GLENDALE, Ariz. – The Glendale City Council approved a proposed arena lease agreement submitted by a group headed by Chicago sports mogul Jerry Reinsdorf that is seeking to buy the Phoenix Coyotes.
The council also acted on a second proposal, rejecting a plan submitted by Ice Edge Holdings, a group of Canadian and U.S. investors.
Reinsdorf’s group, known as Glendale Hockey, must now reach an agreement with the NHL, which purchased the team in bankruptcy court last year.
Reinsdorf’s deal would provide millions of dollars annually to the group through the creation of a “community facilities district.” It would change the team name to either the Glendale Coyotes or Arizona Coyotes, with the NHL’s approval, and would keep the team in the suburban Phoenix city.
But how long the group would keep the club in Glendale is a matter of debate.
Reinsdorf, the owner of baseball’s Chicago White Sox and the NBA’s Chicago Bulls, and his partners wouldn’t move the team from Glendale for the remaining 24 years of the lease, city officials said.
However, if certain conditions related to the facilities district aren’t met, in the fifth year, Reinsdorf’s group could give 180-days notice that it intends to sell the team. Glendale would have that 180 days to find a buyer who would keep the team in Arizona, with Reinsdorf guaranteed a minimum purchase price of US$103 million, the amount the group will invest in the team.
Also under Reinsdorf’s plan, the facilities district would pay the NHL up to $65 million over three years. In addition, a reserve account would be set up to cover operating losses of up to $25 million a year with a maximum $100 million over seven years.
The Winnipeg Jets moved to Arizona and became the Phoenix Coyotes in 1996 and the team has never turned a profit in the desert.
NHL deputy commissioner Bill Daly said last week the league would have no comment until the city completes its process.
Lawyer John Kaites, a lead player in the Reinsdorf group, said he hopes to reach an agreement with the NHL within 60 to 90 days.
Reinsdorf’s group was approved 6-0 while Ice Edge was voted down 5-1.
Glendale mayor Elaine Scruggs did not attend the meeting. She was in Washington D.C. on previously scheduled business.