This is ugly. I went and looked at Glendale’s budgets. It’s a good thing I did, because the long post I had mostly written out had some bad assumptions in it. If anyone wants to look at the data, it’s here:

http://www.glendaleaz.com/Budget/AnnualBudgetBooks.cfm

I’m using the FY 2010 Annual Budget Book. I’m looking at the lines for the MPC Bonds – Series 2003A – Arena Tax Exempt, the MPC Bonds – Series 2003B – Arena Taxable, the AMFP Series 14 – Arena, and the AMFP Refunding Series 16 – Arena in the schedule for long term debt. Those look like the bonds I want. The first two series show principal being paid off each year, in addition to interest. The last two, which are much smaller, only show interest, so the principal is lurking in its entirety to be paid off eventually.

First, the $30 million James mentions is payments on the principal, though that’s a little tricky. Anything they paid in interest over those years is in addition to that. The reason I say it’s tricky is that, in the years I looked at, they are only paying about $1.7 million a year in principal. My guess is that the rest of it was on shorter term bonds that are already paid off, but some searching hasn’t helped me find the whole list of debt they took on.

What the schedule shows is that over the coming years, on those lines, Glendale has to make approximately the following payments:

FY 09-10: $1,735,000 principal, $8,050,000 interest
FY 10-11: $1,635,000 principal, $7,397,000 interest
FY 11-12: $1,780,000 principal, $7,944,000 interest
FY 12-13: $1,855,000 principal, $7,885,000 interest
FY 14 & Beyond: $149,135,000 principal, $103,093,000 interest.

That’s kind of an odd amortization schedule, so my guess is that there’s some floating rate stuff in there, which would mean that these are estimates. That’s somewhere between $9 million and $10 million per year until the principal is due on the second two lines of debt.

Keep in mind that this is just the debt service. It looks like there’s an additional $1.5 to $2 million per year, roughly, in operating expenses. ... That means that the city is paying out $11 to $12 million a year on this monstrosity.

It isn’t bringing in nearly that much. The relevant numbers are the same funds as in the operating expenses section, but in the Summary of Revenues by Fund part of the document. These total to about $6 million a year in revenues. This includes arena fees and the sales tax collected at arena events.

In other words, the city has been taking in at least $5 million less every year than it has paid out. Honestly, I’m really wondering whether the city might be better off financially by not making any concessions to a new owner, and just working out a settlement for damages to let the team go. With the numbers being thrown around as to what the Reinsdorf bid wants to make the deal, it wouldn’t take much of an up front cash payment from Ballsillie to have a present value larger than the revenues the city would be left with after making the concessions. Without pulling out a calculator, and just winging it, I wouldn’t be surprised if $100 million would do it, given that we’re talking about $3 to $4 million a year, tops, for about 24 years. That’s without taking into consideration the idea of the city putting up $15 million to cover losses after five years. Looking at these numbers, that’s a complete non-starter. The only thing that is is a fig leaf to keep the city from having to say up front that the team is leaving after that time frame if they are still losing money. There is no way in hell that Glendale will fork over that much when the time comes.

This is nuts. The citizens of Glendale should be marching on City Hall with pitchforks and torches.