GLENDALE, Ariz., city manager Ed Beasley has begun talks with the NHL over how it will pay the league up to US$25 million to cover losses and expenses at Jobing.com Arena should no buyer be found for the Phoenix Coyotes.
Glendale's council unanimously approved a motion on Tuesday night to give Beasley the authority to make a deal, a critical demand by the NHL, which is adamant it will not fund any more Coyotes' losses after this season.
The league owns the team, purchased out of bankruptcy last fall, and is trying to find a buyer that will keep the club in the Arizona desert long-term.
The NHL has until June 30 to walk away from the pre-bankruptcy lease, an option that would likely mean relocating the team.
It's expected that if a long-term solution is not found before that deadline, the league could work out a one-year deal that would keep the Coyotes playing in Glendale in 2010-11 -- so long as the city ponies up the $25 million.
An interested party to this multi-faceted drama is the Goldwater Institute, an Arizona taxpayer watchdog organization that has been making noise this week about filing another suit against the City of Glendale for improper delegation of authority to its city manager to spend so much money.
The conservative think-tank, however, backed away from quick action on Friday, saying that after more research, it determined it would stand a better chance of success in court if it waits until the details of Beasley's arrangement are made public.
"We were pretty sure we were going to file this week," spokesman Le Templar said in an interview. "But we are concerned about the prospect of getting this thrown out of court if we go too soon. We're most concerned about subsidizing the team illegally and we want to be in the best position."
Templar said the institute expects Beasley's deal to be made public. Goldwater has already sued the City of Glendale to disclose documents pertaining to its negotiations with the NHL.
Also waiting in the wings are the two groups believed to be in the running to buy the team. Negotiations on those fronts should begin soon, once Beasley has secured the $25-million guarantee.
Jerry Reinsdorf, the owner of Major League Baseball's Chicago White Sox and the NBA's Chicago Bulls, already has an approved memorandum of understanding with the city. It's non-binding but contains millions of dollars in funds from arena parking and an about-to-be-created community facilities district that will assess fees and surcharges to businesses around the arena.
The other group, Ice Edge LLC, had its memorandum denied last month, but is believed to want less than Reinsdorf's group in Glendale-generated cash.
The Goldwater Institute has objected to many elements of the Coyotes/Glendale/NHL proposals.
Is one any more of a priority than the others?
"It's hard to say which legal violation is worse," Goldwater Institute attorney Carrie Ann Sitren told the Free Press on Friday. "Spending public money for a sports franchise has a direct financial impact on taxpayers, and the fate of the Coyotes seems to revolve around that issue.
"But shifting power and responsibility from elected officials to unelected staff eliminates accountability and is contrary the representative system of government that defines this country. On a fundamental level, transparency is what guarantees that the public can discover and protect against officials who violate the law. The Goldwater Institute will continue our watchdog efforts in the City of Glendale and throughout the state."