Glendale arrives at panic stage
Taxpayer watchdog clouding bond issue
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Hey there, time traveller!
This article was published 04/03/2011 (4286 days ago), so information in it may no longer be current.
There is only one determining factor in the sale of the Phoenix Coyotes to Chicago businessman Matthew Hulsizer — can the city of Glendale sell $116 million in bonds to finance the purchase of the team?
The bonds, which Glendale has been trying to promote and pre-sell for more than a month, must move in speedy fashion or NHL commissioner Gary Bettman is prepared to put an end to the proceedings in Glendale.
It is expected Bettman would then turn to True North Sports and Entertainment and begin franchise sale negotiations for relocation to Winnipeg.
Battle lines have been drawn between the city of Glendale and taxpayer watchdog the Goldwater Institute, with the sale agreement caught in the crossfire.
Goldwater has contended for some time the arrangement between Glendale and Hulsizer is illegal and a breach of Arizona’s constitutional gift clause.
Glendale foolishly underestimated Goldwater and still fails to understand the institute’s mission.
The city assured Hulsizer and the NHL it could handle Goldwater and now in the final hour is scrambling to overcome previous ineptitude. Goldwater appears unwilling to flinch and wants the deal reworked in a fashion that will leave Hulsizer responsible for footing the bill.
Hulsizer is not interested in a new package nor is the NHL willing to wait weeks or months for any form of a Plan B.
Goldwater’s mission is to make sure the constitution is upheld and not ignored at the whim of the politicians of the day. The city somehow believes it should be allowed to break the law in order to complete this deal but Goldwater will have none of that.
Both Hulsizer and now Glendale Mayor Elaine Scruggs have taken swipes at Goldwater this week but to little avail. The financial community, according to Scruggs, is unwilling to take up the bond under the current circumstances.
Bettman had this to say Thursday on his weekly radio show.
“(Goldwater) has put a cloud over the bonds, which is making it difficult to sell them. If it looks like the bonds can’t sell because the clouds can’t move, we’re going to have to start exploring our other options,” said Bettman. “… I’m hoping we can get this resolved. I’m not looking forward to the alternative solution if we have to go that route but we will if it comes to that.”
According to sources directly involved in the deal, the NHL has reached the conclusion the bonds will either sell in a matter of days or not at all.
The NHL has determined there is nothing left to discuss or attempt to orchestrate in Glendale and will now wait to see if the bonds sell.
Time is limited on the proposed sale and the league wants resolution by early next week.
In Glendale, panic has become the theme of the day with politicians pointing fingers and claiming financial ruin if the team should leave. The Coyotes, despite claims to the contrary, are little more than an afterthought on the Arizona sporting scene and are the second worst draw in the NHL.
“Due to the threat of legal action from the Goldwater Institute, we are now at a point where time has run out,” said Scruggs in an address on Thursday afternoon. “The city of Glendale is at a critical juncture to complete the agreement with Matthew Hulsizer… Unfortunately, Glendale’s ability to sell the bonds necessary to complete the agreement and provide the necessary financing for this project has been significantly hindered by the Goldwater Institute’s ongoing threat to legally challenge the agreement with Mr. Hulsizer. The Goldwater Institute is obstructing the city’s ability to sell the necessary bonds.”
Goldwater, in a letter to Scruggs supplied to the Free Press by the institute, stands by its assertion the deal is illegal.
“As you know, the Gift Clause requires a tangible quid pro quo for payments made to a private company or individual. The crux of the deal is the city obtaining parking rights in exchange for giving a payment of $100 million to the purchaser. We believe the city already owns the parking rights. We have examined all of the documents the City contends prove the opposite, and those documents fortify our conclusion. If the city owns the parking rights, then there is no consideration and the deal is unquestionably invalid,” writes Goldwater CEO Darcy Olsen.
Caution has been the theme on this subject in Winnipeg for some time. It should remain as such. While things look dire in Glendale, there is still no assurance the deal will die.
It bears repeating, the NHL’s priority is to keep the Coyotes in Phoenix and until the league is willing to do otherwise, any other outcome remains in question.