It was a long-winded, confusing, hilarious and largely pathetic piece of civic theater, but after more than four hours of debate, the Glendale City Council voted 4-3 to approve a lease agreement that's expected to keep the Phoenix Coyotes in Arizona. The team will be renamed the Arizona Coyotes as part of the new agreement.
Renaissance Sports and Entertainment, the group purchasing the team from the NHL, will be paid $15 million per year for 15 years by Glendale to run the city-owned Jobing.com Arena, home of the Coyotes. RSE has an out-clause after five years which they can exercise if losses reach $50 million over that term. Several council members pushed for an equal out-clause that the city could exercise, but the NHL would not have approved the sale of the team to RSE. It was a deal-breaker, and the council voted against it for that reason.
The deal is still pending NHL approval, but with the terms of this lease agreement now accepted by the city, that is considered merely a formality. Gary Bettman was in attendance and spoke briefly -- and also much more subdued than usual -- during the meeting, but no statement was given by the league after the vote. RSE has until Aug. 5 to complete the purchase of the team from the NHL, which has owned the Coyotes since 2009.
Mayor Jerry Weiers pushed late in the meeting to keep the city's out clause in the deal, equating the lack of an out-clause for the city to stepping in front of a truck and relying on somebody else to pull one back to safety.
"I am still uncomfortable that we're taking on all the risk," Weiers said. City attorney Nicholas DiPiazza elaborated on that risk.
"The city should have a similar out if they lose $50 million," DiPiazza said, "which would be $10 million per year on average or $4 million above [Glendale's] budgeted loss [of $6 million per year]. What if the revenue projections don't match the budget, and what if the team doesn't leave? Doesn't use it's out? Then those losses continue for the 15-year term of the agreement."
Glendale was in a tough position either way. Had they failed to vote in favor of the agreement, the team would have almost certainly left for Seattle or Quebec City, and many painted a doomsday scenario for businesses in Glendale's Westgate City Center in the event the team would move.
Councilmember Ian Hugh was a vocal voice of dissent, opining about the guaranteed $15 million payments the city would owe RSE to run the arena. He talked of cuts to police and fire departments and misplaced priorities. Councilmember Sammy Chivera was the swing vote. A firefighter himself, he inexplicably compared RSE's Anthony LeBlanc's "heroism" in purchasing the team to that of a firefighter.
Global Spectrum, the Philadelphia-based venue management firm, will partner with RSE to run Jobing.com Arena.