Gila River Arena, Glendale, Ariz.
AEG Facilities won the right to negotiate a contract to manage Gila River Arena for the city of Glendale, Ariz., based on its success and track record handling destination management as much as anything.
Glendale’s Tom Duensing, assistant city manager, said the Feb. 3 announcement that AEG Facilities has been chosen over SMG and Spectra, the latter of which currently manages the arena for the Phoenix Coyotes Arizona Ice Management arm, was a very tough call. He had nothing but praise for all of the potential partners. “AEG has a tendency to look at the entire area,” he said of their management style. “We feel they can best engage the Cardinals, Westgate Entertainment District retail and restaurants and other properties in the West part of the Valley,” Duensing said.
The city is hopeful the contract with AEG Facilities will result in further development in the area around Gila River Arena, which is located in a suburb of Phoenix, and will stimulate construction on vacant property in the area. “AEG is a brick and mortar company,” Duensing said.
The agreement reached is a notice of intent to award the contract for professional management of Gila River Arena to AEG Facilities. Negotiations will now proceed with a likely resolution in the next 60 days. There are a lot of moving parts and no guarantee the negotiations will be successful, but Duensing and Chuck Steedman, COO of AEG, were optimistic.
The transition would take place July 1. The Coyotes National Hockey League team would continue to manage the arena, which is subcontracted to Spectra, for another year should negotiations fail. The Coyotes are contracturally obligated to remain in the arena through June 30, 2017, no matter what. The goal would be for AEG Facilities to negotiate a new lease with the Coyotes after they have completed their own contract.
It is a full management deal, Steedman said of AEG Facilities’ commitment, likening it to Sprint Center, Kansas City, Mo., and KFC Yum! Center in Louisville, Ky., both under management deals.
AEG knows the market well, Steedman said, having had a booking agreement with previous Coyotes ownership from 2006-2009. “We think it’s a great market and a great building,” Steedman said. “There is competition, certainly, but with Westgate Village adjacent, it’s like Staples Center and L.A. Live.
Monty Jones Jr., GM at Gila River Arena for Spectra, who was reached while attending the Pollstar convention in San Francisco, concurred it is a great market. For his part, it is business as usual as he continues to book the arena. The coming year looks as strong as 2015 with 14 major concerts in the offing.
Steedman noted Phoenix “brackets well” with other AEG Facilities venues, from San Antonio to Kansas City, Las Vegas to San Diego.
Besides destination marketing and development, Glendale is looking for cost certainty, Duensing added. Whether that will be a cap on the cost to the city or a management fee where the city bears the risk is to be determined, but Glendale is definitely interested in capping expenses. It is also very important to keep the Coyotes, he said. Both the city and AEG have had some productive discussions with team owners, he added.
“We’re really excited,” Duensing said, adding that Spectra has been fantastic and continues to be very professional in selling Gila River Arena.
Interviewed for this story: Ted Duensing, (623) 930-2870; Chuck Steedman, (213) 763-5446; Monty Jones Jr., (623) 772-3200