The Glendale, Arizona city council released the details of the proposed lease agreement they are being asked to sign in order to keep the Phoenix Coyotes playing at Jobing.com Arena, and ohmigod is it awful for Glendale taxpayers.
Glendale would pay Renaissance Sports and Entertainment (RSE) $15 million a year for 15 years to manage the arena. That's about $8 million a year more than the council had already budgeted. To offset this hit to the city's already precarious budget, RSE has proposed a package of revenues going back to the city estimated at $6.7 million a year. But part of that revenue isn't new, and none of it is guaranteed. If the revenues don't come in as high as RSE estimates, Glendale is fucked—there is no option for the city to back out of the 15-year contract. RSE on the other hand can break the lease after five years if cumulative losses exceed $50 million. That's not so high a bar considering the team lost an average of $20 million annually in recent years.
Not surprisingly, the city says it still has a number of “unresolved serious concerns” with the proposal. RSE insists that it needs the $15 million a year from the city in order to secure the loans it needs to buy the team.
The NHL had given the city a July 2 deadline to come to terms with RSE, or else it would move the team, a threat reiterated today by NHL commissioner Gary Bettman:
"I don't want to be more specific than I'm going to be, but if the council doesn't approve it so this transaction can close, I don't think the Coyotes will be playing there anymore," Commissioner Bettman said following a Board of Governors meeting.
Should the city council reject the proposal, Commissioner Bettman said there is enough time to relocate the Coyotes for the start of the 2013-14 season. NHL Deputy Commissioner Bill Daly said no matter where the team plays, the NHL's new unbalanced, two-conference, four-division alignment would not change.
... The possibility of the team moving to Seattle has been widely reported. Daly said the NHL would be able to have a team play in 51-year-old Key Arena next season.
Daly wouldn't rule out the possibility of moving the team to Quebec, but that comment about the new two-conference alignment sure does suggest it would be easier to keep the team out west.
In any case, it looks like we may really, really know about the fate of the Coyotes by Tuesday, a fate that really does include the possibility of playing in Seattle. That said, as shitty as the RSE's proposed deal is for Glendale taxpayers, the city may have no other choice. Losing the Coyotes would transform Jobing.com arena into a costly white elephant, while driving a final spike through businesses in the already struggling entertainment and shopping complex that it anchors. We'll soon see.