THE City of Glendale, Ariz. has granted Ice Edge Holdings the exclusive right to negotiate a lease at Jobing.com Arena as a possible prelude to the purchase of the Phoenix Coyotes.
Glendale's seven-member city council voted unanimously on Tuesday night to approve a memorandum of understanding that gives Ice Edge the exclusive right to reach a lease deal with the Phoenix suburb, a necessary step before the group of Canadian and American investors may proceed with an attempt to purchase the team from the NHL.
The memorandum gives Ice Edge 60 days to exclusively negotiate with the city over a new lease. Another party could break that clause by giving Glendale US $25 million to cover the money the city has pledged to the NHL to cover the team's losses next season if a sale is not worked out.
If somehow the Ice Edge plan falls through and no local buyer can be found, the NHL has said it would look to move the franchise, which never has turned a profit since it moved from Winnipeg in 1996. A possible destination for the franchise would be Winnipeg, where True North Sports & Entertainment is a willing and able buyer. Ice Edge admitted Monday its bid for the team is in trouble due to money problems. Glendale has also stipulated a 10-day deadline from Tuesday for Ice Edge to provide proof of financing.
The Coyotes have lost tens of millions of dollars each of the last few seasons.
Then-owner Jerry Moyes took the franchise into bankruptcy last year with the intent on selling it to Canadian billionaire James Balsillie, contingent on moving the team to Hamilton. NHL officials have said they were about to present Moyes with a letter of intent from Chicago investor Jerry Reinsdorf to buy the team when the bankruptcy filing was made. The NHL fought the Balsillie deal in court, contending that the league had control over who owns its teams and where they play.
That paved the way for both Ice Edge and a group headed by Reinsdorf to attempt to buy the team and keep it in Arizona. But late Monday Reinsdorf, owner of the Chicago White Sox and Chicago Bulls, withdrew and issued a statement saying "it was time to move on."
The Reinsdorf group once was the front-runner to buy the team but had fallen out of favour in recent weeks, while Glendale officials worked out a memorandum of understanding with Ice Edge, a group of Canadian and American investors.
In the statement, the Reinsdorf group called the decision to pull out a difficult one. "Ultimately we came to the conclusion it was time to move on. We were happy to serve a critical role for the City to keep the team in Glendale and we look forward to assisting the City in the future on other projects both as a company and individually."
- Staff/Associated Press