GLENDALE, Ariz. – The conservative watchdog group Goldwater Institute has filed a lawsuit seeking to invalidate the Glendale City Council’s vote to approve a lease agreement for Jobing.com Arena with a potential buyer of the Phoenix Coyotes.
The lawsuit was filed Wednesday in Maricopa County Superior Court on behalf of Glendale taxpayers Ken Jones and Joe Cobb, claiming last week’s vote violated a 2009 court order requiring Glendale to provide all documents in negotiations between the city and a prospective owner to Goldwater in a timely manner.
The council voted 4-2 on Friday to approve the 20-year, $325 million lease agreement with former San Jose Sharks CEO Greg Jamison, who is leading a group that hopes to buy the Coyotes from the NHL. It also approved a non-relocation agreement requiring substantial financial penalties if Jamison were to move the team.
Goldwater claims the city did not make two exhibits in the proposed deal available to the public before Friday’s council meeting and asked the court to nullify the vote.
It also contends the council did not have the required approval from five of seven council members—one was absent from Friday’s meeting—for the agreement to be approved as an emergency measure, which allows it to go into effect immediately. Measures typically don’t go into effect for 30 days and may be put before voters if enough signatures are collected.
The lawsuit further claims the city violated its own charter by casting a vote on a proposed management agreement without putting an arena management contract out to bid.
In a separate filing, Goldwater asked that Glendale be held in contempt for violating the 2009 order by not releasing the exhibits.
A show cause hearing has been scheduled for Tuesday before Superior Court Judge Dean Fink.
“We continue to hope that the city will construct a lawful deal that protects the interests of Glendale taxpayers,” said Goldwater Institute President Darcy Olsen. “Without seeing critical exhibits contained in the arena management agreement such as the arena annual budget or the arena management performance standards, it is not possible to determine the constitutional validity of the agreement.”
The NHL has operated the Coyotes since former owner Jerry Moyes took the team into bankruptcy in 2009. The team has still managed success on the ice, making the playoffs all three years, but the ownership saga has been filled with failed negotiations and uncertainty.
Goldwater thwarted a potential deal with Chicago businessman Matthew Hulsizer last year when it warned potential bond buyers to stay away from the Glendale offering because of a looming lawsuit.
The NHL announced during the playoffs that it had a preliminary agreement with Jamison and the lease agreement for Jobing.com Arena was seen as the only major hurdle left in the deal.
Goldwater asked for a temporary restraining order to prevent Friday’s council vote, but Superior Court Judge Katherine Cooper denied the restraining order, saying the court lacked the jurisdiction. She did add that there were “clear violations” of the 2009 court order.
During the meeting, an economic study showed the city would have a benefit of $17 million from the deal that would pay Jamison $203 million and include an average of $15 million in operating costs. The study estimated $177 million in operating costs for the arena should the Coyotes leave it without an anchor tenant.
The final report for the economic study was not given to council members until about midway through a contentious council meeting that lasted more than six hours, but they still voted in favour of the deal.
Jamison, who attended the meeting with NHL Commissioner Gary Bettman and Deputy Commissioner Bill Daly, is currently working on a final agreement with the league to buy the team and both sides said they hoped to have approval from the NHL board of governors within a couple of weeks.