For the bullet summary, please go here.
Competing Companies. Competing Ideas. Competing viewpoints.
Would you expect competitors to all agree on something, and unanimously work in cooperation?
To think that all the Board of Governors of ‘anything’ would unanimously vote in favor of one idea is almost insane. The reason is unique companies in competition with one another will welcome anything that would give them a ‘differential advantage’ over their competitors. How they view ‘anything’ will vary with personality, and ultimately how they perceive getting a bigger piece of the competition’s pie. We can apply this to almost any business, and I have opportunity to do just that.
Muckety muck, muck, muck!
It’s actually quite fun to use Muckety maps (http://www.muckety.com).
Today, I got a visit from a company called Macerich. Well, I just had to stir up some more ‘muck’ so I decided to see what they are all about. It’s no coincidence a lot of times when someone hits a specific webpage on this site now. Just like there is no coincidence in the relationships surrounding the group in Glendale all toeing the line to get a piece of the development pie. Probably would explain why the City of Glendale visited our site today, as did MSD Capital of New York. MSD first, if that is of any consequence. Suffice it to say, something’s up in the state of Arizona these days.
Well, we mentioned Alan Leventhal a while back. You might recall he (his company) was called in by Michael Reinsdorf to give advice to the City of Glendale on the Jobing.com arena operations. His company involved there was Beacon Sports. This was a month before Jerry Moyes declared the team bankrupt.
Well, as I explained as well, Leventhal also owns Beacon Capital, specializing in REIT’s (Real Estate Investment Trusts).
I also suggested that Leventhal is likely not only a friend of Glendale, but also a friend of Michael Dell at MSD Capital. Why that may be more true now than ever can be explained perhaps, by the visit from Macerich today. In fact, it is downright, blooming funny. That is, as in ‘Bloomingdale’s’ type funny.
Everyone knows Bloomingdale’s department store. It’s pretty famous. Let’s just say that it is a premier store that all malls would love to have. Well, hold that thought. Let’s get back to the ‘muckety’ thing.
Macerich is operated by a man named Arthur Coppola. Macerich also acquired in 2002, a property manager for malls by the name of Westcor Partners.
Now, if we look at this muckety map, we can see that Alan Leventhal and Arthur Coppola are both Board of Governors members of the NAREIT (National Association of Real Estate Investment Trusts). Let’s liken that to the Board of Governors member for, say the Toronto Maple Leafs, and another for the Hamilton Tigers (the leagues newest member).
At first glance, we might think, how nice. They must both be friends. Well, that could be true. But think of the NHL Board of Governors. They represent competing teams. They may get along OK, but at the end of the day they are vying for the same prize, the elusive Stanley Cup. So, although they may get along, they have competing agendas. They will not agree on everything. Keep that in mind for later too.
Anyhow, Bloomingdale’s department store was slated to open in Phoenix in the CityNorth development. Of course, that is now on hold due to the court battle, making financing a question. The bigger question is how does tax subsidies, and REIT’s play a role? Are REIT’s involved in development subsidies for shopping malls? Well, I would say they would have to be, because, Westcor runs malls, and Westcor is part of Macerich. Macerich, is a huge REIT company, in direct competition with Beacon Capital (Alan Leventhal).
According to the Arizona Central article in June:
Westcor Vice President David Nelson said the Phoenix mall developer is in almost daily contact with Macy’s and Bloomingdale’s. Most of the Macy’s stores in Arizona are in Westcor malls, and Westcor’s parent, Macerich Co., is a landlord to Bloomingdale’s in other states.
“When the time comes for Bloomingdale’s to enter the market, we would like to see them in one of our existing properties or a new one as the market demands,” Nelson said.
Let’s look at this a step further. Who has been trying to steal Bloomingdale’s away from the CityNorth Development (Related Companies, part owned by MSD Capital)? You got it! Westcor and Macerich.
So, we might as well say it this way. Coppola is trying to take Bloomingdale’s away from Related Companies, and effectively MSD Capital. We have established Leventhal as friends with Michael Reinsdorf, and indirectly connected to MSD Capital through another connection, as shown in this muckety map. Suffice it to suggest Leventhal is leaning to MSD Capital.
Let’s consider the real business again here. It has, will, and for the near future be related to land development, investment in land development, and taxes. That’s it!
So, Leventhal being in the REIT business, friends of Reinsdorf and Dell, would seem to be in competition with the other player in Arizona, Coppola and Macerich.
Macerich showing up on the site today, came to visit the page related to the Coyotes being more about land development subsidies than hockey.
Macerich came there, no doubt for two reasons. One, in concern over what happens should subsidies be affected? And two, to see how the competition is fairing. Fair enough, wouldn’t you agree?
Regardless of why Macerich happened to key in on that particular article, it opened the door to examine another game in Arizona with competition. There are competing developers, investors, and specifically competing REIT companies.
We see two Board of Governor members of the NAREIT, and we can compare that competition to the NHL’s Board of Governors.
Board of Governors for the NAREIT or the NHL have one thing in common. If they operate competing businesses (or teams) they will have differing strategies for success. They will also look to take advantage of opportunity or misfortune of a competitor, as in the case of CityNorth and Bloomingdale’s.
When an idea, opportunity, or anything comes to question (in this case a request for membership of a new owner), they, in all statistical likelihood will not unanimously agree. It would almost be a statistical impossibility given the way they view the marketplace. The reason; they all are looking to win the prize, with unique strategy.
In the case of hockey ownership, you would expect some owners to welcome a team stationed in Southern Ontario. To some teams it may present an advantage. Not to all, but to some.
Just like a competitor comes to a site to see what issues the market holds, or to check up on the competition. No different. If you put 26 businesses in the same room, and gave them free ability to make a choice on a given subject, you would most definitely have several viewpoints. That is, under normal, fair, conditions.
In order to convince all 26 to agree on a given issue, it would have to be in the argument, or the presentation. A presentation that would be bias and unfair.
I would like to close with an important thought. Why would the entire BOG vote against Jim Balsillie? You would think that some would welcome him, and some would not. But unanimous? This to me raises yet another red flag in a long list of red flags.
It just isn’t in keeping with the nature of any Board of Governors. Whether it’s in REIT’s or hockey teams. The principles are the same.
The NHL has been shown to be anything but neutral. No surprise.
It would seem there is the truth, and then there is another ‘truth’ as seen by the NHL and it’s partners.