No one wants to pay for the Phoenix Coyotes
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Hey there, time traveller!
This article was published 25/02/2011 (4418 days ago), so information in it may no longer be current.
WINNIPEG — Point the finger anyway you like — at the City of Glendale, the NHL, Matthew Hulsizer or the Goldwater Institute — but the bottom line is no one wants the Phoenix Coyotes. Or more to the point, no one wants to pay for them.
Hulsizer, the Chicago businessman, wants to own the Coyotes but he either can’t or won’t fork over the US$170 million the NHL wants for the franchise it bought out of bankruptcy over a year ago.
Glendale has had that same year to find a buyer and has come up with a deal that hinges on fronting Hulsizer $100 million of the purchase price.
The problem is the sale flies in the face of Arizona law. The state has a constitutional gift clause that prevents governments from propping up private businesses with taxpayer money.
Glendale’s bond issue has been hung up by the threat of a lawsuit from the Goldwater Institute. The taxpayer watchdog lobby group says Glendale’s US$116-million bond issue that would fund Hulsizer’s purchase of the Coyotes is illegal.
The city’s attempt to pre-sell the bonds has gained little traction because investors are scared to lock up money in a bond that could be frozen by a legal action.
Without that bond money, there is no Coyotes deal and rumblings have the NHL getting testy with Glendale about the progress of the deal.
Sources say the league is not at the, “finish this or else,” point but with the Atlanta Thrashers franchise also in financial trouble, that moment can’t be far off.
In the deal with Hulsizer, Glendale would receive the right to sell parking at Coyotes games in exchange for $100 million. The bond issue is based on revenue generated from 5,500 parking stalls at Jobing.com Arena being able to meet the city’s interest and principal covenant.
That revenue would need to be in the neighbourhood of $7 million a year and few believe that’s attainable, including a national parking consultant whose findings were hidden from Glendale city council prior to their voting on the deal.
“It certainly appears unconstitutional and if we determine that to be the case we will file suit. But we can’t make that determination until we have all the documents before us,” Goldwater president Darcy Olsen told the Free Press on Friday. “The City of Glendale has been recalcitrant. They just dropped off another 150 pages of documents. We have to begin to go through those files. We can’t and won’t make a decision until we have all the facts before us and that is up to the City of Glendale.”
Glendale has hired a lawyer to try to cajole the Goldwater Institute into making a decision but Olsen says the lobbying has had little effect.
“That’s up to the City of Glendale. They have been in defiance of a judge’s orders to hand over all documents. This deal appears to be based on shady findings,” said Olsen, referring to a parking study prepared by a consultant currently involved in a lawsuit for inflating the value of potential income in a separate bond issue. “We’re not a chamber of commerce concerned with the time line of a deal. It is our mission to fight for the cause of freedom and to protect the Arizona constitution and this deal appears to be unconstitutional.”
The NHL, meanwhile, no longer describes Coyotes sale as a foregone conclusion.
“We understand that the bond sale process is ongoing,” said NHL deputy commissioner Bill Daly. “No deadlines have been set by the league and we continue to monitor the process. There is nothing more that needs to be said at this point in time.”
The league has hung in with Glendale well past the Dec. 31, 2010 deadline that’s been agreed to. Glendale had until then to find a local buyer or the NHL would be in position to sell the Coyotes to a buyer for relocation.
The NHL and True North Sports and Entertainment worked on a purchase agreement last spring and it’s understood the deal could be re-activated with little difficulty.
True North, made up of a partnership between Winnipeg’s Chipman family and Canada’s richest man, David Thomson, has both the will and means to close this deal in quick order.