Report: Glendale exploring possibility of voiding arena deal with Coyotes
City officials in Glendale, Ariz., are losing patience with the Arizona Coyotes.
Glendale city council members are looking into the possibility of getting out of their arena contract with the NHL club, TSN.ca's Rick Westhead reports.
The current agreement requires taxpayers to funnel $15 million per year to the club over 15 years, but city officials claim that money isn't going toward managing Gila River Arena.
From the report:
When the city council in Glendale voted to give the owners of the Coyotes $225 million (all U.S. dollars) over 15 years, the money was supposed to be used by the team to manage the 12-year-old Gila River Arena, where the Coyotes play their home games.
The deal helped narrow the losses of a club that sports investment bankers say is a perpetual money loser, bleeding some $50 million or more per year.
But nearly two years after council approved the controversial pact, city officials claim the money that cash-strapped Glendale is paying to the team's owner IceArizona is instead going directly to Fortress Investment Group, the New York-based asset manager which financed holding company IceArizona's purchase of the Coyotes.
Glendale vice mayor Ian Hughes said using taxpayer funding to pay down debt rather than for arena management constitutes a breach of contract. Hughes wants to convince his fellow council members to look into whether the city can extricate itself from the deal.
"The taxpayer got the short end of the stick," Hughes told Westhead. "If they call this an investment, you'd think there would be a possible return. I'm hard-pressed to see the benefits to the city of Glendale."
A source told TSN.ca that misreporting financial losses could also be considered a breach of contract, and a consultant delivered a confidential report to Glendale city auditors alleging the NHL team has done exactly that.
Meanwhile, Hughes and Glendale mayor Jerry Weiers said neither of them has been able to land an in-person meeting with new Coyotes owner Andrew Barroway in Arizona.
An NHL owner, speaking on the condition of anonymity, told Westhead that he could see the Coyotes relocating to a certain city that is building a new facility.
"I think it leaves us with Las Vegas as our best alternative," the owner said. "I could see them moving the Coyotes there when the new arena is done."
Earlier this month, an MGM executive told the Las Vegas Review-Journal that the league will vote on expansion to the city in September.