Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Jobing.com Arena, where the Phoenix Coyotes NHL hockey team plays home games in Glendale, Ariz. (Ross D. Franklin/AP)
Jobing.com Arena, where the Phoenix Coyotes NHL hockey team plays home games in Glendale, Ariz. (Ross D. Franklin/AP)

David Shoalts

Coyotes arena agreement forces Glendale to dig deep Add to ...

The City of Glendale is about to mortgage the family home for $30-million (all currency U.S.), as the cost of keeping the Phoenix Coyotes.

And this does not include the $15-million annual payments the suburban city of 250,000 may hand over to the latest prospective owners of the NHL team to prevent it from moving to Seattle or Quebec City.

More Related to this Story

That arena lease deal is still being negotiated, although it is hoped the details will be known later this week, in advance of a council vote on July 2.

But buried on the agenda of Tuesday’s council meeting is an emergency measure to secure a lease-purchase agreement for a maximum of $30-million on Glendale’s City Hall Complex.

It is essentially the same as mortgaging the family home to pay your debts, which in this case is the $50-million the previous Glendale council agreed to pay the NHL in the 2010-11 and 2011-12 seasons, to cover part of the Coyotes’ losses and operate Jobing.com Arena.

The reason city council, which has four new members – who were elected this year on promises of fiscal responsibility and turning off the cash spigot for professional sports teams – is declaring this an emergency measure to avoid any calls for a city-wide referendum on the matter.

According to section six of agenda item No. 26, which has the generic title of “Authorization For Lease Financing,” the ordinance was declared an emergency measure “and it is hereby exempt from the referendum provisions of the Constitution and laws of the State of Arizona.”

Glendale Mayor Jerry Weiers, one of the four new members of the seven-person council, could not be reached for comment.

The $50-million obligation to the NHL placed such a financial burden on the small city that several official funds were tapped to raise it, including the landfill fund ($21-million), sanitation fund ($4-million) and the water and sewer fund ($15-million).

Since the money in these funds is needed to pay for ongoing operations, anything paid out has to be paid back quickly.

The only exception, the city noted, is the $21-million owed to the landfill fund, which it expects to pay back over 30 years as the money is not needed right away.

Money got so tight for Glendale in 2012, as it faced growing annual deficits after the recession hit in 2008, it only paid the NHL, which bought the Coyotes out of bankruptcy in 2009, $20-million of the $25-million it agreed to pay in the 2011-12 season.

But it appears NHL commissioner Gary Bettman has not forgotten the $5-million debt, as the ordinance includes it in the debts that will be repaid with the city hall financing.

Follow on Twitter: @dshoalts

In the know

Most popular videos »

Highlights

More from The Globe and Mail

Most popular