Hours after the Arizona Coyotes held a positive town hall where CEO Anthony LeBlanc said ownership had a “good meeting” with Glendale City Council, the organization was blindsided by news the council called a special meeting to vote on prematurely ending a 15-year agreement with the club.
The agreement pays team ownership $15 million per year to run Gila River Arena, which is leased from the city.
“Unbelievable,” one Coyote said. “It never ends.”
Scheduled for Wednesday night (as the Chicago Blackhawks and Tampa Bay Lightning compete in Game 4 of the Stanley Cup Final), the vote tosses a stunning wild card into the team’s future.
According to several reports, council is trying to void the deal on an Arizona statute indicating it “may, within three years after its execution, cancel any contract, without penalty or further obligation … if any person significantly involved in initiating, negotiating, securing, drafting or creating the contract … is, at any time while the contract or any extension of the contract is in effect, an employee or agent of any other party to the contract in any capacity … with respect to the subject matter of the contract.”
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That would indicate the dispute involves Craig Tindall, who resigned as Glendale’s city attorney in February 2013, although there are reports he was kept on retainer until September. According to this Arizona Republic story, Tindall joined the Coyotes as general counsel in August. Lease negotiations began in May.
Maybe -- and this is purely a guess -- Glendale’s politicians are going to think this overlap led to a conflict. Who knows?
What we do know is the Coyotes are going to fight this, and hard.
They released a statement quoting outside counsel Nick Wood as saying, “This is a blatant attempt to renege on a valid contract that was negotiated fairly and in good faith and in compliance with all laws and procedures. In the event the city council initiates any action to revoke, repeal or otherwise rescind the agreement, the Coyotes will immediately take all actions available to them under the law against the City of Glendale.”
Even if the vote goes against the team, you have to believe the battle is just beginning. The Coyotes could decide to go to court, and since I’m still waiting to pass the Arizona Bar Exam, I don't know the case law.
Last month, the Republic reported Glendale expected losses of close to $9 million on Gila River Arena for the fiscal year ending June 30. The team has an “out” clause if it loses $50 million in the first five years of its agreement with the city, but there are still three years to go. This could be a city ploy to renegotiate.
Just when we thought we could forget about this story for awhile, it's been thrown back into the spotlight. Two weeks before the draft and the start of the free-agency period, the timing is terrible.