Glendale, RSE bridge gap on Coyotes deal; vote pending
The City of Glendale and the Coyotes’ prospective buyer have done what many thought impossible. Multiple sources have confirmed that the two sides have bridged a $9 million annual gap on an arena lease agreement and the proposal will be presented at the Glendale City Council executive session on Tuesday.
Details of the proposal were not forthcoming, but while the city has only approved $6 million in its budget to manage the arena, it is believed Renaissance Sports and Entertainment, the ownership group headed by George Gosbee and Anthony LeBlanc that already has a purchase agreement with the NHL, was able to find multiple Coyotes-related revenue streams for Glendale that will provide the city between $8 million and $11 million annually on a 15-year lease.
Article continues below ...
RSE needs about $15 million annually to manage the arena. The additional revenue streams will, in some manner, account for the difference between the amount RSE is seeking and the amount Glendale has budgeted. Although specifics of those revenue streams are not known, it is possible that some could come from ticket surcharges, parking fees, suite sales and stadium naming rights. Jobing.com signed a 10-year, $30 million naming rights deal in 2006.
Councilmember Gary Sherwood said the council will review the proposal on Tuesday and possibly suggest some alterations, and then it is expected to be added to the agenda for the City Council meeting on June 25, possibly for a vote.
If the council can’t sift through all of the information it has in time for a vote on June 25, it’s possible the process could be delayed until July. NHL deputy commissioner Bill Daly recently told Sherwood that if the NHL were confident a deal was forthcoming, it would be amenable to waiting until early July. However, Sherwood noted that a special city council voting meeting has been added on June 28, at which time a vote could also take place.
The next step, and likely the last major hurdle in the process, is the council vote, which will require four “yes” votes out of seven. Sherwood has been preparing a report that examines the financial implications for the city with and without the Coyotes that he will present to council members on Tuesday. Based on his task force’s findings, the Coyotes remaining in Arizona would mean about $1.5 million more annually for the city.
If the council does not approve RSE’s bid, Daly indicated recently to Sherwood that there are a number of options for relocation. Quebec is considered a fallback option because the league would prefer to procure a lucrative expansion fee from that city.
A league source said this week that renderings of a reconfigured Key Arena in Seattle have been circulating, and a report from Seattle said the chilling system and ice-making equipment are currently operational at the arena, which means it could serve as a temporary home while groups begin working on getting a new arena built. Key Arena would only seat about 11,000 people for hockey.
But the memorandum of understanding for a new Seattle arena calls for an NBA franchise to be acquired in order to begin construction. It would likely have to be amended in order to begin construction for an NHL franchise.
Even without an immediate new arena, multiple sources believe Seattle is a good Plan B because it is a solid financial market, it has a thriving youth hockey program that has been strong for at least four decades and it’s the perfect location for the league’s realignment plan — some would argue it’s a better location than Phoenix given the travel requirements of Western Conference teams.
NHL Commissioner Gary Bettman has made no secret of his admiration for Seattle, but the first option was and still is Phoenix.
If the Glendale City Council is unable to vote on a new deal before the new fiscal year begins on July 1, it is possible the city could ask the NHL to continue to manage the arena on a monthly basis until a deal is secured, Sherwood said. Again, that would require assurances that a deal is forthcoming.
In related news, Glendale on Friday trimmed the list of non-hockey bidders interested in managing Jobing.com Arena in half. Phoenix Arena Development Limited Partnership and SMG are the two finalists. The first is a subsidiary of the Phoenix Suns and manages US Airways Center. Philadelphia-based SMG manages multiple venues and partnered with the Arizona Cardinals’ Rojo Event Management and Select Artists Associates for the Glendale bid.
The two finalists will make presentations to Glendale staff members and consultants on Monday, and that information will be shared with the City Council in the closed-door session on Tuesday, along with RSE’s proposal. The estimated management costs of the non-hockey bids are unknown.
The two non-hockey bids are of use for only two reasons: for comparison’s sake when examining RSE’s bid and for actual management of Jobing.com Arena if the Coyotes are to leave. No ownership group is amenable — and neither is the NHL — to a non-ownership group managing the arena if the Coyotes stay in Glendale.
With the team’s ownership status still in limbo, Coyotes coach Dave Tippett said Friday that it’s still “status quo” for him. Tippett’s contract expires June 30, the same day as the draft, and Tippett joked that it would create a quandary for him if the draft ran later than midnight.
Tippett and GM Don Maloney have been in communication since Tippett returned from vacation in Minnesota on Wednesday, but with the council meeting looming on June 25 and the NHL Board of Governor’s meeting on June 27, the coach said he was content to let the situation play out.
Should he reach the open market, he will have a number of suitors that could include the Vancouver Canucks, Dallas Stars and New York Rangers. Tippett’s status is directly tied to the fate of free-agent goalie Mike Smith, who is seeking a lucrative, long-term deal.
On a final note, reports emerged on Thursday that there was a new potential buyer for the Coyotes. There were also reports that longtime suitor Greg Jamison was in town to discuss a deal with more equity up front.
Although he declined any further comment, Jamison categorically shot down both rumors. He was not in town this week and he does not have a new deal ready.
Sources also confirmed there is no other mystery buyer, a point that Bettman underscored to TSN on Friday when he told the media outlet that no parties other than RSE have negotiated for the team.
It’s RSE or bust for the Coyotes’ hopes in the Valley.
Follow Craig Morgan on Twitter