City Hall, escrow account come into play in Coyotes saga
JUN 25, 2013 10:20a ET
On Monday, multiple reports surfaced that Glendale might use City Hall as collateral to borrow $30 million to help pay off two $25 million commitments the city made to the National Hockey League for arena management fees. The fees were made in exchange for the league operating Jobing.com Arena in fiscal years 2011 and 2012.
If the council approves the plan, city officials would seek a one-time, up-front payment of $30 million from outside investors, and lease back the City Hall complex for a 20-year period.
The information clearly casts a dark cloud over the city’s past dealings with the team, and a dark cloud over the current negotiations on a Jobing.com Arena lease with Renaissance Sports and Entertainment, the prospective ownership group headed by George Gosbee and Anthony LeBlanc.
Here’s the flip side: One of those $25 million payments (from 2012) has not been collected by the league yet. There is $20 million sitting in an escrow account and $5 million which the city hasn’t yet paid (the city didn’t pay the NHL anything during the 2013 lockout-shortened season).
In the latest concession to the city, the NHL has agreed to allow repayment of that money over a five-year period, allowing Glendale to use the money in the meantime and possibly earn interest, multiple sources have confirmed to FOX Sports Arizona.
Council member Gary Sherwood had previously wondered if the NHL were leaving the money in escrow for such a purpose, to help ease any financial burden on the city, and that has now been confirmed.
However, if the RSE deal fails and the Coyotes relocate, the NHL would require Glendale to repay the entire $25 million immediately.
The council will further discuss the RSE deal Tuesday during an executive session and is expected to vote on leveraging city hall during its regular Tuesday session. Two city sources said Glendale is expected to make public details of the proposed RSE deal early Wednesday.
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