GLENDALE, Ariz. – Desert hockey lives to see another season.
What good, if any, the one-year reprieve granted the Phoenix Coyotes by the Glendale City Council will do remains to be seen. The best-case scenario, from the council’s perspective, will be for the NHL to finally complete a sale that keeps the franchise at the city’s Jobing.com Arena for many years to come. At worst, the city could be out US$50 million and still lose the team.
After hours of testimony and discussion, the council voted 5-2 late Tuesday night to give the NHL $25 million for arena operating costs for next season. It’s the second $25 million Glendale will have forked over. The city did the same a year ago and the league collected that cash out of escrow last week.
Now the NHL, which bought the team out of bankruptcy in September 2009, must either figure out a way to push ahead with the stalled purchase of the team by Chicago businessman Matthew Hulsizer or find a new buyer.
“We’re pleased with the result tonight,” NHL Deputy Commissioner Bill Daly said after the council meeting. “That being said, we still have to sell this team and we’re going to work on it right away.”
There were indications that Glendale could be reaching out to other potential buyers, although no one would comment for the record on that possibility. Two council members mentioned Tuesday night that they knew information they could not divulge publicly on the Coyotes issue.
The vote came almost two years to the day after then-owner Jerry Moyes took the Coyotes into bankruptcy, to the surprise of the NHL, in a bid to sell to Canadian billionaire Jim Balsillie, who would move the franchise to Hamilton. The NHL vehemently opposed that plan, though, and a U.S. Bankruptcy Court judge refused to allow the sale to go through.
Eventually, the NHL was the only bidder left standing and it bought the team with the stated objective of finding a buyer to keep the team in Arizona. Failing that, the franchise would be moved elsewhere, possibly back to Winnipeg, where it was located before moving to the desert in 1996.
After several false starts, the league thought it had found a buyer in the 42-year-old Hulsizer, who worked out a lease agreement with Glendale that would require the city to sell $100 million in bonds to give to the new owner for arena operating costs and the right to charge for parking. That’s when the conservative watchdog group the Goldwater Institute leaped into the fray, vowing to file suit if the agreement was signed on the grounds it violated the Arizona constitutional provision banning public subsidies for private businesses.
The institute took the highly unusual step of warning bond traders to stay away from the deal. Glendale has been unable to sell the bonds and on Tuesday night council member Joyce Clark declared the Hulsizer agreement dead, as it is currently structured.
“I don’t think that deal will ever make it,” she said. “That’s my opinion.”
Clark voted against the Hulsizer agreement, which was approved by a 4-3 council vote, but she was in favour of Tuesday’s action because she said the city can’t afford to lose the Coyotes and the related impact on the adjacent Westgate entertainment district.
“You’ve got another year,” she told Daly. “That’s it.”
The arena is across the street from University of Phoenix Stadium, home of the Arizona Cardinals and the Fiesta Bowl.
The city built the arena for $220 million in 2003 expressly for the Coyotes, and city officials said it would cost nearly as much as is being paid to the NHL to operate it for concerts and other events if the team leaves.
Among the possible next steps mentioned by Daly was going to court to seek a “declaration” that the Hulsizer lease agreement is legal. There also was the possibility, he said, of restructuring the Hulsizer agreement. Or, Daly said, the league may find “a new investor with a new deal.”
“Those are all possibilities,” he said, “and tonight’s resolution will give us an opportunity to explore those.”
He hinted that there was another potential buyer, something that’s been heard many times before. Two council members added that they had heard things in secret sessions that they could not make public.
While Daly said he was hopeful the ownership question could be resolved by the end of the summer, the franchise faces the possibility of a third season under league ownership.
General manager Don Maloney, who has been able to put a winning team on the ice through two seasons in limbo, painted an upbeat picture of the team’s improving local support. Seasonticket renewals, he said, are at 80 per cent.
But die-hard fan Amy Jo Green testified that the issue was wearing thin, even for her.
“If the drama is wearing on me,” she said, “our casual fans are toast.”