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Glendale in last-minute talks with Ice Edge to keep Coyotes in desert

Fans of the Phoenix Coyotes react after being defeated by the Detroit Red Wings in Game 7 of the Western Conference Quarter-finals.

Christian Petersen/2010 Getty Images

As fans in Winnipeg held their breath about the possibility of the return of their former NHL team, officials from the city of Glendale talked to Ice Edge Holdings LLC about reviving their arena-lease proposal in a last-ditch effort to hang on to the Phoenix Coyotes.

Glendale officials would like to have a new memorandum of understanding with Ice Edge, a group of Canadian and American businessmen, ready in time for Tuesday's city council meeting. The proposal could then be discussed and voted on by the council, which rejected a deal with Ice Edge last month by a 5-1 vote and accepted one from Jerry Reinsdorf by a unanimous 6-0 vote.

Glendale turned to Ice Edge again when negotiations over a formal lease agreement for Arena broke down with Reinsdorf, the owner of the Chicago Bulls and Chicago White Sox.

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It looks as though municipal officials and Ice Edge now have an exclusive agreement.

The problems with the Reinsdorf proposal were his demand for an escape clause after five years if the club did not make money and the enormous subsidies the lease called for from bonds and levies in a "communities facilities district" created around the arena.

A source familiar with the lease negotiations said a decision by Ice Edge to drop a demand from its original proposal that the city guarantee its bank loan is helping the latest round of talks. Bill Daly, deputy commissioner of the NHL, said the league has not agreed to guarantee any loans for Ice Edge.

In the meantime, the agenda for Tuesday's meeting showed city manager Ed Beasley is negotiating with the NHL, which owns the team, to keep the Coyotes in Glendale for one more season. Council will be asked for a for a 'consent vote' that Beasley can negotiate whatever is needed to conform to "NHL guidelines" to prevent the team from moving next season. The NHL can legally break the arena lease and move the team June 30 if no buyer is found. No details were given but it looks like the NHL wants the situation wrapped up in a few weeks so Winnipeg will know soon if it will be back in the NHL.

However, there are indications Ice Edge, with the support of the NHL, wants the city to cover the club's operating losses, which would create more problems with Arizona laws that do not allow public money to be used excessively to prop up failing private businesses.

There were reports the NHL is ready to turn to Canadian billionaire David Thomson and his partner in the MTS Centre in Winnipeg, Mark Chipman, if the sale to either Reinsdorf or Ice Edge falls through. A report from the CBC says Chipman and Thomson will get financial help from the Manitoba government for the purchase, which is said to be $165-million (all currency U.S.). Thomson and Chipman have talked to the NHL about buying the Coyotes and moving them back to Winnipeg, 14 years after the Jets went south to become the Phoenix Coyotes.

Chipman's company, which operates the arena in Winnipeg and owns the Manitoba Moose of the American Hockey League, issued a carefully worded statement on Friday.

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"We will continue to respect the efforts of all parties involved to maintain the Coyotes in Arizona, including those of the National Hockey League," the statement said. "As we have stated many times in the past, if that situation changes, we are certainly open to reviewing the opportunity with the NHL."

As for Thomson, who would carry the financial burden of buying the Coyotes, the True North statement said "Mr. Thomson is however aware of the situation involving the National Hockey League in Glendale and is very supportive of True North's efforts to return the NHL to Winnipeg, should the opportunity arise."

There is also the possibility that if the Coyotes go back to Winnipeg, the Moose will move to Thunder Bay, Ont. Ice Edge chairman Keith McCullough is from Thunder Bay and has said he wants to bring professional hockey to his hometown.

A source familiar with Glendale council's dealings with the NHL said the league is putting a lot of pressure on the politicians. The league wants the city to agree quickly to a lease agreement with either Ice Edge or Reinsdorf or it will sell the club to someone who would move it, the source said.

Daly denied the league is playing hardball with Glendale. He also said in an e-mail message that "as far as I know there has been no change to the status of the Reinsdorf deal."

However, sources said Glendale politicians were not, in the end, comfortable with Reinsdorf's escape clause. They also knew the demand for almost $47-million a year in bonds and taxes out of a community facilities district around the arena would attract the opposition of groups such as the Goldwater Institute, a conservative watchdog group that has successfully blocked public subsidies by taking cities to court.

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Another source said the biggest obstacle to creating the community facilities district was former Coyotes owner Steve Ellman. He owns almost all the land around the arena in the form of the Westgate City Center retail and entertainment development.

His permission is needed to establish the district but it has not been granted so far, the source said. That may be because Ellman does not have an agreement with his tenants for the right to pass along any new taxes, which would leave him on the hook for any assessments. Ellman did not respond to a request for comment.

Carrie Ann Sitren, a lawyer for the Goldwater Institute, said it is still possible the group may oppose a lease with Ice Edge. Even though Ice Edge is after less of the taxpayers' money than Reinsdorf, Sitren said its original proposal did raise some concerns.

"We are still in a waiting game," Sitren said. "But [opposition to Ice Edge] is definitely a possibility."

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Hockey columnist

A native of Wainfleet, Ont., David Shoalts joined The Globe in 1984 after working at the Calgary Herald, Calgary Sun and Toronto Sun. He graduated in 1978 from Conestoga College and also attended the University of Waterloo. More

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