included in the crop totals are the crop insurance premiums as reported by the USDA Risk Management Agency for that crop. The crop insurance premium is the amount of money that is calculated by USDA to make the program actuarially sound. Crop insurance premium subsidies are available at the county, state and national level.

Sources: http://www.nhschoolreform.org/Media%20Kit/EXAMPLE_Charter%20School%20Funding%20in%20Arizona.pdf , http://www.coyoteblog.com/coyote_blog/2005/09/fight_arizona_p.html,

Suggested Website on subsidies

Interactive summary of subsidy in Arizona: http://farm.ewg.org/region.php?fips=04000

Ken Cook’s analysis of agricultural subsidies in the USA: http://farm.ewg.org/summary.php

Farm subsidy primer: http://farm.ewg.org/subsidyprimer.php

Crop insurance: http://farm.ewg.org/cropinsurance.php

What difference do the Coyotes make to Glendale?

Not only do the Coyotes bring a lot of visitors into the City of Glendale, this past season, with admittidly the lowest attendance in the NHL, the total attendance was 663,366 hockey visitors. Those visitors are paying customers, who spend money in Glendale. And as it turns out a lot of money.   That spending turns in to tax revenues, those sales tax revenues in turn run the City of Glendale.

Sales tax revenues make up 41% of the City of Glendale general fund. Currently 2.2% sales tax doen’t seem like much, on a $10 purchase it is only $0.22.,  but the City of Glendale takes that 2.2% and splits it out  .5% goes to public safety (fire and police), .5% goes  to transportsation (dial a ride, and established bus routes) and the balance 1.2% goes to the City of Glendale’s general fund. In 2012 this is estimated to be $51.9 million dollars.

So how does that apply to the Coyotes playing in Glendale. Why would, or should the citizens of Glendale care about the Coyotes, unless they like hockey?  The citizens should care because The Coyotes are the anchor tenant at Westgate city center, named Westgate Sports and Entertainment District.

Don Rienhart, of the Glendale Chamber of Commerce states:

“The Coyotes are critical to the long term success of the Westgate area, both for current businesses and for future business development.  The City would be hard pressed to recoup the tax revenue generated from over 40 annual event nights that would be lost if the team were to leave.”