Jim Balsillie has a lease agreement with the City of Hamilton he can now use in his court battle with the NHL to buy and move the Phoenix Coyotes.
Balsillie said yesterday he had "an option on a 20-year lease" for Copps Coliseum, Hamilton Place and the convention centre. The agreement was approved by Hamilton city council last night, after being worked out by the council's NHL committee earlier in the day.
A source familiar with the agreement said Balsillie's representatives have indicated they plan to have the team in place by October for the start of the 2009-10 NHL season.
Hamilton Mayor Fred Eisenberger said the lease agreement will not be made public because it contains confidential financial, technical and commercial information.
But sources said the contract will be similar to the one Balsillie signed with the city when he tried - and failed - to buy the Nashville Predators and move them to Hamilton in 2007. That deal gave Balsillie's company all of the revenue from the three city-owned facilities, while he would be responsible for paying for upgrades, plus operations costs.
A source said the new agreement has some changes in the financial structure of the previous one, but could not provide details. Under the previous agreement between the two groups, the city was expected to realize a net benefit of $2-million annually. This would have been achieved by eliminating the current annual subsidy of $3-million it pays to Hamilton Entertainment and Conventions Facilities Inc. (HECFI) to manage the facilities.
The only potential major obstacle that had been in sight before the deal was made was the insistence by some committee members that Balsillie make a formal commitment to keeping the Coyotes in Hamilton. But a public statement by the Canadian billionaire soothed any fears he would use Copps as a temporary home for the Coyotes and then build a new arena elsewhere in Southern Ontario.
"Hamilton has always been, and remains now, my first choice for locating a potential seventh NHL franchise in Canada. I am not considering any other site locations at this time," Balsillie said in a statement.Balsillie has already said he intends to spend $150-million in improvements on Copps.
In a lawsuit filed against the NHL by the Coyotes, the team says Balsillie has pledged to make "substantial improvements in the Copps Coliseum, which will include luxury suites and other amenities that will make this arena among the best of those hosting NHL home games."
The BlackBerry tycoon is prepared to pay $30-million himself and plans to approach the federal and provincial governments for the rest.
Ontario Premier Dalton McGuinty said the provincial government is willing to listen to any request for public money for the arena renovations.
The next step in the fight by the co-chief executive officer of Research In Motion to purchase the Coyotes will take place in a Phoenix courtroom next Tuesday.
A U.S. bankruptcy court judge has to decide who controls the Coyotes - the NHL or team majority owner Jerry Moyes - before Moyes's petition to put the team into bankruptcy and sell it to Balsillie for $212.5-million (U.S.) can proceed.
The Hamilton lease also grants Balsillie exclusive rights to operate an NHL team at Copps. That means any plans Vancouver developer Tom Gaglardi may have had to put together a group to buy the Atlanta Thrashers and move them to Hamilton are finished.
In the meantime, the Coyotes are not getting much love from their former owner and the site in Glendale, where their arena is located.
Westgate City Center, an entertainment and shopping complex owned by Steve Ellman, who was rescued and then pushed out of the Coyotes ownership by Moyes, refused to play host to a Save The Coyotes rally scheduled for Saturday. The organizers were forced to reschedule the rally at another site in Glendale.
Nicole Trainor, a spokeswoman for Westgate and Ellman, did not respond to a request for comment.
Around the NHL, people were questioning claims made by both sides in what is quickly developing into an intense legal battle.
There are those who wonder just how serious the offer for the Coyotes the NHL claims it has from Chicago White Sox and Chicago Bulls owner Jerry Reinsdorf is.
NHL deputy commissioner Bill Daly called it an "expression of interest in the form of a letter of intent," which makes it a lot less than a solid offer.
The details of that bid are in a court filing the NHL made last week which is sealed because it contains financial information. The Coyotes asked bankruptcy court judge Redfield T. Baum to make the document public and the league objected. The judge will decide that issue next Tuesday as well.
Sources say Reinsdorf is willing to put up between $125-million and $130-million (U.S.) for the Coyotes and assume some debt, which does not leave anything for Moyes once the creditors are paid. One source said the offer is contingent on the league finding another owner within one or two years or it will take back the team.
However, one associate of Reinsdorf's doubts he is seriously interested in buying the Coyotes. "He's not stupid," the source said.
The Chicago Tribune also reported that an anonymous associate of Reinsdorf said he "has misgivings" and may not follow through on his letter of intent.