Renaissance, Glendale working toward compromise
Here’s a quick update on negotiations between the City of Glendale and Renaissance Sports and Entertainment:
Council member Gary Sherwood went on FOX 910 AM Wednesday and said the city is looking for some cost certainty from RSE in the form of guaranteed revenue.
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While initial concerns were that the city wanted all of the revenue streams RSE included in its proposal to be guaranteed, which would have removed all risk from the city and likely killed the deal, the two sides are working on a compromise that would put about $1.3 million from a ticket surcharge in an escrow account.
The idea is simple. In an effort to guarantee the city receives $8.5 million back in annual revenue after it pays RSE $15 million to manage the arena (the city already has $6 million budgeted for arena management), the account would be applied toward the revenue shortages. If there are no shortages, Glendale does not keep the money.
RSE believes that conservative revenue estimates already will bring the city about $8.5 million a year, with projections ranging as high as $10 million or $11 million. But the account would serve to calm any fears Glendale has about the risk it is undertaking.
Glendale already receives roughly $5 million in revenue from current surcharges and the rent the team pays for Jobing.com Arena. If you add in the $1.3 million from escrow, and consider that RSE has offered about a half dozen other revenue streams to Glendale in the proposal, achieving the additional $2.2 million to reach $8.5 million would seem simple.
The two sides sides are currently working through the details in anticipation of Friday’s Glendale city council executive session, where the full proposal will be discussed again, making the next 24 hours crucial to this deal.
There is optimism from both sides that this compromise will finalize the deal, but it would still require approval from the council which may still have reservations. If the council can agree after Friday’s session, Sherwood said previously that the hope is to get deal points posted for public viewing either Friday or Monday. That would allow time for public discussion and leave open the possibility of a vote on either June 28 or July 2.
The NHL has made it clear that it needs to see progress by next week or it could pursue Plan B, which could be relocation to Seattle. The NHL’s Board of Governors meets on June 28, but given the time frame for a council vote, the league would not be able to approve the sale on that date.
NHL deputy commissioner Bill Daly previously told Sherwood that the league would be OK with a vote in early July if it was clear the deal was going to be approved.
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