The city of Glendale is taking yet another direction in the management of Gila River Arena, signing industry powerhouse AEG Facilities to run the facility with two express goals: bring more concerts to the venue and keep the Arizona Coyotes (NHL) as a tenant.
The deal: five years, $28 million.
It’s no secret the Coyotes have been searching for a new home, as Glendale is on the opposite side of the Valley from the perceived money and sponsorship centers. And while there have been rumors aplenty — A new arena in Scottsdale! A new downtown Phoenix arena to be shared with the Suns! A new Tempe arena to be shared with the Arizona State hockey team! — the team hasn’t been able to pull the trigger on any deal. So, at last for the short term, the Coyotes need Glendale, and Glendale wants the Coyotes. At least through the end of next season, when the team’s lease ends. From the Arizona Republic:
Speaking to reporters before the council vote, AEG Facilities Chief Operating Officer Charles Steedman said he is acting under the presumption that the Coyotes will remain at the arena, where they have struggled to draw crowds.
“We’ve never looked at a scenario without the Coyotes,” he said….
The new deal splits the first $3 million in profit from the arena equally between AEG Facilities and the city. Beyond that, AEG Facilities will receive a 75 percent share, while Glendale will receive a 25 percent share.
The contract eliminates a complicated set of revenue reimbursements the city had with the Coyotes for naming rights, parking and other revenue sources. According to the new contract, all future revenue would be lumped together for the 75/25 split.
AEG is both a facilities manager and a team owner; AEG owns the Los Angeles Kings (NHL).
While the Coyotes have not been a success, the arena has been a mixed bag for the city. On the one hand, it’s been a continual money drain on city finances. On the other hand, it has spurred commercial development in the Westgate area, and there’s certainly potential for more in the arena area.
