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Watchdog lining up lawyers

Goldwater Institute preps to sue Glendale over alleged violations

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There will be no straight course to the finish line over the fate of the Phoenix Coyotes, at least not if the Goldwater Institute has its way.

The conservative taxpayer watchdog group is ready to sue the City of Glendale as early as today for allegedly violating Arizona law by empowering city manager Ed Beasley to negotiate a form of a loss-covering deal for 2010-11 if the NHL is left to own the team for another season.

The city council voted unanimously on Tuesday night to authorize Beasley to go as high as US$25 million on those losses and if he can pull that off, it likely assures the Coyotes will remain in Arizona at least another year while a sale of the franchise is pursued.

Goldwater Institute attorney Carrie Ann Sitren told the Free Press late Wednesday the court appearance was imminent.

"We plan to file something soon in the context of our pending public records lawsuit against Glendale," Sitren said.

The Goldwater Institute took the city to court last year, claiming it violated state laws regarding public records.

In this, those records concerned the Coyotes sale. A judge has ordered the city to make those documents available, but the city has revealed next to none and is fighting to keep them away from public scrutiny.

The group also objects to perceived subsidies being made available to two bidders for the team -- the Jerry Reinsdorf group, which has a Glendale-approved memorandum of understanding (MOU), and Ice Edge Holdings LLC, which reportedly remains in the running but does not yet have an MOU with the city.

The Goldwater Institute insists some of the possible lease conditions for a new owner of the Coyotes at Glendale-owned Jobing.com Arena violate the Arizona Constitution's gift clause that says communities may not provide excessive subsidies to private businesses.

Some calculations made on Reinsdorf's non-binding MOU put the city's contribution to a new lease, including revenues and fees from a communities facilities district (CDF) that is to be created around the arena at nearly $46 million annually.

Sitren also told the Free Press the group cannot launch a new suit over public subsidies until the money is actually spent.

The institute's current suit and threatened further action against the city drew no opinion Thursday from NHL commissioner Gary Bettman.

"I'm not an expert on Arizona law so I'm not knowledgeable enough to know what impact the Goldwater Institute could have," Bettman told the Free Press. "I assume our lawyers will deal with that as appropriate."

Any Goldwater Institute intervention puts an interesting wrinkle on the NHL's urgency to have its $25-million guarantee.

For starters, today is a mutually agreed-upon deadline between Wininpeg-based True North Sports and Entertainment and the NHL for relocation talks regarding next season.

True North, which owns and operates the MTS Centre and the AHL's Manitoba Moose, feels it can go no farther down the road on a potential return of the NHL for the fall of 2010, mainly because it has urgent AHL business -- including important player signings -- to conduct for next season.

The NHL, whose board of governors has made clear to Bettman that no more money is to be spent on covering Coyotes losses, has some important choices to make, and soon.

Glendale's $25 million is an insurance policy on that possibility but there's been no news on how close that specific agreement is to being complete. It is believed that only a legally binding guarantee will satisfy Bettman and the NHL, not just a vote or an assurance from the city council.

In the meantime, there's little True North -- and Winnipeggers -- can do now but watch the scenario play out in Arizona.

 

tim.campbell@freepress.mb.ca gary.lawless@freepress.mb.ca

Republished from the Winnipeg Free Press print edition May 14, 2010 C2

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