GLENDALE, Ariz. – Potential buyer Matthew Hulsizer joined officials of the conservative Goldwater Institute and city of Glendale in a lengthy, often-contentious meeting Thursday about the issues standing in the way of his acquisition of the Phoenix Coyotes.
Not surprisingly, there was no resolution.
The institute has emerged as the deal-breaker with its vow to sue if the lease agreement reached by Hulsizer and the city is finalized, a scenario that has placed the deal in jeopardy and added to the possibility that the NHL might finally give up on Arizona and agree to move the franchise elsewhere, possibly back to Winnipeg, its home before moving to the desert 15 years ago.
The institute has promised to file a lawsuit if the lease agreement worked out between Glendale and Hulsizer is finalized in its current form because of concerns the deal violates the “gift clause” of the Arizona constitution. The NHL has indicated it still wants to keep the franchise in Arizona but can’t wait forever.
At the start of the meeting, Goldwater Institute executive director Darcy Olsen didn’t want Hulsizer to speak because his appearance was unplanned and the real target of its inquiry was the city.
However, Hulsizer did get to speak at length before leaving well before the meeting concluded.
He accused the institute of “picking and choosing” aspects of the agreement rather than looking at it as one entity.
The city is not paying him to buy the team, but is paying for parking rights and other aspects of the operation.
Hulsizer said there are several teams for sale. There are good reasons to buy this one, he said, but if it doesn’t work out he will look elsewhere.
The Chicago entrepreneur became most upset when a Goldwater representative said, “All we see is a series of things that do not make market-value sense, which look like an effort to prop up a business that is not sustainable and that is why you may be one of the only people out there stepping up to the plate.”
Hulsizer said in his many conversations and communications with the Goldwater Institute he had never once been asked to explain that aspect of the situation.
He said he knows he will lose money at first but added that, with his US$75 million guarantee of repayment of the $100 million from bond revenue that Glendale has promised him as part of the agreement, the city will make money, certainly more than if Jobing.com Arena is vacant.
“I will guarantee for sure it is a mathematical certainty that we will pay the city back more than what they will spend in terms of $75 million because we already pay the city as part of the lease millions of dollars a year, $5 million a year,” he said, “and that goes away if we leave.”
Hulsizer had some disagreements with the city. He said Goldwater should have access to all relevant documents and said he had no problem with the Tohono-O’dom tribe stepping in to help out. Glendale mayor Elaine Scruggs dismissed that suggestion, made by the Goldwater Institute, out of hand because, she said, it would require the city to drop its lawsuit trying to block establishment of a casino in the city limits.
“That sounds like blackmail to me,” the mayor said.
The city has vehemently opposed the casino.
The rest of the discussion centred on the familiar issues of the fee paid for parking rights and for management of the arena.
Hulsizer had an interesting observation about the management fee, which the institute considers high and wants put out to completive bidding.
“You guys know (Arizona Diamondbacks owner) Ken Kendrick. He’s running a facility (Chase Field) that doesn’t operate 365 (days),” Hulsizer said. “You should ask him what he thinks it costs. I’ve talked to him. He thinks it’s going to cost him $12 million. We think it’s going to cost us $15 million” to run an arena year-round.
Kendrick’s wife, Randy, is on the Goldwater Institute’s board of directors.
The meeting was closed to the public but an audio recording was made public shortly after the session ended. Technical difficulties made listening impossible to thelast two of the six audio files made available by the institute. A printed transcript was promised on Friday.
The NHL bought the team out of bankruptcy in September of 2009 with the stated intention of finding a buyer to keep it in Arizona. The league has denied reports that it already has a buyer lined up to move the team back to Winnipeg.