It’s official — Winnipeg will have to wait for the next puck crisis in the southern U.S. before entertaining thoughts of reacquiring an NHL team.
City councillors in Glendale, Ariz., Tuesday night approved a plan to keep the Phoenix Coyotes in that city for another 23 years.
The deal will see Glendale taxpayers commit $197 million in exchange for a promise from new Coyotes owner Matt Hulsizer to honour the remaining 23 years on the Glendale arena lease.
The move clears the way for Hulsizer to buy the franchise from the NHL for $170 million, effectively killing any hope of the team moving back to its original home in Winnipeg.
NHL commissioner Bettman assured councillors Hulsizer would be approved as an owner by the NHL board of governors, while Hulsizer’s speech included a pledge to keep the team in Glendale “for a very, very long time.”
The purchase would end a long-running soap opera that began when former owner Jerry Moyes threw the team into bankruptcy in May 2009.
Before the council meeting, Coyotes chief operating officer Mike Nealy appealed to fans in an open letter on the team’s web site, encouraging them to show their civic politicians how they feel.
“Wear your jerseys and help the Coyotes win the biggest fight that we have faced,” Nealy wrote. “Show the league along with 29 other NHL cities and Glendale City Council that Arizonians fight for what they believe in.”
Acknowledging that initial anticipation for the Coyotes in the desert eventually turned to apathy, Nealy said the team has a bright future under GM Don Maloney, head coach Dave Tippett and Hulsizer.
Around 300 people, some wearing Coyotes gear, filled the Glendale council chambers.
While councillors approved the agreement, they could still face some opposition, possibly even court action.
Earlier in the day, the Goldwater Institute, a public watchdog organization, warned that approving the lease could violate Arizona law, which prevents politicians from paying more than fair market value to a private business.
Saying there are too many financial uncertainties in the deal, Goldwater suggested the agreement could amount to an “unconstitutional subsidy” for the Coyotes.
The organization pointed to the $97-million arena management fee Glendale would pay Hulsizer over the first five years of the agreement, calling it “grossly disproportionate to the fair market value” and potentially violating a “gift clause” in the state law.
In previous years, the Coyotes bore the brunt of the costs of managing the arena.
Goldwater, which has had some success in shaping public policy in the past, also questioned the city’s purchase of parking rights for $100 million.
An article in Tuesday’s Arizona Republic says the deal with Hulsizer is actually more expensive for Glendale taxpayers than the subsidies Moyes asked for before declaring bankruptcy.
The city would also have been better off, financially, if it had accepted deals with previous suitors Jerry Reinsdorf and Ice Edge Holdings, the report said.
Reinsdorf’s deal, though, had an out-clause that would have allowed him to sell the team if it didn’t become profitable after five years.
Glendale was more desperate this time around, too, with a Dec. 31 deadline looming, after which the NHL had the right to sell the franchise to someone who’d relocate it.
The NHL, in fact, had such a tentative deal in place with Winnipeg’s True North Sports and Entertainment, backed by Manitoba Moose founder Mark Chipman and Canadian billionaire David Thompson, an investor in True North.