What in the world is going on in Glendale?

I know several of my readers have been following the Coyotes situation for years but to someone just jumping into might struggle with making sense of it all.

So let’s step back and lay out how we got here:

  • Phoenix Coyotes filed bankruptcy – May 2009
  • NHL settles with Jerry Moyes to take legal control of the Coyotes and assumes all debt – Fall 2009
  • NHL enters active negotiations with Reinsdorf and Ice Edge Holdings  – 2009 to first half of 2010
  • Both Reinsdorf and Ice Edge fail to purchase team and drop out of negotiations – Summer 2010
  • NHL approves the sale of Phoenix Coyotes to investor group led by Matthew Hulsizer – December 2010
  • Hulsizer abandoned his bid for the Coyotes – June 2011
  • Jamison group emerges as the latest group to pursue the Coyotes – August 2011
  • NHL announces tentative agreement with Jamison Group – May 2012
  • Jamison Group agrees to (but does not sign) lease agreement with the city of Glendale – June 2012

(note I am tyring to simplify here and for every bullet, there is about 5 sub bullets)

Ok…that’s the background. In June, the Glendale City Council also approved a sales tax increase that is estimated to raise 22Million for the city. Why is that important to the Coyotes situation? Well, the original lease agreement that the City and Jamison agreed to called for a the city to pay the Jamison group 17 Million a year to operate the jobing.com arena. In effect, the sales tax increase in city revenue was going to help pay for that arena management fee.

Since June, the sales tax increase was challenged by citizens and is now on the ballot in November. This has caused the city council to figure out a contingency plans to come up with the additional 22Million should the sales tax hike get overturned(overturn = a pass of prop 457).  Most of hearings and debates are focused on cutting public services but the Arena deal also gets weaved into the conversation since that is such an easy and big target. To make this muddier than it already is, the City Manager that lead negotiations with Jamison in June has left and a temporary city manager, Horacio Skeete. Skeete was asked to go back to Jamison to rework the deal because of fear of the tax hike and although not explicitly, the impacts to the lockout. Jamison and Skeete have reworked the deal to lower the operating fee the first few years from 11M (originally 17 Mil) and ramping to 16M in year 5. The city council has not approved this deal and has requested some public feedback. Oh and by the way, the Mayor seat is up for election which makes the Sales Tax hike and Arena deal front and center on the issues. Neither candidate is fond of the how the Sales Tax increase was implemented but the city is in a financial mess so hard decisions needed to be made. It isn’t easy to figure out how the candidate will address the issue when voted in but that issue should be resolved by the time they take office.

It is a little shocking to me that the city is willing to fork out 15+Million a year to the Jamison group to run the arena. From one of the recent city council meetings, the city would lose 2.5 Million in sales tax revenue should the arena close all together. So right now, we don’t have an approved lease agreement with the Jamison group which also begs the question if Jamison can raise the money under these less favorable terms when just 3 months ago he was allegedly struggling to find investors.

How this thing ends is anyone’s guess. Things will get clearer in November but we have this whole lockout thing going on that probably makes and prospective NHL Franchise owner a little skittish. 8 months ago this franchise seemed destined for Quebec City but I’ve probably said that several times over the last few years.

Now I am not rooting against Glendale keeping the team and I feel for the fans first in this whole mess. In spite of all the haters and traditionalists out there, I am convinced hockey can work in non-traditional places, look at Nashville, Carolina and Dallas for examples. But there is a time where someone must realize that businesses might not work in certain locations, even Starbucks and McDonalds need to close certain locations.

2 thoughts on “What in the world is going on in Glendale?

  1. Being originally from the Phoenix area, it’s patently obvious why the Jobbing.com arena deal is teetering on the brink. Years of sweetheart deals for Jerry Colangelo to build the Suns and the Diamondbacks stadiums have left a public loathe to pay for anymore sports welfare. Additionally, the demographics and distance to Glendale are completely wrong for hockey. People will travel once a week to the west side to tailgate for a Cardinals game on Sunday, but it’s a lot to ask for 41 home games. The original idea of putting the arena on the border of Tempe/Mesa/Scottsdale at the Los Arcos site would’ve been perfect, but the developers couldn’t come to financial terms back in 2000.

    I’ve been secretly rooting for the Coyotes deal to fall through and for them to relocate to Seattle, but the whole sordid affair is just one charlie-foxtrot after another.

  2. The biggest thing I hear about jobbing.com is the location which you hit on. Tough to motivate long drives for the masses when hockey is a new sport to a lot of folks down there. I still don’t understand why Glendale would want to keep the team so much that they would be willing to increase taxes and cut services. I know they wouldn’t be the first (or last) to offer a huge subsidy to an Arena plan but most cities aren’t in Financial dire straits like Glendale is in right now.

    I feel for the fans. Even if it is a small fan base, I hate seeing any city lose their team just because I know there are folks down there that are diehard fans that could lose their team.

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