The threat of a legal uppercut from the City of Glendale appears to have done nothing to deter the group challenging the legality of the sale of the Phoenix Coyotes.
In a statement on her organization’s web site, Darcy Olsen, head of Arizona’s Goldwater Institute, vowed Monday night to continue probing the deal that would see would-be owner Matt Hulsizer buy the team using proceeds from the sale of Glendale city bonds.
“Let me be clear: the Goldwater Institute will not stop this investigation,” Olsen’s statement said, promising Glendale’s threatened suit would be “frivolous and unsuccessful.”
Accusing Glendale of not cooperating by withholding public records and calling for more transparency, Olsen said her organization’s analysis of the deal “remains incomplete.”
Goldwater has threatened to sue Glendale, saying the deal with Hulsizer may violate state laws which prohibit taxpayer money being gifted to a private enterprise.
The lawsuit threat has stalled the sale of the bonds, thereby threatening to scuttle the entire deal and making relocation of the team to Winnipeg a possibility.
Hulsizer’s takeover of the Coyotes is contingent upon Glendale fronting Hulsizer $100 million in exchange for parking rights at Jobing.com Arena, rights Goldwater says the city may already own.
“If so, the city is essentially ‘selling’ parking revenue rights to itself, which would be an obvious sham and a clear violation of the Gift Clause,” Olsen said.
Even if the city has to buy the parking rights from the team, Goldwater says it overpaid for those rights. And if parking revenue doesn’t cover the cost of the $100 million in bonds, the city has acknowledged it would have to dip into tax revenue, something Goldwater is dead-set against.
“That is extremely significant, because it means that if the team fails again — at any point over the next 30 years — or if parking revenues are insufficient to repay the bonds... the financial consequences could be catastrophic,” the statement said.
Goldwater’s solution: Hulsizer should agree to pay any shortfall.
As for Glendale’s assertion that Goldwater has gone out of its way to derail the deal, Olsen was blunt: “The Goldwater Institute is doing what the City of Glendale should be doing on its own: working to protect taxpayers.”
Earlier, Hulsizer told the Arizona Republic the Coyotes have lost $40 million this year, although that number could be offset by a strong finish to the season.
The Republic says Hulsizer would absorb that loss if his purchase goes through, driving his acquisition price for the franchise up to $210 million.