SBD/June 11, 2012/Franchises

City Of Glendale Approves Coyotes' Proposed $325M Lease Agreement

The Glendale City Council voted 4-2 in favor of the agreement
After three years of "troubles marked by bankruptcy and failed negotiations, the Phoenix Coyotes have a likely new owner who promises to keep the team in Phoenix under a $325 million taxpayer-funded agreement approved Friday afternoon by the Glendale City Council," according to Chan & Halverstadt of the ARIZONA REPUBLIC. The council voted 4-2 in favor of the agreement. Glendale Mayor Elaine Scruggs "questioned why the city would support an agreement while its own budget was under strain, but a council majority decided the benefits of keeping the Coyotes outweighed the costs." Prospective Owner Greg Jamison, whose status "still has to be formally approved" by the NHL BOD, was "flanked by NHL Commissioner Gary Bettman" (AZCENTRAL.com, 6/8). Bettman said, "We've been doing this a long time. We believe this team, the Coyotes, can be here with a new ownership in place and should be here." The AP's John Marshall noted the fight "might not quite be over, but it's certainly a big step for the Coyotes, who have played under a cloud of uncertainty since Jerry Moyes took the team into bankruptcy three years ago." Bettman and Jamison both said that they "hope to have a deal in place over the next couple of weeks, which would [give] the team financial room to be players in the free agent market and re-sign players" (AP, 6/8).

SHOW ME THE MONEY: In Phoenix, Mike Sunnucks noted Jamison "still needs to get the money and financing in place to finalize a purchase of the team." The deal will be "challenged next week in court by the Goldwater Institute." Scruggs said that the money for the arena deal "will come from a proposed city sales tax increase." The move "could be challenged this fall in referendum" (BIZJOURNALS.com, 6/10). Also in Phoenix, Sonu Munshi noted the Goldwater Institute sought to delay the vote with a restraining order, "arguing that the city had not yet released documents key to understanding the financial deal proposed." The restraining order was denied, and the judge said that Glendale "could be sanctioned for proceeding on a vote" (AZCENTRAL.com, 6/8).

MORE COURT TIME COMING? An ARIZONA REPUBLIC editorial stated that by rushing to vote, "Glendale confirmed its reputation as the Valley city with the greatest disdain for transparency." In the process, "it assured itself of more time in court and less trust from residents." This was "pure arrogance." Goldwater "will be back in court Monday, before a judge who handed it an engraved invitation." The editorial: "The city will likely lose. Why? Because leaders unnecessarily rushed a vote, instead of allowing the full public participation necessary in a democratic society" (ARIZONA REPUBLIC, 6/9). But in Phoenix, E.J. Montini writes, "Just because they can sue, should they?" The bigger questions are: "Will gutting what is clearly a bad deal make things better? Or will the possible loss of the hockey team and everything that goes with that in terms of jobs and adjacent businesses make the situation in Glendale even worse?" Goldwater officials "preach purity." They say that they "are motivated by their belief in privatization and lack of taxpayer participation in enterprises like professional sports." Montini: "But how pure can those beliefs be when on the institute's board is the wife of Ken Kendrick, owner of Arizona Diamondbacks, a business that would not exist without taxpayer participation?" (ARIZONA REPUBLIC, 6/11).
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