The NHL and Matthew Hulsizer are making a last-ditch effort to restructure the sale of the Phoenix Coyotes in hopes of overcoming the opposition of the Goldwater Institute.
While no one involved in the talks was willing to divulge any details, it appears the changes involve Hulsizer increasing the amount of money he and his partners will put into the purchase and the NHL reducing its asking price of $170-million (all currency U.S.) or defer payment of the full price. In turn, this would allow the suburban city of Glendale to reduce the amount of the $116-million municipal bond sale that is to provide Hulsizer with much of the purchase price, perhaps by as much as half, to less than $60-million.
One source said it could only be "a few days" before the success or failure of the latest 11th-hour attempt to prevent the Coyotes from moving to Winnipeg will be known. Time is drawing short because the NHL needs to finalize a schedule for next season and another prospective owner, True North Sports and Entertainment Ltd., which wants to take the team to Winnipeg, also needs to know if it will have to move its American Hockey League team, the Manitoba Moose, out of the city.
However, a lawyer for the Goldwater Institute, a privately-funded government watchdog group, said that unless the revised deal addresses the institute's main concerns it will not back off from its promise to block the bond sale in court.
Nick Dranias said Goldwater still believes Glendale has no right to buy the parking rights around Jobing.com Arena as part of the $100-million lump-sum payment to Hulsizer because it already owns them. The Goldwater lawyer also said the $97-million arena management fee Glendale proposes to pay Hulsizer over five years is too high and would not be subject to competing bids.
But Dranias did say, "If they are going to get significantly more private financing and they are going to restructure the [management]fees, we would have to re-examine our position."
When asked if the NHL is willing to lower its asking price for the Coyotes and Hulsizer is willing to top up the $70-million he is putting into the deal, deputy commissioner Bill Daly said in an e-mail message he disagreed with that "characterization." Daly also disputed the notion the deal is being revised to appease Goldwater: "Goldwater is not even a factor in this for us any more. We are not trying to structure a deal to satisfy them. We are trying to structure a deal that can close."
However, even NHL commissioner Gary Bettman admitted Goldwater's opposition "chilled" the bond market. The bond issue stalled when it became clear the bonds would only sell at an interest rate too high for Glendale to afford.
Dranias said the sale of the parking rights has to be taken completely out of the Coyotes deal, especially since the Goldwater Institute obtained a copy of an agreement dated Jan. 25, 2011, between Glendale and three companies controlled by Steve Ellman, the former owner of the Coyotes whose Westgate City Center development surrounds Jobing.com Arena. The agreement gives the parking rights, which include the 5,500 parking spots in the Coyotes deal, back to the city from Ellman. It also notes Ellman's creditors gave their consent.
Dranias brought this up at last week's meeting between Goldwater and Glendale officials, saying it shows Glendale is attempting to buy something it already owns. Glendale officials did not provide a clear answer when Dranias asked why the document was not produced despite court orders for the city to hand over all relevant documents to the sale.
Glendale lawyer Craig Tindall said, "We're in the midst of litigation. Take it up with the judge."
Dranias said Tuesday the agreement shows the sale of the parking rights "is really a sham. [Glendale]is really buying nothing."
All Glendale can buy from Hulsizer, Dranias said, is an iron-clad agreement not to move the Coyotes and a much better "put agreement" than the one in the current deal. The put allows Hulsizer to buy the arena from the city for the lesser of $40-million or any price they agree upon after the lease expires in 30 years.
The trouble is, Dranias added, the NHL can override any relocation agreement between Hulsizer and the city and the parties could agree on a price of zero for the arena. But if they could find a way to make the NHL agree not to ever move the team and guarantee more money for the arena, that might make the bond deal more palatable.