Dear Mayor Scruggs and City Councilmembers:
As the City considers a deal that will add substantially to its existing financial obligations, at a time when it is overloaded with debt and has had to cut city services and lay off city workers, we hope the Council will carefully consider the following questions:
- What is the actual cost of managing Jobing.com Arena, minus the capital expenses for which the City remains liable under the proposed agreement? If the agreement is challenged under the Gift Clause, a court will look to the difference between actual management costs and the amount the City is obligated to pay to determine whether the agreement is a subsidy. The Council should insist on knowing those numbers so that it can determine whether the agreement is lawful and fair to the taxpayers.
- The City also is giving the arena manager parking rights. In the previous proposed deal with Matthew Hulsizer, the City valued parking rights at approximately $100 million over a specified period, and used those estimates to issue bonds. The Council should be informed of the value of the parking rights that are being transferred and the basis of that value, as part of the assessment of whether the agreement includes an illegal subsidy and is fair to taxpayers.
- We understand that the Tohono O'odham Nation has offered once again to partner with the City to relieve some of the financial obligations related to the arena. We are not aware that there has been any formal analysis of alternative Arena uses or a request for competitive bids for Arena management. We hope that the Council will explore all options before it exposes taxpayers to substantial additional long-term financial obligations.
- We understand the Council is considering adopting the deal as an "emergency" measure, which would deprive Glendale citizens of their right to refer the matter to a vote. As you know, the circumstances justifying an emergency declaration are limited. Given that the City apparently has been negotiating this proposal for quite some time, and the dire financial condition the City is in, denying citizens their right of referral seems inappropriate.
We hope that these inquiries will assist the Council in its deliberations over the proposed deal. We further urge you to not to rush to a vote. The terms of the 100-page proposal were released to the public for the first time on Monday, and not all the exhibits and associated documents have been released yet. There should be an adequate public comment period after all the documents have been released, particularly when they commit substantial public resources over many years.
cc: Craig Tindall, Ed Beasley