Hey there, time traveller!
This article was published 10/12/2010 (2267 days ago), so information in it may no longer be current.
Chicago businessman Matthew Hulsizer will likely purchase the Phoenix Coyotes in the coming weeks for $170 million, with the City of Glendale picking up the majority of that cost.
Under terms of a proposed lease agreement for Jobing.com Arena, Hulsizer would receive $100 million from the City of Glendale for parking rights.
This is a thinly veiled gift from Glendale to Hulsizer to grease the wheels of a purchase.
Hulsizer originally balked at the NHL's asking price of $170 million and when commissioner Gary Bettman wouldn't budge, Glendale came to the rescue with their portion of the sale price.
Hulsizer will also receive $97 million over six years to cover losses incurred by the Coyotes under an agreement that will see his ownership group manage Jobing.com for the City of Glendale.
Glendale posted a lease agreement on Friday afternoon negotiated between Hulsizer and city bureaucrats.
If city council approves the lease Tuesday, it clears the way for the sale of the Coyotes to Hulsizer and a group of minority partners.
There is little doubt Hulsizer took full advantage of Glendale's predicament in carving out a favourable lease. This deal, in many ways, is similar to what Jerry Reinsdorf asked for last spring and eventually had turned down. The main difference is Reinsdorf had a relocation clause in his bid and Hulsizer does not.
The city is running close to a deadline of Dec. 31 set by the NHL to sell the Coyotes or face losing the team to relocation. The lease will be voted on by Glendale city council on Dec. 14.
NHL commissioner Gary Bettman has stated failure to meet the deadline would allow the league to explore other sale opportunities, including those involving relocation.
True North Sports and Entertainment worked out a deal with the NHL last spring to buy the Coyotes and bring them to Winnipeg's MTS Centre. It's understood that deal could easily have been reactivated and finalized without much difficulty.
Glendale Mayor Elaine Scruggs was feeling the heat of possibly losing the Coyotes after putting up $180 million in 2003 to build the arena.
"What shall we do: lock it up, turn off the lights and then pay the debt on the arena?" Scruggs asked earlier this week. "Think of what that would say to the public if we closed the arena."
Hulsizer met with the NHL's executive committee earlier this week at league meetings in Florida, and Bettman said he would have unanimous approval if a sale closes.
At that time, Hulsizer declared a lease agreement was imminent.
Glendale posted a fact sheet on the city's website late Friday with the following key points:
"The proposed agreement will continue to allow Glendale to receive all the revenue it currently does to pay its obligations on the arena.
"This proposal provides for the city to purchase parking rights from the team for $100 million. The city will manage the parking at Jobing.com Arena, with this new revenue stream going to pay the purchase rights. The new revenue would include parking fees, advertising and naming rights. Parking revenue is generated year-round at every event at the arena, not just Coyotes games."
"Glendale owns the arena and it is Glendale's responsibility to maintain the facility. Under the proposed agreement, Glendale will contract with a management firm to operate the arena, with projected expenses of approximately $17 million per year, which is currently offset by having the Coyotes as the arena's main tenant."
Hulsizer's timing couldn't have been better. He had the leverage of a looming deadline and the prospect of a $500-million economic hit to the community, according to the City of Glendale.
Hulsizer walked into the bar at just the right time and picked a fight with the drunkest guy he could find.
Predictably, a few shots were landed and Glendale was begging for mercy.
The end result: Hulsizer got what he came for and barely suffered a bruised knuckle.