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Contentious arena lease vote could end Coyotes saga Add to ...

Mark Chipman is not going to spend Tuesday night monitoring the City of Glendale's council meeting in hopes it rejects an arena lease agreement with Matthew Hulsizer, the prospective owner of the Phoenix Coyotes.

The chief executive officer of True North Sports & Entertainment Ltd., who wants to bring an NHL team back to Winnipeg, realizes the Coyotes ship has sailed. A spokesman for Chipman said he will not be watching the proceedings in Glendale.

Several NHL sources say the Atlanta Thrashers are the next candidate for a move to Winnipeg, although Chipman declined to comment through his spokesman.

Those familiar with Glendale council say it is unlikely the lease will be rejected, which means any chance the Coyotes had of being moved is gone. Instead, the suburban Phoenix city of 250,000 will run its total sports debt (plus interest) to a breath-taking $1-billion (U.S.) by agreeing to pay Hulsizer, a Chicago businessman, a total of $197-million to buy the Coyotes from the NHL and keep them at Jobing.com Arena in Glendale for the next 30 years.

If Glendale does reject the proposed lease, which council member Phil Lieberman called "ridiculous," it would have to renegotiate and approve another one by Dec. 31. Otherwise, the NHL's agreement with Glendale would put the league in position to sell the team to someone who could move it.

However, Lieberman was the only council member to publicly voice any objections by Monday. Glendale Mayor Elaine Scruggs said the city has little choice but to approve the lease to keep the Coyotes, the arena's major tenant, because it needs what revenue it can get from the team to pay the existing debt on the arena, which is $180-million.

That $197-million in additional debt the city is willing to take on includes a $100-million up-front payment to Hulsizer for the rights to parking revenue as soon as the lease is approved and signed. The city plans to sell bonds to raise the $100-million.

This is the first time in memory anyone will be paid $100-million to buy a team. Hulsizer is expected to use the money to cover most of the purchase price of the Coyotes, which is thought to be $170-million.

The city will also pay Hulsizer another $97-million over five years to manage the arena. Hulsizer also gets the right to buy the arena from the city after five years for no more than $130-million.

But like Chicago White Sox owner Jerry Reinsdorf, who declined to buy the Coyotes, Hulsizer has an escape clause that might allow him to move the team: If the city ever misses a payment for managing the arena, he can brake the proposed lease.

Hulsizer will get most of the revenue from all events at the arena and the city also agreed to pay the cost of upkeep and improvements during the lease - which could become expensive if items such as video scoreboards are deemed necessary. In return, the city will get about $6-million per year in rent, a total of $4.30 per ticket in surcharges at arena events and the right to charge between $5 and $20 for 5,500 parking spaces around the building.

There is a chance the Goldwater Institute, a public watchdog, will take Glendale to court for violating Arizona laws against excessive public subsidies for private enterprises. But by the time any legal proceedings start, Hulsizer will be ensconced as the owner of the team. He already has preliminary approval from the executive committee of the NHL's governors.

Carrie Ann Sitren, the Goldwater lawyer in charge of the Glendale matter, did not respond to a request for comment.

Follow on Twitter: @dshoalts

 

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