Audit Says Ex-Facility Manager Shorted City

An audit released by the city of Glendale, Ariz., July 7 shows it was shorted as much as $312,000 in surcharges, naming rights and other fees in the final fiscal year of IceArizona management of

Gila River Arena
Paul Kucher
– Gila River Arena

The city released IceArizona, also the former owners of the NHL’s Arizona Coyotes, from a 15-year facility management deal in 2015 and subsequently contracted AEG to operate the 18,928-capacity venue. In coming to settlement, the city and IceArizona mutually agreed to release all claims against each other, according to the Glendale Star.

The shortages weren’t the only problem. The audit also showed that in fiscal 2014-15, the city paid IceArizona $15 million to manage the facility for two fiscal years, 2014 and 2015, but received only $5,580,073 and $6,598,360 in revenue for the respective years, for a combined loss of $17,821,567, according to the paper.

The audit reportedly also said that 32 percent of all surcharge fees that were to be paid quarterly to the city by IceArizona were late in 2014, and 10 percent were late the following year.

“As part of the city’s negotiation to remove arena responsibilities from the Coyotes, all claims against either party were agreed to,” City Manager Kevin Phelps told the Star. “Thus, the Coyotes agreed not to litigate or make claims against the city for the cancellation of the management agreement and the city agreed that all terms and conditions of the prior agreement had been settled.

“In that both parties had potential claims against the other that would likely be expensive to litigate, both parties agreed mutually to essentially hold each other harmless going forward.”

As part of the settlement, the city basically erased any money owed to the city, according to the audit – which also reported the city’s total revenue net loss was more than $4.7 million from 2010-16.