Build It and They Will Come
The Arizona Sports bandwagon was traveling at full throttle during a 10-day period in early January.
It seemed as if almost every Valley resident had suddenly caught hockey fever. And for those who had not yet caught the bug, local television anchors, as well as an editorial in The Arizona Republic, reminded them that they should come out and support their beloved Phoenix Coyotes, an 8-year-old team with one of the lowest attendance records in the National Hockey League.
After all, one of their own, a New Englander named Brian Boucher, was on the brink of setting the record for most consecutive shutouts by a goaltender in modern-day hockey history.
The fact that Boucher was about to set the record less than two weeks after the team moved into the brand-new Glendale Arena – a state-of-the-art facility that came to life only after numerous failed attempts to build an arena in Scottsdale – made the moment that much sweeter for team minority owner and Valley developer Steve Ellman.
After all, it appeared to support the argument that he and other franchise owners have been making for years: that brand-new, tax-funded sporting venues are the first step in producing successful teams. Not to mention a spark plug for creating commercial development in the surrounding area.
But the bandwagon came to a screeching halt shortly after Boucher set the record with five straight shutouts on Jan. 9 against the Minnesota Wind in St. Paul. After more than 18,000 people crammed into the 17,799-capacity arena to welcome the Coyotes home on Jan. 11 -applauding respectfully as Boucher allowed one goal to slip by him in a 1-1 tie against the Atlanta Thrashers – attendance started dropping faster than a hockey puck during a face-off.
With the exception of sellout games against the Detroit Red Wings and Colorado Avalanche, two teams with a large fan base in the Valley, the arena was operating at less than 85% capacity as the Coyotes settled comfortably at the bottom of the standings, racking up a painful 15-game winless streak in the process.
But Glendale and Coyotes officials remained optimistic. They still had Westgate, a 223-acre entertainment village, being built by Ellman outside the arena as part of the deal he made with the city after it contributed $180 million toward the $220 million venue. Westgate is being hailed as a city within a city, a 6.5 million-square-foot playground that will finally establish a spot on the map for the West Valley – a region that was once considered the metro area’s ugly duckling, mired in stereotypes of poverty and crime.
The first phase of the project aims for completion by summer 2005 and will include a 20-screen multiplex cinema and several upscale restaurants. The entire project should be finished within ten years and will include offices, hotels, loft apartments and various stages for entertainment acts.
“It’s going to be very similar to Kierland Commons [in Scottsdale] but on a much larger scale,” says Jeffrey Hecht, director of public affairs for The Ellman Companies. (Steve Ellman was not available for comment for this story.) “It’s a very unique project not just for the West Valley, but for now the entire Valley. Really for the entire United States.”
Joining the Coyotes on their new stomping grounds will be the Arizona Cardinals, another franchise with a history of low attendance and lackluster play. The $370 million football stadium, which is being constructed about a quarter-mile south of the arena, will open in 2006.
Do the math – $590 million is a lot to spend on two losing sports clubs.
But Glendale officials are looking past that and ahead to the dollar signs they see in the city’s future. Case in point, they’re already watching property values in the surrounding area increase.
Glendale is primed to compete for the almighty sports and entertainment dollar against downtown Phoenix which lost the Coyotes last year and failed in its bid to build the Cardinals stadium in 2002.
“We believe competition is a good thing for the consumer,” says Glendale spokeswoman Julie Frisoni. “Anyway, we’ll be very different. Downtown Phoenix is mainly a daytime place. We’re hoping our place will come alive at night.”
Bring it on, says longtime Valley sports magnate and downtown developer Jerry Colangelo, who has been a fixture on the local sports scene since 1968, when the then 28-year old was hired as general manager of the NBA expansion team the Phoenix Suns.
“There is no competition,” he says of Glendale. “One is a startup, the other is an established downtown.” Colangelo believes it will be a long time before the West Valley is capable of going head-to-head with downtown Phoenix.
“The West Valley is a new player,” he says. “Its outcome is yet to be determined. You crawl before you walk, and you walk before you run.”
But Colangelo, who jumpstarted downtown Phoenix’s redevelopment by building America West Arena, Bank One Ballpark and the Dodge Theatre, is slowly relinquishing his hold on the Arizona Diamondbacks, Phoenix Suns, Phoenix Mercury and Arizona Rattlers, leaving the future of the downtown Phoenix sports scene uncertain.
To avoid leaving his children with a whopping 48% estate tax upon inheritance, Jerry Colangelo sold his stake in the Suns for $401 million in April to Tucson native and San Diego entrepreneur Robert Sarver. “it’s something I have to consider. At 64, you come to realize that you’re not going to be around forever,” Colangelo says.
One of those children is, of course, Bryan Colangelo, 38, who was general manager and president of the Suns, and will remain a managing partner of the team for at least the next three years when the deal is finalized. But if the junior Colangelo is worried about his own future, he doesn’t show it. “if we have a successful basketball team, which I anticipate we will have, I will be around much longer than three years,” he says.
Nevertheless, Jerry Colangelo will continue to be a driving force in the redevelopment of downtown Phoenix. The Chicago native and self-described urbanite is a member of Phoenix Futures, a coalition of Valley business leaders who have hired architectural development firm Jerde Partnership of Venice, California, to help transform downtown into the bustling core it so wants to be. The goal? To turn downtown Phoenix into a pedestrian friendly haven of restaurants, clubs, stores and residences within 10 years.
And Colangelo believes sports will continue to play a vital role in this transition, naming sporting events as the main draw in attracting people to downtown. “There is no question about it,” he says. ‘You need to have a base. The venues and events are our base.”
A plan has not yet been drafted, Colangelo explains, because Phoenix Futures is still receiving input from various societal segments of downtown Phoenix, including artists and small business owners.
But Jerde Partnership , which revamped segments of downtown San Diego, Las Vegas, and Orlando, FL, prides itself on urban “experiences” that spark entertainment and retail development.
Not much different from what Westgate promises to offer.
Jerry and Bryan Colangelo are also in the process of renovating America West Arena, a $70 million project that should make the 12-year-old venue more competitive against Glendale Arena in booking concert shows.
“We’re bringing this building into the 21st century,” Bryan Colangelo says from his office at America West Arena. “At the end of the day, this will be a new arena.”
Glendale Arena, which opened in December, already has hosted Brittany Spears, Rod Stewart and Prince, artists who would normally have played at America West Arena or the Dodge Theatre.
But despite the loss of the Coyotes and other events, the Colangelos say the Glendale Arena has not cost them a significant loss of revenue.
“[The Coyotes] had a low rent lease,” Jerry Colangelo says. “There was a big hassle with scheduling. Any loss of revenue can be replaced by a handful of dates [events]”
The Coyotes are not shedding any tears either, saying their attendance has risen since leaving America West Arena.
“Even though the team hasn’t played well, we’re far outpacing what we did at America West,” reports Doug Moss, president and chief operating officer of the Coyotes. “Here, you can see both goals. Over there, 4,400 people couldn’t see both goals because there was an obstructed view.”
The real losers are the downtown merchants and the city of Phoenix, who stand to forfeit $756,000 per year in sales tax from the departure of the Coyotes and other events that would normally be held downtown.
“Losing the hockey team hurt us,” says A.J. Sulka, 32, minority owner of Majerle’s Sports Grill in downtown. “We’re talking 40 to 60 home games where there’s 10,000 to 15,000 people walking the streets.”
John Meloy, 27, a bartender at Chuy’s Mesquite Grill, on Washington Avenue, agrees. “Our night business is pretty dependent on downtown events,” he says.
But Meloy, who was raised in the West Valley and owns a home in Glendale is ecstatic that the Coyotes have moved to his neck of the woods. And not just because of increasing property values.
“It’s about time we got something out there,” he says. “We used to have to drive all the way to Tempe or Scottsdale if we wanted to go out and have fun.”
WINNERS AND LOSERS
The West Valley sports-development trend began in earnest in 1994, when Peoria opened up the Peoria Sports Complex. The state-of-the-art baseball stadium, home to the San Diego Padres and Seattle Mariners during Cactus League spring training, sparked the development of several restaurants, bars and hotels in the area.
“At the time when we built that complex, you could stand at that site and not see anything for two miles,” remembers J.P. de la Montainge, Peoria community services director and president of the Cactus League Association.
A recent survey indicated that 70% of the fans attending Mariners games and 50% attended Padres games come from out of state, de la Montaigne says. That’s actually good news. “They are renting hotel rooms, they are renting cars, they are eating at our restaurants,” he says.
The Peoria complex paved the way for other teams who have long favored the East Valley or Florida’s Grapefruit League, into relocating to the West Valley for spring training, giving the region a much larger chunk of the $200 million generated each year by the 12 teams who play in the Cactus League.
A new complex in Sunrise enabled the city, in 2003, to lure the Kansas City Royals and Texas Rangers away from Florida, which until then hosted twice as many teams as Arizona. And a new complex in Maryvale prompted the Milwaukee Brewers to move west from Chandler in 1998.
Adding to this shift in dynamics is Anaheim Angels owner and West Valley developer Arte Moreno, who plans to build a stadium in Goodyear to relocate his team from Tempe after his lease at Diablo Stadium expires in 2006.
Although the new West Valley stadiums are sure to generate sales tax dollars and spark retail development in the area, downtown Phoenix merchants say teams need to be successful in order to really cash in.
“When the teams lose, we lose,” Meloy says on a recent Saturday night, after the Phoenix Suns were trounced by the San Antonio Spurs and only a handful of customers sat at Chuy’s Mesquite Grill.
Sulka says one of Majerle’s most successful years was during the 1993 basketball season, in which Charles Barkley led the team to the NBA finals. Ditto for 2001, when the Diamondbacks won the World Series.
“The World Series was insane,” he recalls.
But to the dismay of downtown businesses, the Diamondbacks failed to make the playoffs last season and the Suns, like the Coyote, are at the bottom of the standings.
And in Tempe, where the Cardinals have made only one playoff appearance since moving to the Valley in 1998, merchants are more dependent on fans supporting the visiting team for post game business.
“We probably had four or five games this season that added 50% to our sales,” says Julian Wright, manager of the Library Bar and Grill on Mill Avenue, which sits right down the street from Sun Devil Stadium, where the Cardinals will play until 2005. “And those were from people who were going for the other team.”
For Tempe, the largest blow to its cash till will be losing the Fiesta Bowl to Glendale. Wright says his bar made about the same amount of sales during the one week of the Fiesta Bowl as the entire football season. Adds Marc Huon, manager of Hooters on Mill Avenue: “We were so busy during the Fiesta Bowl, we kept a semi truck in the parking lot as a freezer to store our food.”
That explains why Glendale officials are confident they will be doing a victory dance even if the Coyotes and Cardinals continue their losing ways. After all, in 2007 they will begin hosting the annual Fiesta Bowl – the last tow games of which pumped more than $400 million into the local economy. Glendale also will be home to the 2008 Superbowl, a game that brought in an estimated $300 million to the city of Houston this year.
“That will be Glendale’s time to shine,” Frisoni says. “this is an opportunity that the city has been waiting a long time for. We won’t let people down.”
The Glendale Arena also expects to host the National Hockey League All-Star game in 2006, bringing in yet more money. Furthermore, both venues are designed for multipurpose events which means they will host concerts, circuses and conventions throughout the year. Not a bad plan considering the NHL will likely lock outs its players next season to control costs, a move that would eliminate all 40 home games.
“The strike was taken into account because they’ve been talking about it for years,” Frisoni says. “The arena was designed to be booked 150 times a year.” Glendale predicts it will reap between $300 million and $500 million over 30 years in sales tax from its $180 million investment – even if Arizona’s fickle fans fail to come out in droves to support the teams.
After all, they’ll always have Westgate.
“Regardless of the Coyotes’ record, we think this is a project that will stand on its own merit and attract people on its own merit,” says Hecht, spokesman for The Ellman Companies. “That said, we’d love to hoist the Stanley Cup in the middle of Westgate.”