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SBD/December 15, 2010/Franchises
Glendale City Council Approves New Jobing.com Arena Lease
Published December 15, 2010
The Glendale City Council last night "approved a $197 million deal to keep the financially struggling Phoenix Coyotes at" the city's Jobing.com Arena, according to Rebekah Sanders of the ARIZONA REPUBLIC. The council approved by a 5-2 vote a new lease agreement with prospective Coyotes owner Matthew Hulsizer. NHL Commissioner Gary Bettman and Deputy Commissioner Bill Daly were on hand for the four-hour meeting. The lease, "under most circumstances, would allow the professional hockey club to remain at Jobing.com Arena for three decades, until 2040." Council member Joyce Clark cast one of the dissenting votes, and her main concern "centered on part of the agreement that would allow Hulsizer to terminate the arena lease before then if the city failed to meet its financial obligations to the team or faced a lawsuit that invalidated part or all of the deal." Hulsizer in that case "would still be allowed to keep the money that the city provided through the deal." Hulsizer "told the council he was willing to allow 120 days for negotiation with the city if such a default or lawsuit judgment were to occur." Glendale Mayor Elaine Scruggs after the meeting added that the NHL "had told Glendale it would not allow the team to move, even if there was a lawsuit judgment, for seven years."
TERMS OF THE DEAL: The agreement "requires Glendale to wire $100 million to Hulsizer quickly, perhaps in the next few weeks, which would help him purchase the team from the NHL for $170 million." In addition, the city "will pay Hulsizer $97 million in annual installments ranging from $10 million to $20 million over the next 5 ½ years to manage events at the arena." Glendale after that time "can renegotiate further payments to Hulsizer for arena management, sell the arena to Hulsizer or find another buyer to purchase the facility." Hulsizer "agreed to maintain the rent and fees other team owners paid to Glendale each year to play at the arena, as much as $6 million per year." He also will "work to rename the team the Arizona Coyotes." The NHL's "final approval of Hulsizer should come shortly after Glendale sells its bonds." Bettman said that Glendale "will be chosen to host an NHL All Star game sometime in 2012-2014" (ARIZONA REPUBLIC, 12/15). Bettman: "This is the resolution we sought. The action taken by the council is successful and conclusive" (AP, 12/15).
TAKING A CLOSER LOOK: The Goldwater Institute, a public watchdog group, said that the proposed lease deal "may contravene an Arizona law which prevents politicians from paying more than fair market value to a private business." Goldwater said that there are "too many financial uncertainties in the deal," and added that the agreement "could amount to an 'unconstitutional subsidy' for the Coyotes." The group also "questioned the city's purchase of parking rights for $100 million" (QMI AGENCY, 12/15).