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Clock ticking, NHL pushing bonds

Goldwater Institute won't back off; 'crunch time' for Coyotes sale near

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The NHL is not standing idly by waiting to see if Matthew Hulsizer will sink or swim in his effort to buy the troubled Phoenix Coyotes.

The league IS actively engaged in helping the City of Glendale sell or place the US$116-million municipal bonds being floated to fund $100 million of Hulsizer's purchase price, NHL deputy commissioner Bill Daly confirmed Friday.

Daly replied in the affirmative when asked that question, then added to his email: "I think it is fair to say that we are attempting to assist in the completion of the transaction in any way we can."

That assistance, however, doesn't have an unlimited time frame on it. Next week will be "crunch time" on the matter, sources say, and you'd be hard-pressed to argue the point, given the desperate public comments late in the week by Glendale Mayor Elaine Scruggs.

At this late stage of the keep-the-Coyotes-in-Arizona game, the deal is facing some stiff headwinds. The previously underestimated Goldwater Institute has successfully created a climate of doubt about the legality of Hulsizer's lease with Glendale, so much so that potential investors in the bond issue have turned skittish.

The Goldwater Institute continues to urge the city to revise its deal with Hulsizer because it may not comply with Arizona's gift clause forbidding subsidization of private business.

The increased risk created by Goldwater's continuing examination of the lease's paperwork has left the bond issue only partly sold.

Goldwater attorney Carrie Ann Sitren repeated Friday in a note to the Free Press that it doesn't need to wait for Hulsizer to receive the proceeds of the bonds if it wishes to act.

"Nothing has changed in our position; I believe it is still procedurally appropriate for a legal challenge to be made either before or after the money is transferred," Sitren said.

Sitren said Goldwater was still reviewing documents and hasn't yet decided to file suit.

Hulsizer's comments to Fox Sports Arizona last weekend indicate bond sales are either stalled or slow. He complained that Goldwater has caused an unneccesary delay and that it's driving up the interest rate on the bonds to unsustainable levels.

Still, Hulsizer said if the Goldwater Institute doesn't have its questions and issues answered by either himself or NHL commissioner Gary Bettman, who have volunteered to make themselves available, he is "prepared to close right now. We have everything we need to close."

Hulsizer also said on air: "We're prepared to close, but we'd really like to do it by saving the city some money. This deal is going to close." That lends credence to further suggestions from sources who say that before this deal reaches an endgame with the NHL, the would-be owner will be asked to top up the transaction -- possibly the shortfall in bond sales -- with his own capital.

If that's within a matter of a few days, then Hulsizer will be meeting again soon with his investors' group (they huddled last weekend) to decide to close or abandon the effort.

The purchase price from the NHL is believed to be in the neighbourhood of $170 million. In his sweetheart lease with Glendale, beyond proceeds of the bonds, Hulsizer will realize an extra $97 million in the next five years as a management fee for jobing.com Arena.

Meanwhile, the focus has turned away from the money-losing Atlanta Thrashers, if only temporarily.

One source said Friday that Atlanta ownership has been put on a "30-day clock" to get its strategy settled.

The Atlanta Spirit group has been trying to unload the Thrashers for years and if the mentioned deadline is in play, it sounds like the NHL is still trying to make a determination on the franchise's fate for next season.

Current ownership, as well as the league, strongly prefer a local solution, but none has become evident to this point.

It's believed that only when Bettman has resolved the Coyotes matter will he will turn his attention to Atlanta, but that when he does, neither he nor the league's governors are likely to be in the mood for a repeat of the protracted mess the league was drawn into in the desert.

tim.campbell@freepress.mb.ca

Republished from the Winnipeg Free Press print edition March 5, 2011 D3

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