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Coyotes' Glendale bond sale hits snag Add to ...

The City of Glendale is ratcheting up pressure to for the sale of the Phoenix Coyotes to be finalized, but the tactics haven't worked and have only raised questions about whether the deal will go ahead.

The sale has dragged on for months with no end in sight. The NHL is trying to sell the club for $170-million to Chicago businessman Matthew Hulsizer but the deal can't close until Glendale completes a $116-million bond offering. Most of that money is supposed to go to Hulsizer to help him pay for the club. In return the city is to get all the revenue from 5,500 parking spots around the Jobing.com arena, a city-owned venue where the Coyotes play.

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But the bond offering has hit a snag.

The Goldwater Institute, a public policy group, has indicated it is considering legal action to block the offering. The Institute argues the deal with Hulsizer violates Arizona's constitution which forbids local governments from providing subsidies to businesses unless the government receives comparable, direct benefits in return. The city rejects those arguments and insists the deal is legal.

A lawyer representing the city has made it clear time is running out and a deal has to be reached soon. "Time is of the essence," Jordan Rose, the Scottsdale, Ariz,-based lawyer, said on Friday.

Goldwater Institute CEO Darcy Olsen said Rose went further last week by warning the deal would die within 24 hours if Goldwater didn't stop holding things up by threatening litigation.

"A couple of days ago we heard the deal would be off in 24 hours if we didn't make a decision," Olsen said.

The deadline passed and Olsen said the group hasn't been given another ultimatum. Rose denied making the comment.

In an e-mail, NHL deputy commissioner Bill Daly said the league is monitoring the process and added: "We have neither set nor issued any deadlines or ultimatums."

A decision either way by Goldwater would at least give some certainty to the process and allow Glendale to either pull the offering and renegotiate the deal, or proceed and take its chances in court.

Olsen said the Institute is still reviewing the proposal and has been pressing the city in court to turn over documents related to the deal. The group received 150 pages of material from the city on Friday. "Glendale negotiated this under the cover of darkness and we will not make a decision [on whether to sue]until all the facts are known," she said.

To up the ante, the Institute recently sent a letter to several brokerage firms underwriting the bond offering and to rating agencies telling them a lawsuit over the sale could be coming. The letter notes that if the group sues investors in the bonds "could face the risk that the transaction would be held unconstitutional and void."

Olsen defended the Institute's conduct and said threats from the city won't work.

"It's kind of fruitless to try to put pressure on the Goldwater Institute," she said. "We do what's right come hell or high water. That's how it goes."

Meanwhile, there are also developments concerning another beleaguered NHL franchise, the Atlanta Thrashers.

There is word out of that city that two groups of investors are stepping up their interest in the Thrashers, Atlanta Hawks of the NBA, and the Philips Arena where the teams play.

The Thrashers' owners, a dysfunctional consortium known as Atlanta Spirit, have made no secret of their desire to unload the hockey club, and the Atlanta Journal-Constitution reported that one of the groups sat down with the NHL on Thursday and has also met with NBA officials.

The newspaper reported it will likely be another month before actual negotiations on a sale begin.

The NHL's preferred option is for the money-losing team to stay put - it has been trying to drum up ownership interest - but fans in Winnipeg and Quebec City, in particular, will be watching keenly.

Sources in Quebec City say they've received no signal from the league that a relocation is in the cards, but it seems clear the city could accommodate a team on short notice.

The municipal administration last week indicated it would cost between $4-$10 million to renovate the creaky, 61-year-old Colisée in order to make it NHL-worthy - work that could be accomplished quickly should the opportunity to move a team arise.

Plans to build a new arena are pressing ahead, a spokesman for Mayor Régis Labeaume recently said an eventual Colisée renovation depends largely on whether the city decides to go ahead with a bid for the 2022 Winter Olympics. Should the city elect not to mount a bid, in which a renovated Colisée would otherwise feature, it seems unlikely it would dedicate considerable sums to refurbishing a building that will face the wrecking ball once work on the new facility is completed in 2015.

With files from staff writer Sean Gordon

Follow on Twitter: @PwaldieGLOBE

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