The City of Glendale has chosen the nuclear option.
The City Council will discuss ending its 15-year Gila River Arena lease agreement with the Coyotes at a special voting meeting on Wednesday, scheduled for 6 p.m. Whether it has the legal basis to do so is a question that will now likely be left to legal experts.
Multiple sources said the entire basis of the challenge will focus on Arizona statute 38.511.
A. The state, its political subdivisions or any department or agency of either may, within three years after its execution, cancel any contract, without penalty or further obligation, made by the state, its political subdivisions, or any of the departments or agencies of either if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract on behalf of the state, its political subdivisions or any of the departments or agencies of either is, at any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity or a consultant to any other party of the contract with respect to the subject matter of the contract.
Craig Tindall resigned as Glendale City attorney in late February of 2013 (the resignation becoming official on April 1). He became general counsel for the Coyotes in August of that year.
At the heart of Glendale's legal case will be proving whether Tindall had a hand in creating the current arena lease agreement. It seems a stretch since Tindall left the city well before negotiations with Renaissance Sports & Entertainment (now IceArizona) began on an arena lease agreement in late May.
However, Glendale kept Tindall on a six-month retainer and he was paid his full salary through September 2013, so it may argue that he served some role for the lease agreement. Two sources familiar with the situation said Tindall had no role in the drafting of the agreement.
In November of 2013, then-Councilman Phil Lieberman filed an ethics complaint with the State Bar of Arizona concerning Tindall. Lieberman alleged that Tindall went to work for the Coyotes in 2013 while still being paid a severance by Glendale. The State Bar dismissed that claim.
In reaction to the news, the Coyotes released a statement through Nick Wood, outside counsel for the team.
"This is a blatant attempt to renege on a valid contract that was negotiated fairly and in good faith and in compliance with all laws and procedures. In the event the City Council initiates any action to revoke, repeal or otherwise rescind the agreement, the Coyotes will immediately take all actions available to them under the law against the City of Glendale."
Glendale Mayor Jerry Weiers and Vice Mayor Ian Hugh met with Coyotes president and CEO Anthony LeBlanc and majority owner Andrew Barroway on Monday. Interim city manager Dick Bowers and City Attorney Michael Bailey also attended. LeBlanc said Tuesday at a press conference that the meeting was designed to foster better relations and communication with the city, but LeBlanc blasted Glendale after news of the legal challenge broke.
"This action by the City of Glendale is completely ludicrous, especially in light of the fact that myself and Andrew Barroway visited with the City yesterday and the particulars of this were never raised," he said in a statement. "In fact, we to this moment have not been advised of this other than the notification on the City website. The City of Glendale is displaying a complete lack of good faith, business acumen or an understanding of a business partnership. We want to reassure our great fans that the Arizona Coyotes are committed to Glendale and playing at Gila River Arena."
Hugh, who has opposed the idea since the council voted 4-3 in favor of it in July of 2013, has spearheaded the legal challenge. At that time, Hugh and Weiers, who also voted against the deal, said they wanted a better deal for the city with more revenue coming from the Coyotes.
If the city hopes to use this legal challenge as a ploy to negotiate a better deal, LeBlanc has said the Coyotes will not entertain the idea. The arena lease agreement is worth $225 million to the Coyotes over 15 years.
The National Hockey League released the following statement on Wednesday morning in response to Glendale's actions:
"We have been advised by the Coyotes that the City of Glendale's contentions are without merit and we fully expect the Coyotes to continue to play at the Gila River Arena and for the City to continue to honor its obligations to the Coyotes. After everything that has transpired, it is extremely disappointing that the City of Glendale would do anything that might damage the Club."
VIDEO: Coyotes CEO Anthony LeBlanc seemed to have no indication of Glendale's intentions when meeting with the media Tuesday to discuss the team's off-season agenda.
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