Coyotes' future in Glendale hinges on city council's vote on arena lease.
By CRAIG MORGANFS Arizona
Is this the end?
After four-plus years, a thousand unexpected twists and an equal number of political power plays and backroom deals, will the Phoenix Coyotes’ ownership saga finally reach its conclusion tonight at Glendale City Hall?
The City Council is expected to vote on a proposed arena-lease deal it concocted last week in response to a revised proposal from Renaissance Sports and Entertainment, the prospective ownership group that includes George Gosbee, Anthony LeBlanc, Daryl Jones and Avik Dey.
The council meeting is scheduled to begin at 7 p.m. PT, but the media has been advised that proceedings could drag on until midnight.
While the city's deal contains a couple measures that RSE has already called “non-starters,” council member Gary Sherwood noted last week that it is possible and legal for the council to propose a few amendments and still vote on the deal tonight. Those amendments could include removing the city’s proposed five-year out clause, which is the most significant sticking point in Glendale’s counter proposal. No other NHL team has such a clause and the NHL will not allow it. Nor will RSE’s lenders.
The core question the council must answer (and likely already has) in its decision tonight is whether the city is better off with or without the Coyotes. While Mayor Jerry Weiers and some opponents of previous RSE deals have voiced their concerns with the lack of guaranteed revenue for the city and the significant financial risk it believes it is assuming, the fact remains that Glendale chose to build the $220 million arena in 2003 with $180 million of its own money. Now the city must protect its investment, whether it was a wise one or not.
Some city officials project that keeping the team, according to the current proposed agreement, would cost the city about $2 million a year more than letting the team go, but others believe the reverse is true, including Sherwood, Vice Mayor Yvonne Knaack and council member Manny Martinez. They believe losing the Coyotes would have a devastating impact both on the arena and on the surrounding areas like Westgate in the form of lost tax revenue. One city attorney termed that loss difficult to measure because it is considered soft revenue, but Westgate business owners have been vocal in their support for keeping the Coyotes.
Under the RSE deal, the city would pay the team $15 million a year for 15 years, with various revenue streams promised in return to help offset that cost. RSE believes the revenue coming back to the city, coupled with the $6 million the city already has budgeted for managing the arena will reimburse the city all of its money, but it has also guaranteed about $1.3 million from a ticket surcharge to help ease Glendale’s concerns.
That money could be used in the event Glendale falls short of revenue projections. If it does not, RSE keeps the money.
The current proposal would keep the team in Glendale for at least another five years, allowing RSE time to turn around years of poor team stewardship or no stewardship at all. If not, RSE could exercise its out clause and move the team, or it could sell it.
If the city chooses a non-hockey arena-management option, the Coyotes are likely to leave, with Seattle, Quebec and a number of other cities being mentioned as possibilities. But RSE announced a major development in the story on Monday, a partnership with industry leader Global Spectrum, a subsidiary of Comcast-Spectacor, to manage Jobing.com Arena.
Global also manages nearby University of Phoenix Stadium, which could create a lucrative synergy for the area by allowing the event manager to push smaller events to Jobing.com Arena yet keep them in Glendale. Global Spectrum manages more than 110 other public assembly facilities around the world. More event dates at Jobing.com Arena would mean more revenue for the City of Glendale, an obvious gain if it chooses to approve this deal.
“Combining Global Spectrum's management of the stadium next door with the efforts at the arena creates unique operating efficiencies that will be financially beneficial to both venues,” Comcast-Spectacor President Peter Luukko said in a statement. “With opportunities to combine our efforts, we can maximize opportunities for our teams, our customers and guests while significantly reducing expenses.
“At the University of Phoenix Stadium, the Arizona Cardinals and the Fiesta Bowl are the anchor tenants. We have been extremely successful attracting events such as international sporting events, trade shows, concerts, and large-size events to the stadium's schedule, making that venue one of the most heavily booked and successful stadiums in the world. By booking around the Coyotes schedule at Jobing.com Arena, we are certain we will see similar success."
If the council approves the deal tonight, the Coyotes will remain in Glendale, although it is still possible the deal could be challenged either by the Goldwater Institute or a citizens referendum.
If the council votes against the deal, the Coyotes could move to another city for the 2013-14 season or remain in Glendale one more year if a suitable alternative city is not considered ready. Quebec is building a new arena that should be ready in 2015. Seattle still offers only Key Arena, which seats only about 11,000 for hockey. The city could build a new arena, but it is uncertain whether that will happen now that the NBA has decided the Sacramento Kings will not relocate there.
With so much at stake tonight, the public council meeting should be well attended, and that crowd should include some of the major players in this story. An NHL spokesperson said that commissioner Gary Bettman and deputy commissioner Bill Daly plan to attend. LeBlanc and partner Avik Dey will be there, as will Coyotes President and COO Mike Nealy and GM Don Maloney.