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Goldwater warns Glendale about subsidy law as vote nears

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GLENDALE, Az. - City of Glendale councillors will vote on a proposed lease agreement tonight for Jobing.com Arena that offers $197 million in payments to potential owner Matthew Hulsizer (8 p.m. on www.winnipegfreepress.com Cover It Live).

It all comes down to seven suburban city councillors in Arizona, voting to keep the Phoenix Coyotes or voting to let them go.

The councillors are expected to ratify the agreement, pushing the city’s sports facility debt to over $1 billion. To this point, only Councillor Phil Lieberman has spoken against the deal.

Earlier today Arizona lobby group The Goldwater Institute informed the City of Glendale they oppose the plan saying "it appears to grant an unconstitutional subsidy for the Coyotes."

Goldwater lawyer Carrie Ann Sitren points to the $97 million management payment the city would give Hulsizer to operate the building.

"This appears to be grossly disproportionate to the fair market value of the management rights and obligations, creating the potential for a violation of the gift clause," said the letter. Arizona law prohibits the gifting of public funds to private business.

"In addition to the arena management fee, there are other aspects of the proposal that could implicate the gift clause, such as special tax treatment, waiver of the team’s previous obligations, and the value of the parking rights when it is unclear both in terms of likely revenues and to what extent the city already owns those rights."

It is unknown if Goldwater will attempt to file an injunction impeding the sale of the Coyotes should council ratify the agreement.

In the event Glendale council does not approve the lease, this story will take on a new life in Winnipeg.

Winnipeg-based True North Sports and Entertainment, the company owned by the Chipman and Thomson families, was on the verge of closing a deal with the NHL last spring and it’s understood the terms of that deal could quickly be resurrected.

True North’s intentions were to move the Coyotes to Winnipeg’s MTS Centre. NHL commissioner Gary Bettman has set a deadline for the City of Glendale to sell the Coyotes by Dec. 31st or the league will begin to consider offers including those based on relocating the team.

The Free Press is in Glendale for the meeting and will file online reports as well as stories for Wednesday’s print edition.

History

Updated on Tuesday, December 14, 2010 at 5:48 PM CST: Updates throughout, adds quotes

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