This letter from Joe Galli to the editor appeared in today’s Scottsdale Republic. My comments are inserted in bold.
City’s agreement with TPC/PGA Tour an ace
I was disappointed to read Mark Stuart’s recent “My Turn” column related to Scottsdale’s recent TPC course upgrade investment. Stuart’s “facts” on the golf scale of truth were well over par. He alleged taxpayers are getting “fleeced.” The City Council report on the “TPC/ PGA Tour Lease Agreement Amendment” stated the city will commit to fund Stadium Course and clubhouse improvements in 2013-14, with anticipated costs of approximately $15 million.
In turn, the TPC/PGA Tour stipulated they will increase their payment of gross course revenues to Scottsdale from 10 percent to 12.5 percent through 2033, an increase of several hundred thousand dollars.
“Several hundred thousand” of additional revenue on $15 million invested? Sounds like “fleecing” to me!
If Stuart read the City Council report available at ScottsdaleAZ.gov, he would know the $15 million is funded partly by our bed-tax dollars, money collected above normal sales tax on visitors who stay in our resorts and hotels, and partly by the TPC/PGA Tour’s increased gross revenue payments made to Scottsdale through 2033.
No general fund money is used.
Bed-tax dollars are still taxpayer money, as is every penny spent by the city. And it sounds like Galli wants us to double count the increased revenue.
Stuart alleged the TPC as a tenant is contractually responsible for upkeep and capital improvements.
If Joe Galli had read the City Council report he cited above himself, he would see that prior to the most recent amendment, the TPC WAS obligated for upkeep and capital improvements. If the TPC (a division of the Professional Golfers Association) was really a tenant, the city would have positive net cash flow from the ‘lease.’
Cutting the grass and renovating and enlarging a clubhouse are clearly two entirely different obligations.
The city of Scottsdale owns the Stadium Course. TPC is a tenant. The city is entitled, even obligated, to improve its asset. We commend our mayor and council for doing so, so we do not lose our tenant. Mr. Stuart should know that the greatness of the Phoenix Open itself makes it a very real target to be hosted someplace else. Just ask the Phoenicians of the 1970s and early ’80s.
TPC was already committed to the lease payments. Why would they want the Open held somewhere else? And, I think it is important to note that the Open is actually hosted by the Thunderbirds, NOT the TPC. It just happens to be played at the TPC Scottsdale. The Thunderbirds aren’t obligated to hold the tournament at TPCS even AFTER the lease amendment. As to Phoenix, the facilities from which the “Phoenix” Open moved were woefully inadequate for it. There are very few facilities that have what Scottsdale has in the TPCS facility.
Stuart alleged the course is a “financial burden for our city.”
As part of the amended lease agreement, the TPC/PGA Tour also stipulated they will hold a Tour event at the Stadium Course through 2022. Further, the TPC/Tour guaranteed annual broadcast television coverage of the Tour event, of which they have contractual commitments with the NBC/Golf Channel and CBS through 2021.
Joe Galli is either a liar or he is utterly stupid…which of course are not mutually exclusive. The TPC made its commitments with broadcasters before the lease was amended. These commitments were not dependent upon the amendment.
The event’s national TV coverage in January and February when 67 percent of the rest of the country is feet-deep in snow provides an estimated direct benefit of almost $16 million, annually. A financial burden? Really?
Clearly Joe also needs a dictionary, as he doesn’t understand the difference between direct benefits (like lease payments) and indirect benefits (marketing exposure).
In summary, the city took initiative to improve its own asset, and in return its tenant agreed to increase its own rent payment for a period of time to help offset the cost of capital improvements. Additionally, the tenant guaranteed it will host an internationally recognized event, annually for the next decade, viewed by millions on TV and attracting half a million people to our community over a week’s time.
Sounds like a sweet deal for north Scottsdale residents, business owners, the city of Scottsdale — our entire community.
Just like Tiger on TPC’s 16th hole in 1997, the mayor, City Council and city staff knocked this one in the hole with one swing. Hole-in-one! Our business and community members are forever grateful.
Tiger? The jokes just write themselves…so I shall refrain.
Joe Galli is executive director of the North Scottsdale Chamber of Commerce.
I heard a rumor that Joe is going to throw his hat into the ring for Scottsdale City Council. If so, here’s a direct indication of what you can expect from him as a council member: Millions of dollars more in subsidies and clever-but-illogical rationalization for them.