Phoenix Coyotes lease approved by Glendale City Council, clearing way for Greg Jamison purchase
Is the strange, sad, frequently stupefying ownership saga of the Phoenix Coyotes finally reaching its finale?
The Glendale City Council voted 4-2 on Tuesday night to approve a 20-year, $320 million arena lease management agreement that should clear the way for former San Jose Sharks CEO Greg Jamison's ownership group to purchase the team from the National Hockey League.
Who's in that ownership group? No one knows. But that argument has been that getting his financial team in order was difficult with the uncertainty over the Jobing.com Arena lease deal.
He's got his deal. The Coyotes, through all this madness, appear to be remaining in Phoenix under new ownership, putting an end to the constant relocation talk that's haunted the franchise and stunted its momentum even as the team thrives on the ice.
And Shane Doan breathes a sigh of relief.
This saga stretches back to May 2009, when owner Jerry Moyes placed the Coyotes into bankruptcy for a dastardly reason: To allow Research In Motion co-founder Jim Balsillie to purchase the team for $212.5 million; and, in the process, get around the approval of the NHL to make the sale — Balsillie having run afoul of Gary Bettman and the league after a botched purchase of the Nashville Predators.
A court battle — remember Judge Redfield T. Baum? — 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. 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 Jamison stepped to the plate.
There was talk all year that Jamison had been approved by the NHL as a Coyotes owner, and that it was just a matter of pulling together an ownership group and settling a lease deal with Glendale. There were several false starts along the way, including back in June when it appeared an arena lease deal was in place.
That hurdle was cleared on Tuesday night in the 4-2 vote by the Glendale City Council.
"I don't believe this is a sports issue; I believe this is an anchor tenant issue," said Councilwoman Yvonne Knaack, citing the shopping district where Jobing.com Arena is located. "Westgate is only 50 percent occupied, and I think people are waiting in the wings to see what this decision is going to be."
According to the Arizona Republic, here's what the council considered in making the vote:
Glendale would have to cut $20 million from the general fund if the deal is approved and must trim $12 million without it. Making $20 million in cuts could mean cutting about 200 positions in the next five years, [interim City Manager Horatio] Skeete said.
The fund pays for core city services, including public safety, parks and street repairs. In 20 years, the city would have a negative general-fund balance of $144 million with the team vs. $238.5 million without the team.
With or without the Coyotes, projections are showing the city in a hole, Skeete said.
The newest version of the agreement helps Glendale because it lowers payments in the early years of the 20-year deal, saving the city $4 million.
Now, some penalties and incentives have been added to encourage Jamison to book more non-hockey events. Also, the new deal gives Glendale opportunities to get some advertising revenue and naming rights.
Via the Arizona Republic, on Tuesday's vote:
Mayor Elaine Scruggs and Councilwoman Norma Alvarez had opposed the deal, calling the payments to Jamison to manage the city-owned hockey arena, which average $15 million annually, a subsidy.
Interim City Manager Horatio Skeete has said that keeping the Coyotes might be in the long-term best interest of the city, but it requires too many cuts in the near term. it would require the city to lay off employees to cut $17 million within five years. Without the team, Skeete estimates the city would need fewer layoffs to cut about $10 million. He estimates the city would lose money either way.
Is the saga over? No one is going to believe it until the ink is dry on the lease deal and Jamison's contract to buy the team from the NHL — a deal that will require him to secure investors, which again remains a mysterious part of the equation.
For better or worse, this is as much a part of Gary Bettman's legacy as any of his lockouts. It was a personal crusade to thwart Balsillie, and then to overcome the political obstacles in Glendale to justify the time and treasure it took to keep the Coyotes on life support. If Jamison closes the deal, it's a victory for Bettman; heck, based on the expansion fees the NHL will suck out of Seattle and Quebec City alone, it might be a win.
But if this deal financially devastates the city, as its critics contend, it becomes a Pyrrhic victory.
Bottom line: The Coyotes appear close to remaining in Glendale, even if that's the 100,000th time we've written that statement in the last three years.