Ellman Discloses Key Financials

PHOENIX- The head of a local development firm that plans to build a $557-million mix-used development anchored by an arena for hockey’s Phoenix Coyotes says he expects to put $50 million of his own money into the Scottsdale project and raise another $65 million for the naming rights to the new sports facility.

Developer Steve Ellman of Ellman Cos. made the disclosures as a response to a demand from the city of Scottsdale. Worried about the viability of the project, the city ordered Ellman to provide documents that show he’s got the wherewithal to bring the project to fruition.

The 32-page packet of charts and spreadsheets Ellman sent to the city this week outlines the revenue he expects to reap from the project, as well as how much credit he has lined up. The $65 million Ellman expects to collect from the sale of the naming rights to the arena is nearly identical to the $66 million that Bank One paid for naming rights to the local baseball park three years ago.

In terms of financing, the document shows that Ellman plans to float $200 million in tax-exempt bonds and borrow $260 million. His company also expects to earn $67.7 million from gross sales from the arena the first year of operation, 2003, a figure that he expects to climb to $105 million by the 10th year.

The sale of portions of the development, like the planned neighborhood-shopping center, would net another estimated $283 million. The sale of 350 loft condominiums that will be developed on the site would bring in millions more, Ellman says.

The Los Arcos Redevelopment Project, at the corner of Scottsdale and McDowell roads, would be anchored by a 17,000-seat ice hockey arena, which is expected to cost more than $125 million to build. The development also includes hundreds of thousands of square feet of office and retail space.

Ellman, along with partner Wayne Gretzky, is in the process of buying for $87 million the Phoenix Coyotes. The transaction is expected to be completed by year’s end, with the team moving into the new sports complex as soon as the facility is finished.