Goldwater to sue Glendale over Coyotes deal

PAUL FRIESEN, QMI Agency

, Last Updated: 8:43 PM ET

The NHL’s effort to keep the Coyotes in Phoenix has taken another hit, albeit one the league saw coming.

The Goldwater Institute has decided to sue the City of Glendale over the proposed sale of the Coyotes.

In a statement on its web site, the Arizona taxpayer watchdog group says it will file a legal challenge over the proposed deal with Matt Hulsizer, ready to argue it contravenes state laws preventing excessive taxpayer subsidies for private groups or individuals.

“Deals of this size and scope happen all the time in the private marketplace without putting taxpayers on the line,” Goldwater president Darcy Olsen said in the statement, citing the recent sale of the Buffalo Sabres. “Mr. Hulsizer certainly appears better equipped to buy this team with his own funds than the taxpayers of Glendale.”

The move won’t help Glendale’s efforts to sell bonds to raise $100 million of Hulsizer’s $170-million purchase price for the franchise.

The city plans to repay that debt with parking fees and, if necessary, tax revenue.

The deal would also see Glendale pay Hulsizer $97 million to manage Jobing.com Arena over the next five years.

Goldwater says its decision comes after examining more than 1,000 pages of documents provided by Glendale, under court order, in the last 10 business days.

“Because the city has changed the deal’s parameters multiple times and continues disclosing previously withheld documents, including 391 yesterday, the Institute will file its lawsuit when the deal closes,” the statement said.

The mere threat of the lawsuit had stalled the bond sale, drawing criticism from NHL commissioner Gary Bettman last week.

The league is working with Glendale to find buyers, but it’s feared the city would have to offer a much higher interest rate to combat the risk factor.

Asked how the suit affects the deal now, deputy commissioner Bill Daly was noncommittal, Tuesday.

“Difficult to say at this point,” Daly said in an e-mail to the Sun. “We will have to evaluate and make decisions in due course.”

If the sale to Hulsizer falls through, the NHL has said it will have to look at relocating the franchise.

The only known option is a sale to True North Sports and Entertainment, headed by Winnipeg’s Mark Chipman and bolstered by the backing of Toronto billionaire David Thomson.

Chipman has maintained an ongoing dialogue with the NHL about the possibility of acquiring a franchise. He was asked to make a presentation to the NHL’s executive committee as far back as January, 2008.

The NHL has been searching for a buyer for the Coyotes since it bought the team out of bankruptcy court in the fall of 2009.


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