The Glendale City Council voted 4-3 to approve a 15-year, $225 million lease deal for Jobing.com Arena to Renaissance Sports & Entertainment a.k.a. IceArizona, the NHL-backed group that will take over the Coyotes and keep them in Glendale.
No relocation to Seattle. No relocation to Quebec City. After over four years of court challenges, ownership controversies, local political backlash and empty seats in the arena, the Coyotes aren’t going anywhere.
For the time being.
After securing a conditional purchase from the NHL, IceArizona executives approached Glendale leaders with a proposal that called for the city to pay them $15 million a year to manage the city-owned arena.
The hockey executives promised to reimburse the city millions a year based on revenue drawn from new ticket surcharges, parking fees and a split of naming rights for the arena and a new stage within the arena.
The deal was approved without the controversial “out clause” the city asked for, allowing it to end the lease after five years. That was removed in the approved deal, although IceArizona continues to have one of their own in the lease, in which they can leave in the fifth year if the team loses $50 million.
According to the Arizona Republic, this was the deal on the table entering Tuesday’s council meeting:
Glendale would pay: $23.9 million
Management fee: $15 million.
Debt service on the arena: $8.4 million.
Capital repairs at the arena: $500,000.
Glendale’s Westgate and Tanger tax collections: $4.3 million
Non-hockey sales taxes: $3.7 million.
Hockey sales taxes: $636,000.
The team would pay Glendale: $6.72 million
Hockey ticket surcharge: $1.5 million.
Non-hockey ticket surcharges: $1.7 million.
Parking fees: $2.2 million.
Naming rights for the arena: $670,000.
Naming rights for a new stage within the arena: $150,000.
Secondary ticket surcharge on all events: $1.2 million*.
Glendale’s bottom line: Negative $12.9 million
NHL Commissioner Gary Bettman spoke before the council on Tuesday. “Through the fits, the starts, the ups and downs, we’ve had incredible support from the fans in the Valley,” he said. “In the face of all the uncertainty, the fans and the business community were supportive.”
Thus ends an ordeal that began in May 2009 for the NHL.
That’s when owner Jerry Moyes placed the Coyotes into bankruptcy, allowing Research In Motion co-founder Jim Balsillie to purchase the team for $212.5 million and get around the approval of the NHL to make the sale.
A court battle raged through the summer and finally saw Balsillie drop out of the bidding for the team in September after the court rejected both his bid and that of the NHL to own the team. Two months later, the NHL purchased the Coyotes for $140 million at auction.
Then came a parade of potential buyers. Ice Edge Holdings, an investor group that sought to play some Coyotes games in Canada, couldn't close a deal. (Members of Ice Edge are a part of the current bidding group.) Matthew Hulsizer, a Chicago-based businessman, nearly had a deal but local politics in Glendale forced him to pull his bid. The NHL had Jerry Reinsdorf in the mix at several junctures, before former San Jose Sharks COO Greg Jamison stepped to the plate but couldn't get the proper financial backing for his bid.
But Renaissance Sports & Entertainment had something those groups did not.
First, it had a partnership with Global Spectrum, a premiere arena management firm that also manages the University of Phoenix Stadium where the NFL's Arizona Cardinals play. But it also had the NHL saying this was zero hour for the franchise, and that relocation would likely happen if the arena deal wasn’t approved.
What’s next for the Coyotes? The NHL will rubber stamp the new owners in August, having already backed their bid. The city will likely weather some petitions from citizens and inquiries from groups like the Goldwater Institute into this massive concession to the local hockey franchise.
But the most important thing on their calendar: Opening Night, when what’s expected to be the Arizona Coyotes -- yep, new name -- take the ice with a guaranteed five more years in the market and a chance for the fans to come out in droves to ensure they’re in Glendale beyond that point.
Or else, you know, we do this dance again in five years. Not the most encouraging or stable aspect of the bid, that out clause, but a necessary evil ...
One of the NHL’s most embarrassing chapters is closing. One of Glendale’s potentially embarrassing chapters is beginning. But it’s the Coyotes fans who are living the fairy tale right now, as their hockey heroes will remain in the desert with an actual, honest-to-goodness owner at the helm.
Related coverage on Yahoo! Sports:
• Penguins retain Kris Letang with $58 million extension
• Flyers sign Vinny Lecavalier to five-year deal
• Alex Ovechkin voted All-Star ... at two different positions?
- Ice Hockey
- Sports & Recreation
- Phoenix Coyotes