Coyotes' future put to vote Tuesday

CHRIS STEVENSON, QMI Agency

, Last Updated: 5:28 PM ET

Tuesday is shaping up as a big day in the future of the Phoenix Coyotes.

Glendale city council will vote on the viability of two memoranda of understanding on lease agreements for Jobing.com Arena reached with the two groups bidding to buy the Coyotes from the NHL. The league bought the franchise out of bankruptcy court last fall for $140 million.

The memoranda of understanding (MOU) were reached with Ice Edge Holdings, a group of Canadian and American investors and Glendale Hockey, fronted by Jerry Reinsdorf, the owner of MLB’s Chicago White Sox and the Chicago Bulls of the NBA and were made public by the city late Friday.

Both MOUs create a sharing of revenues with the city, with Glendale creating a special district around the arena to raise money through taxes and parking revenue.

The Reinsdorf deal looks to be more beneficial for him than the one cut by Ice Edge on their behalf.

“Ice Edge would like Reinsdorf’s deal,” Ice Edge COO Daryl Jones told the Arizona Republic. “Seriously.”

The Reinsdorf deal would see Glendale subsidize the cost of the franchise (it appears Reinsdorf, through the tax district, is offering just $65 million) and cover the Coyotes’ losses of up to $100 million for seven years. If the Coyotes are losing money after five years, the city would cover the losses or Reinsdorf would have the option to sell the team and be guaranteed at least $103 million.

The Ice Edge deal has no out clause and would see the Coyotes committed to Glendale for 24 years. Ice Edge has said it would offer the NHL about what the league paid for the franchise.

In return, the tax district, through parking fees, would give Ice Edge’s creditor the lesser of $7.5 million or what the bank is owed each year through the financing of the purchase of the team. The tax district would also establish a fund to subsidize the Coyotes’ losses up to $ 5 million a year for the first 10 years. There would also be a ticket surcharge worth $2 million a year.

There is a clause in the Ice Edge MOU to play five Coyotes home games at an alternate site.

“I think what you’re going to see is city council agree to both of them and send them on to the NHL,” said one NHL source which is closely monitoring the situation. “The MOUs have to be converted to a full-blown lease. If the city picks one over over the other, I think they lose some of their bargaining position. You know how it works. You let one horse leave the barn and it’s gone for good.”

The next step would be for the NHL, which is expected to lose $20 million operating the Coyotes this season, to sell the club to a group whose MOU is approved.

Both the Reinsdorf and the Ice Edge proposals would ask the NHL to change the club’s name to the Glendale or Arizona Coyotes.

chris.stevenson@sunmedia.ca


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