Wednesday, December 15, 2010
Glendale pays Matthew Hulsizer to buy the Phoenix Coyotes
What a bizarre set of events that have become the legacy of the Phoenix Coyotes and it's not over yet. Tuesday night Glendale City Council voted 5-2 in favour of a $197 million 'sweetener' to entice the Coyotes to sign a new, long-term lease for Jobing.com Arena. The city basically had no choice but to fold, unless it wanted to see the $180-million, seven-year-old arena it built for the hockey team sit empty while still paying considerable sums of money to maintain it. If you want to know what the definition of a White Elephant is, how about an empty 17,000 seat arena in the middle of a desert.
The final purchase price of the Coyotes will likely be about $170 million so Hulsizer will walk into the deal with some spending money courtesy of Glendale taxpayers. And don't think the NHL makes money on the deal. They bought the team from Jerry Moyes for $140 million but who knows how much money the other owners sunk into the team to keep it afloat.
So now the City of Glendale has sunk $400 million into their White Elephant. So what did they get for their $197 million? Well $100 million bought the right to collect parking fees for the 5,500 spots around the arena for the next 30 years. For another $97 million they are paying Holsizer to manage the arena over that period. However, let's not overlook the fact that Glendale will be collecting rent from Holsizer. I'm sure the rent and parking fees will easily cover the interest on the $400 million borrowed to bring the Coyotes to Glendale.
But what choice did Glendale have with the NHL threatening to move the team to Winnipeg if a lease agreement wasn't reached? The deal was done despite the Goldwater Institute, a government watchdog group, warning Glendale City Council that it opposed the deal. In the past, the Goldwater Institute successfully sued Arizona municipalities under the state’s gift-clause law for handing over too much public money to private enterprises so this may not be over yet.
No doubt the Institute thinks the city overpaid. Who would argue that they didn't?