A revised agreement on an arena lease for the Phoenix Coyotes will be presented to councillors for the suburban city of Glendale on Tuesday with reduced payments to prospective owner Greg Jamison over the first five years.
The original 20-year lease was front-loaded with $97-million (all currency U.S.) in the first five years going to Jamison and his partners, which now include Ice Edge Holdings LLC, a group of Canadian and American businessmen. But acting city manager Horatio Skeete negotiated a reduction of the payments in the first five years to about $72-million, with the payments in the final 15 years being raised to keep the overall cost of the lease to the city at $324-million. The payments are officially for Jamison to manage Jobing.com Arena.
Originally, Jamison was to receive $17-million in the 2013 fiscal year, the first year of the lease, but that is expected to drop to around $12-million or $13-million.
However, even if Glendale council agrees to the revised lease, the sale of the Coyotes by the NHL for $170-million is not a sure thing. It will be conditional on Jamison and his partners raising additional money, somewhere between $20-million and $40-million, to cover the annual losses of the Coyotes. The team, which wound up in the NHL's hands when it went bankrupt in 2009, has never turned a profit since moving into Jobing.com Arena in 2003.
Glendale, a city of 250,000 people, was hit hard by the recession, which decimated the sales-tax revenue it expected to pay for its expensive foray into building arenas and stadiums to attract professional sports teams. It was forced to lay off dozens of city employees and cut services in order to deal with a $35-million budget deficit for fiscal 2013.
The city is also facing the loss of a city sales-tax increase in November's municipal election. The increase, which was hoped to produce at least $22-million for the city in the coming fiscal year, will be placed on the ballot and is expected to be turned down by the voters.
An agenda posted on Glendale's web site says city staff "is seeking guidance from City Council on proposed modifications to the Arena Management Agreement" with Jamison for Jobing.com Arena, which is owned by the city. Jamison needs the money promised in the lease to complete his financing plans to buy the Coyotes.
Outgoing Glendale councillor Phil Lieberman expects council to be presented with a revised deal that lowers the payments in the first five years and raises them in the final 15. But he admitted he does not know what Jamison and Skeete agreed to this week. They met on Tuesday along with Anthony LeBlanc, the leader of the Ice Edge group, Skeete announced Thursday they reached an agreement.
"I have no idea," Lieberman said of what he expects to see in the new lease agreement. "The city is so screwed up nobody knows what's going on."
Jamison could not be reached for comment.
Since council's session on Tuesday is a workshop and not a regular meeting, the councillors will not formally vote on the revised lease. That is expected to come on Oct. 9, the next scheduled public meeting.
After the November election, it is expected the Tohono O'Odham Nation will emerge as Jamison's key lender or equity partner. The native tribe is currently in a court battle with Glendale over its plans to build a resort and casino adjacent to the suburban community.
But with Glendale Mayor Elaine Scruggs and several other councillors opposed to the tribe's plans not running for re-election, it is expected the new council will be more receptive to the Tohono nation's involvement with the Coyotes.