GLENDALE, Ariz. — The Glendale City Council has voted to end an arena lease agreement with the Arizona Coyotes, thrusting the franchise’s future further into doubt.
The council voted 5-2 Wednesday night to end a 15-year, $225 million lease agreement signed by Glendale and IceArizona shortly after the team was purchased from the NHL in 2013.
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Members who voted in favour of dissolving the deal cited a state statute that allows an agency to cancel a contract if an employee directly involved with the agreement becomes an employee or agent to the other party. At issue was the Coyotes’ hiring of former city attorney Craig Tindall as general counsel in 2013.
"We’ve all taken a beating tonight here, and I think it’s all unjust because most of the fans don’t understand the complexity of this issue," Glendale mayor Jerry Weiers said before being interrupted by several Coyotes fans in attendance. "The complexity of this issue is the fact that you don’t have all the information. When you have more information, I think you will have a better understanding."
The city of Glendale issued a statement before the meeting that it would be open to renegotiating the arena deal, a proposal the Coyotes flatly refused.
Nick Wood, the Coyotes' outside counsel, said the team will file for injunctive relief, a temporary restraining order, and file a $200 million lawsuit against the city.
"At this point the damage has been done," Wood said. "How do we negotiate our way out of being shot in the head by the city?"
Tindall stepped down from his duties at Glendale in April 2013, three months before IceArizona signed its lease agreement deal for the Glendale Arena, then known as Jobing.com Arena. Tindall was paid through September as part of his severance agreement, but was hired by the Coyotes a month earlier.
Wood, Coyotes co-owner Anthony LeBlanc, and many of the citizens who spoke during the public forum portion of the session derided the council for trying to use a loophole to renegotiate two years into a 15-year deal.
The Coyotes also said that just calling for the vote has had a detrimental effect on local businesses and the team, from spooking sponsors, chasing away potential free agents and a possible bid for the 2017 Junior World Hockey Championships.
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LeBlanc and Andrew Barroway, who owns 51 per cent of the team, met with Glendale officials on Monday, when LeBlanc said the issue of renegotiating the deal first arose. LeBlanc said the team will continue to operate as if the deal had not been broken while trying to build a winner in the desert.
"What we have witnessed here tonight is possibly the most shameful exhibition of government I have ever witnessed," LeBlanc said. "The citizens of Glendale should be very concerned about the government that they have leading them right now, because this was not appropriate."
The Coyotes have seemingly been in limbo since former owner Jerry Moyes took the team into bankruptcy in 2009.
The franchise was operated by the NHL for four years while several potential owners came forward and fell back, sparking constant speculation that the team would be relocated.
The Coyotes seemed to gain some stable ground in 2013, when IceArizona, led by LeBlanc and George Gosbee, purchased the team from the NHL. The group negotiated the deal for the arena, then known as Jobing.com Arena, with Glendale later that year and worked out a nine-year naming-rights deal with Gila River Casinos in 2014.
The franchise seemed to gain a stronger financial foothold last year when Barroway, a successful hedge fund manager from Philadelphia, purchased a 51 per cent stake in the team.
Still, the franchise continued to be hit with relocation speculation, and last week some council members raised concerns that IceArizona was using money earmarked for operating the arena to pay down the debt incurred from purchasing the team.
LeBlanc believed those concerns were a non-issue, particularly since the team no longer uses the same lender, but the Coyotes and the NHL were caught off-guard after Glendale called for a vote to dissolve the arena deal altogether.
"It's not about hockey," Glendale Vice Mayor Ian Hugh said. "It's about the integrity of the process."