Daily Archives: August 4, 2009

For the bullet summary, please go here.

Land development seems to be the order of the day for Related Companies, and MSD Capital. And we are not talking small potatoes either. Here are some exerpts and notes of interest to solidify the land development interests of some of the players in the Phoenix Coyotes case. Take from it what you will.

The New York Times reported the Related Company wooing of the Mayor of New York in 2006:

The proposal — a commercial complex that would rival Rockefeller Center in scope — is sprawling, expensive and fraught with political consequences. But after years of discussions between the developers and the owners of Madison Square Garden, the specifics are finally emerging.

On Tuesday, the developers — Steven Roth of Vornado Realty and his partners at the Related Companies — sought to convince Mayor Michael R. Bloomberg that moving the Garden one block west to Ninth Avenue would open up a historic opportunity to transform a dowdy and claustrophobic transit hub, overhaul an important corner of the city and generate tens of millions of dollars in tax revenues.

And in December 2007, Seeking Alpha reported:

Goldman Sachs (GS), Abu Dhabi’s ever-expanding investment arm and others have agreed to invest $1.4 billion into privately-held Related Cos., a deal that will allow it to continue investing despite today’s less borrower-friendly climate. The deal, expected to be announced today, includes about $400 million from Goldman and Michael Dell’s investment firm MSD Capital, giving them a 7.5% stake in Related. Abu Dhabi and Saudi company Olayan Group will invest about $1 billion, sources told the Wall Street Journal.

And further in the article:

Together with Vornado Realty (VNO), it runs a $14 billion project in downtown NYC which involves building two train terminals and a new Madison Square Garden.

The bigger project did not fly with a moved Madison Square Garden. 

Artist rendering of the new and improved MSG

And, if you think luxury boxes are special, wait till you see the supersuite! :

The “supersuite” will be the size of 10 suites and can be broken down into smaller rooms if necessary.

 At the end of the day, this is the reality, with the other projects put on hold, the priority is the renovation of the MSG:

The renovation of the nation’s busiest arena will take a year longer than planned — the upper level won’t be finished until the beginning of the NBA and NHL’s 2012-2013 season — and will go over its $500 million budget, MSG Vice Chairman Hank Ratner said.

But, “we’re not going to be looking for anyone else to pay for it,” Ratner said.

The city and state have committed hundreds of millions in bonds and other incentives to the Yankees and Mets’ new stadiums and a planned arena for the New Jersey Nets.

Interesting choice of words….maybe the City has learned that the bond issues and the promise of ‘buy now, pay later’ is not necessarily the best choice. If Related had their way, would the financing have been in the same type of sales tax related land development subsidies? Perhaps it will be of interest in future posts to look at the details of the Yankees, and Mets stadiums and the planned arena for the Nets.

Related Companies did not realize their original proposal that would have been huge:

Following rejection, an alternate plan, known as Plan B, was developed by Manhattan Borough President Scott Stringer (D-Manhattan), then-candidate for Governor Eliot Spitzer (D-New York), New York State Assembly Speaker Sheldon Silver (D-New York), and the Moynihan Station Venture – a collaboration between private developers Vornado Realty Trust and The Related Companies. Plan B laid out a significantly expanded vision. At a total cost of $14 billion, Plan B proposed relocating MSG to the Farley Post Office and replacing the existing MSG with a renovated Penn Station and several office buildings. The massive scope and scale of the project, combined with rising construction costs and a weakening credit market, inhibited progress on the proposed project.

 While Related Companies didn’t get their way in the MSG and area development, it was not without trying.

On July 31st, it was announced that MSG would break away from the owner, Cablevision parent. I wonder what the new deal will be as a tax incentive to the cablevision shareholders.

The old deal, as reported in 2007 saw:

MSG’s owners, Charles Dolan and his son, Jim, haven’t had to pay property taxes on the famed arena since 1982 – an exemption that’s now worth $11 million a year.

 

As shown in the ‘old deal’ article, there were the folks that were against tax subsidies to the rich owners of the arena, and I am sure whatever deal the Dolan family has now, it will be just as lucrative.

The difference between MSG and Jobing.com arenas are miles apart. I am sure 72% of taxpayers don’t argue with the deals for MSG. But 72% do argue in Glendale. And that is the important point.

For the bullet summary, please go here.

Wow!

I sit in reflection of the Phoenix New Times article of August 3rd, and I can’t help but think, ‘Yes, finally some dog gone, drag out, get to the bottom of it reporting!’

Well, actually, the first time I was impressed with the PNT reporting was on the excellent article about the CityNorth Phoenix land development subsidies, that basically proved that  a City can act just as  irresponsibly as the average household. Buy now, and prepare to pay large later. The only sure gainers in that game are the lenders and land developers. Easy money for the rich, on the backsides of the middle and lower income earners. And, it  makes you wonder how in the heck these deals could happen. Who negotiates these lucrative opportunities, and why?  At least we can take comfort in learning that the land barons lost their appeal in the Supreme Court.

The passengers on this train aren't getting off until the journey is done

Have you ever wondered how some people are able to ‘carry on’ their less than ethical ways and not get stopped?

 You know the scenario. We have an expression for some people. We like to call them ‘Teflon Tims’. They seem to do things that are less than noble, time and again, and just don’t seem to have to pay the piper. We wait, in patience, or sometimes impatiently, for those people to ‘finally get theirs!’ Until then, the ramifications of their actions seem to fall away, like food on a teflon fry pan. Swoosh… gone as if it was never there. No consequences. No exposure.

When Jerry Moyes put the Phoenix Coyotes in Chapter 11, and found Jim Balsillie to buy the team and satisfy his needs, it could have been a non-eventful process. Kind of like when the Montreal Canadiens seemlessly changed hands over the past little while. Blink, and you might have missed it. Wow! It could be that easy?

Over the past while, strange things have occured. Ponzi schemes by the handful exposed. Corporations exposed for less than ethical behaviour or accounting practices. The economy a facade,  to fall on a far grimmer reality. And now, the NHL.

Is it just me, or is ’strange’ becoming the new normal?  With wierd uncoverings of truths. The Teflon Tims losing their lustre, and having to face the past, and their demons.

What’s incredibly interesting in the current Coyotes case  is that there are so many ‘Tims,‘ all coming at once to face the music . Each one having a role to play in this saga, but each  having to face their own realities.

 Absolutely fascinating stuff!

It makes you hope the experience will teach each of them a valuable lesson. It makes you wonder if the experience will be ‘life altering’?

Who would have known a simple auction process in a bankruptcy court would be the root of such human drama?

How will Gary Bettman surface from the rubble of the exposure that is taking place regarding the NHL’s potential collusion with the City of Glendale, and the ‘friends of Glendale’? How will it look on the NHL when they seem to have more contact and compassion for everyone else but the current owner Jerry Moyes? With all the mudslinging, how will it look should Jim Balsillie be awarded the team, and Gary Bettman will have to now work with Balsillie as a new owner? Has Gary Bettman crossed the line, and committed himself too far, and made it too obvious that he has a personal dislike for Balsillie? How will he account for the ‘uniqueness’ of each team’s financial position? Will he be able to come clean? With profit sharing issues and the arena subsidies, how will he appease those teams upset by the reality proven by this fiasco? Subsidizing a team that thrives on all kinds of subsidies to survive? Many questions to be answered and faced.

How about Jerry Reinsorf ? How will he explain the relationship with John Kaites, and in turn Ed Beasley, and the obvious advantage it has with the negotiations with the City of Glendale? And, the advantage he has with son Michael, who already works closely with the City, in several key capacities. No matter what happens, a succesful acquiring of the Coyotes will be tainted by accusations of favoritism and unfair advantage. It would seem a situation of networking at it’s finest. A man that was voted the ‘most networked’ in Chicago. Will it be viewed as a man strategically using influence to get what he wants?

What of Michael Dell? If he works a deal to renegotiate the SOF debt, will he be looked at as the man that didn’t do Jerry Moyes any favors, but because of his land development strategies in Arizona, and the contacts surrounding Glendale, that he would favour a fellow friend, instead of compassion for one not in the close knit business group? What of his decision to become a shareholder of Related Companies, involved in CityNorth, and the land development subsidies? How will this be looked upon by the taxpayers of Arizona?

 How about Ed Beasley, the City Manager of Glendale? As pointed out in the Phoenix New Times article, his apparent favoritism towards John Kaites? It makes you wonder as a public official if he should be holding close friendships of this nature with clients of the City. How will Glendale residents view his character for the role he is playing in the apparent collusion with the Reinsdorf/Kaites group? How will this affect any liability he could expose the City to should Jerry Moyes take civil action for damages?

For other officials at the City of Glendale involved in this process, and voted in by residents and taxpayers. How will they appear when the deceptions are brought to the surface? So many secrets and delays for a City accountable to the people. Will there be a public outcry and protest?

And John Kaites? A man that has networked and befriended his way to where he is today. A lawyer with roots in Phoenix. After this mess is over, who will have confidence in his ability and feel confident of his ethics? His slip up that the City was negotiating with the ‘robust group’ he represented for at least six months leading to the bankruptcy was a royal blunder.

As pointed out bluntly by the Phoenix New Times, the whole situation simply ‘smells’! There is no better way to describe it. All the players in this game are going to have to answer for their roles, one way or another. Either now, or sometime in the future, the events surrounding their role in this fiasco will be taken into account. That much I’m sure.

Even the Daryl Jones group is suspect because of relationships as described in previous articles. Can anyone that is pulled from the NHL hat be trusted, or do we simply need to overturn some rocks to find a connection?

We could go on and on. The point is that many will have to face their own shortcomings, seemingly at the same time, due to the same circumstances.

They could have missed this train, if only the sale of the Phoenix Coyotes went as uneventfully as that of the Montreal Canadiens. It was not meant to be.

No, this train of fate, left the station with many passengers. As if the ‘Final Destination’ to face their demons awaited them on this journey.

It would seem the ride will have to play itself out. The fate train has left the station, and won’t stop until the journey comes to it’s logical end. Until the demons are faced. Until it pulls into the next station.

What will the new lanscape be like?  What will be the life altering lessons learned on this journey?

For the bullet summary, please go here.

Wow!

I sit in reflection of the Phoenix New Times article of August 3rd, and I can’t help but think, ‘Yes, finally some dog gone, drag out, get to the bottom of it reporting!’

Well, actually, the first time I was impressed with the PNT reporting was on the excellent article about the CityNorth Phoenix land development subsidies, that basically proved that  a City can act just as  irresponsibly as the average household. Buy now, and prepare to pay large later. The only sure gainers in that game are the lenders and land developers. Easy money for the rich, on the backsides of the middle and lower income earners. And, it  makes you wonder how in the heck these deals could happen. Who negotiates these lucrative opportunities, and why?  At least we can take comfort in learning that the land barons lost their appeal in the Supreme Court.

The passengers on this train aren't getting off until the journey is done

Have you ever wondered how some people are able to ‘carry on’ their less than ethical ways and not get stopped?

 You know the scenario. We have an expression for some people. We like to call them ‘Teflon Tims’. They seem to do things that are less than noble, time and again, and just don’t seem to have to pay the piper. We wait, in patience, or sometimes impatiently, for those people to ‘finally get theirs!’ Until then, the ramifications of their actions seem to fall away, like food on a teflon fry pan. Swoosh… gone as if it was never there. No consequences. No exposure.

When Jerry Moyes put the Phoenix Coyotes in Chapter 11, and found Jim Balsillie to buy the team and satisfy his needs, it could have been a non-eventful process. Kind of like when the Montreal Canadiens seemlessly changed hands over the past little while. Blink, and you might have missed it. Wow! It could be that easy?

Over the past while, strange things have occured. Ponzi schemes by the handful exposed. Corporations exposed for less than ethical behaviour or accounting practices. The economy a facade,  to fall on a far grimmer reality. And now, the NHL.

Is it just me, or is ’strange’ becoming the new normal?  With wierd uncoverings of truths. The Teflon Tims losing their lustre, and having to face the past, and their demons.

What’s incredibly interesting in the current Coyotes case  is that there are so many ‘Tims,‘ all coming at once to face the music . Each one having a role to play in this saga, but each  having to face their own realities.

 Absolutely fascinating stuff!

It makes you hope the experience will teach each of them a valuable lesson. It makes you wonder if the experience will be ‘life altering’?

Who would have known a simple auction process in a bankruptcy court would be the root of such human drama?

How will Gary Bettman surface from the rubble of the exposure that is taking place regarding the NHL’s potential collusion with the City of Glendale, and the ‘friends of Glendale’? How will it look on the NHL when they seem to have more contact and compassion for everyone else but the current owner Jerry Moyes? With all the mudslinging, how will it look should Jim Balsillie be awarded the team, and Gary Bettman will have to now work with Balsillie as a new owner? Has Gary Bettman crossed the line, and committed himself too far, and made it too obvious that he has a personal dislike for Balsillie? How will he account for the ‘uniqueness’ of each team’s financial position? Will he be able to come clean? With profit sharing issues and the arena subsidies, how will he appease those teams upset by the reality proven by this fiasco? Subsidizing a team that thrives on all kinds of subsidies to survive? Many questions to be answered and faced.

How about Jerry Reinsorf ? How will he explain the relationship with John Kaites, and in turn Ed Beasley, and the obvious advantage it has with the negotiations with the City of Glendale? And, the advantage he has with son Michael, who already works closely with the City, in several key capacities. No matter what happens, a succesful acquiring of the Coyotes will be tainted by accusations of favoritism and unfair advantage. It would seem a situation of networking at it’s finest. A man that was voted the ‘most networked’ in Chicago. Will it be viewed as a man strategically using influence to get what he wants?

What of Michael Dell? If he works a deal to renegotiate the SOF debt, will he be looked at as the man that didn’t do Jerry Moyes any favors, but because of his land development strategies in Arizona, and the contacts surrounding Glendale, that he would favour a fellow friend, instead of compassion for one not in the close knit business group? What of his decision to become a shareholder of Related Companies, involved in CityNorth, and the land development subsidies? How will this be looked upon by the taxpayers of Arizona?

 How about Ed Beasley, the City Manager of Glendale? As pointed out in the Phoenix New Times article, his apparent favoritism towards John Kaites? It makes you wonder as a public official if he should be holding close friendships of this nature with clients of the City. How will Glendale residents view his character for the role he is playing in the apparent collusion with the Reinsdorf/Kaites group? How will this affect any liability he could expose the City to should Jerry Moyes take civil action for damages?

For other officials at the City of Glendale involved in this process, and voted in by residents and taxpayers. How will they appear when the deceptions are brought to the surface? So many secrets and delays for a City accountable to the people. Will there be a public outcry and protest?

And John Kaites? A man that has networked and befriended his way to where he is today. A lawyer with roots in Phoenix. After this mess is over, who will have confidence in his ability and feel confident of his ethics? His slip up that the City was negotiating with the ‘robust group’ he represented for at least six months leading to the bankruptcy was a royal blunder.

As pointed out bluntly by the Phoenix New Times, the whole situation simply ‘smells’! There is no better way to describe it. All the players in this game are going to have to answer for their roles, one way or another. Either now, or sometime in the future, the events surrounding their role in this fiasco will be taken into account. That much I’m sure.

Even the Daryl Jones group is suspect because of relationships as described in previous articles. Can anyone that is pulled from the NHL hat be trusted, or do we simply need to overturn some rocks to find a connection?

We could go on and on. The point is that many will have to face their own shortcomings, seemingly at the same time, due to the same circumstances.

They could have missed this train, if only the sale of the Phoenix Coyotes went as uneventfully as that of the Montreal Canadiens. It was not meant to be.

No, this train of fate, left the station with many passengers. As if the ‘Final Destination’ to face their demons awaited them on this journey.

It would seem the ride will have to play itself out. The fate train has left the station, and won’t stop until the journey comes to it’s logical end. Until the demons are faced. Until it pulls into the next station.

What will the new lanscape be like?  What will be the life altering lessons learned on this journey?