Coyotes start legal processes after vote to terminate arena lease
GLENDALE, Ariz. -- The Arizona Coyotes are used to having an uncertain future. Unlike the four years of waiting for a new owner to step forward, the team has gone on the offensive in the latest twist to this ongoing saga.
The Coyotes on Thursday began mapping out their response to the Glendale City Council's decision to dissolve an arena lease agreement with the team. It will include a variety of legal maneuvers, but no immediate plans to relocate the team and certainly no renegotiation of the existing agreement.
''Our view is they've done their action and we're moving forward with our legal options,'' Coyotes co-owner Anthony LeBlanc said during a conference call.
The Coyotes signed a 15-year, $225 million lease agreement for then-Jobing.com Arena with the city of Glendale in 2013, just a few months after IceArizona bought the team from the NHL. Last year, Philadelphia hedge fund manager Andrew Barroway purchased a 51 percent stake in the team, strengthening it financially, and the organization also agreed to a nine-year naming rights deal for what is now called Gila River Arena.
But, as usually seems to be the case with this franchise, the fog of uncertainty began to stir.
Last week, some Glendale council members raised concerns about where the $15 million the city pays IceArizona to operate the arena was going. LeBlanc and Barroway met with city officials Monday and thought they had clarified that issue, only to be surprised when a vote was called Wednesday night to cancel the arena lease agreement.
Despite strong opposition from local businessmen and Glendale residents during the public forum portion of the meeting, the council voted 5-2 to end the lease agreement, citing an Arizona conflict-of-interest law. The statute allows an entity to cancel a contract if a person who worked on the deal later represents the other party, which councilmembers say happened when former city attorney Craig Tindall began working for the Coyotes as general counsel in 2013.
''This is to protect the taxpayers,'' Mayor Jerry Weiers said during the meeting. ''I believe they violated the law.''
LeBlanc and attorney Nick Wood, who both spoke on behalf of the team, had a quick response, much of which revolved around legal action.
LeBlanc said the Coyotes have started working on seeking a temporary restraining order to prevent the city from ending the deal and a lawsuit that Wood said would reach into the hundreds of millions of dollars.
Aiding the Coyotes will likely be a wave of high-end lawyers hired by the NHL.
''The National Hockey League stands by, and will fully support, the Arizona Coyotes in their efforts to vindicate their contractual rights in response to last night's outrageous and irresponsible action by the City of Glendale,'' the NHL said in a statement. ''We continue to proceed on the basis that the Coyotes will remain in Glendale and will be playing their home games at Gila River Arena.''
The threat of the Coyotes leaving has been an issue, real or perceived, since former owner Jerry Moyes took the team into bankruptcy.
Even after IceArizona purchased the team, speculation that the team would move did not end. The largely Canadian ownership group insisted the lease agreement include an out clause if the team loses $50 million after five years, which added to conjecture that IceArizona would eventually move the team that originated in Winnipeg.
The council's vote has intensified the relocation speculation, particularly with a long list of potential suitors waiting in the wings, including Seattle, Portland, Oregon, Las Vegas and a Canadian city.
''Everyone talks about the out the clause and if we wanted to pack up and leave. Guess what? We have an out clause now and we're going the other way,'' LeBlanc said. ''We're doing nothing but working aggressively to make sure we can stay in what we feel is our rightful home here at Gila River Arena.''
The Coyotes likely face a lengthy and expensive legal battle ahead, though LeBlanc said there are no plans to alter the hockey budget. He added that Glendale has not given them any indication that the team will be asked to vacate the arena and the team will continue to operate normally there unless something changes.
If the Coyotes are unable to work out their differences with Glendale, there might by a viable option just down the road.
The Coyotes spent their first seven seasons in Arizona sharing a downtown arena with the NBA's Phoenix Suns and a Phoenix city council member has already raised the possibility of another downtown alliance.
