Part VI Phoenix Coyotes post bankruptcy

[Confucius]

I do find it interesting that in the information coming forward the last couple of days, the nhl states, Glendale has until the end of December to find a local owner. Has the NHL stopped searching and left it all up to the city?

 

[peter sullivan]

if they are able to set up the conditions of reinsdorf's MOU, one of the two groups will take ownership in my opinion...that deal is too sweet to pass up....the big question is can they set all of that up and clear all the legal hurdles in the next 7 months.

why they didnt do it over the last 12 months is beyond me but i guess all we can do is sit back and watch the soap opera unfold.

 

[Jesus Christ Horburn]

The one good thing about the NHL's decision:

7 more months of reading these threads

We'll be at part XX by the time this is over.

 

[Dado]

7 more months of reading these threads

I'm not so sure.

Not saying that "someone" might have "suggested" it to me...not saying not, either...

Since it can take six months to finalize a deal like this, and we're not much more than six months from the "kiss-off, we're going to Winnipeg" deadline...is it possible this "agreement" will NOT be signed and will in fact be meaningless unless CoG can get an actual signed framework of a deal in place with Reinsdorf or IEH in the next 4 weeks?

Just putting it out there...

 

[TheLegend]

it is very openly a subsidy to cover losses..they didnt try and hide that....their strategy is either that the $25m wont come from the public purse or that it is not grossly disproportionate to the losses they would incur if they didnt pay it.

which brings me back to the parkade money...where did it come from?

IIRC... it came from Steve Ellman. Westgate's developer.

Was talked about briefly during the later stages of the BK procedings, but I can't remember exact details other than it's been sitting in an account for some time.

 

[Tommy Hawk]

IIRC... it came from Steve Ellman. Westgate's developer.

Was talked about briefly during the later stages of the BK proceedings, but I can't remember exact details other than it's been sitting in an account for some time.

Someone mentioned parking garage but if it has been targeted for a specific use and it is in an escrow account, you can't just dissolve those things and use the money for something else. There is probably some type of agreement in place dictating the use of those funds and would require both parties to sign off on it and that may also face legal hurdles.

 

[Crazy_Ike]

I do find it interesting that in the information coming forward the last couple of days, the nhl states, Glendale has until the end of December to find a local owner. Has the NHL stopped searching and left it all up to the city?

The NHL never stops searching, even when there isn't a team for sale. It's a big part of what that big fancy New York office is for.

They are telling the city that there is a drop dead date for getting their ducks in a row.

 

[Jeffrey93]

The NHL never stops searching, even when there isn't a team for sale. It's a big part of what that big fancy New York office is for.

They are telling the city that there is a drop dead date for getting their ducks in a row.

Is this setting up a mid-season relocation announcement and basically making it certain that the financial guarantees Glendale had to promise will definitely be required to be paid out?

 

[Killion]

i just find it hard to believe they won't find a local owner in that amount of time.

Coyotes have been "up 4-sale" for how long now?. Im tempted to bid myself at this point & in light of whats being offered...

 

[smokes]

I'm not so sure.

Not saying that "someone" might have "suggested" it to me...not saying not, either...

Since it can take six months to finalize a deal like this, and we're not much more than six months from the "kiss-off, we're going to Winnipeg" deadline...is it possible this "agreement" will NOT be signed and will in fact be meaningless unless CoG can get an actual signed framework of a deal in place with Reinsdorf or IEH in the next 4 weeks?

Just putting it out there...

Flesh this out a bit more, Dado (not that you know anything, of course...)

 

[Killion]

Ho do you sue for "intent" without turning it into a "nuisance suit"?. You guys' seem to think the GWI is some sort of Ken Dryden-Ralph Nader Holier than Thou Watchdog Group with a Sterling Reputation?. Your confidence is both misplaced & naive. No doubt, I'll be pilloried for my position, but c'mon?. What can they do short of trading their very "Mission Statement" BUT go along with this?. The harm is worse than the bite.

 

[DeathToAllButMetal]

The NHL never stops searching, even when there isn't a team for sale. It's a big part of what that big fancy New York office is for.

They are telling the city that there is a drop dead date for getting their ducks in a row.

Why would Glendale even take that seriously? How many "drop dead" dates have there been now? June 30 was supposed to be the final deadline, too.

 

[DeathToAllButMetal]

Ho do you sue for "intent" without turning it into a "nuisance suit"?. You guys' seem to think the GWI is some sort of Ken Dryden-Ralph Nader Holier than Thou Watchdog Group with a Sterling Reputation?. Your confidence is both misplaced & naive. No doubt, I'll be pilloried for my position, but c'mon?. What can they do short of trading their very "Mission Statement" BUT go along with this?. The harm is worse than the bite.

Is it? Where's the proof? Glendale can't just say "well, otherwise we'll lose a gazillion dollars!" and cast a spell over the court. If it were that easy, every municipality in Arizona would be doing this to give bonuses to companies. Hell, we'd be doing it here in Ontario right now, as well, but we've got even tougher rules against bonusing.

 

[Scottrocks58*]

This made me laugh. I especially enjoy the way that three indirect benefits are listed (sales tax, income tax, property tax). Everything mentioned in this post is invalid and also in direct contradiction to the Turken v Gordon ruling. Including the term "legally" is the punchline.

From Turken v. Gordon:


But, more importantly, the argument conflates the different
requirements of the Gift Clause and the statute. The
Constitution requires that the consideration received by the
City not be grossly disproportionate to the amount paid to the
private entity. The statute imposes a separate and additional
requirement – municipalities entering into tax incentive
agreements must certify that the anticipated increase in tax
revenues exceeds the proposed expenditure. A.R.S. § 9-
500.11(D)(1). The statute may be satisfied even though tax
revenues are not consideration for Wistuber purposes.
Conversely, even when a transaction meets the second Wistuber
prong, the statute requires more – that anticipated tax revenues
exceed any expenditure.

¶42 Thus, the remaining question is whether the $97.4
million that the City has promised to pay far exceeds the value
of the parking places promised in return. Turken has conceded
that $97.4 million might well be a fair payment for exclusive
use of 3,180 spaces over the next 45 years. The Parking
Agreement, however, gives the City exclusive use of only 200
spaces.
Nothing in the Agreement prevents CityNorth customersfrom
filling up the other 2,980 spaces when other members of the
public might most want to use them.


The question for the courts in the case of the Coytes is whether the opportunity to maintain an NHL team within the confines of Glendale this season with the opportunity to make its location permanent is worth the payment of up to 25 million. Glendale has documented the value to the city at 500 million and has expressed the belief that those losses due to a relocation would not be recoverable due to the limitations imposed by the bankruptcy acts. It is a "spend 25 in an effort to protect 500" argument which the court would have to look at to decide, first, if that is a direct benefit (which Glendale obviously believes it to be) and second, whether that protection is worth the outlay of up to 25 million. As I noted, Glendale has documented in detail the cost to the city in losing the NHL franchise to another city.

 

[peter sullivan]

^are you reading something im not?.....documented in detail?...i see one line with a seemingly well rounded off number of half a billion...it even sounds made up.

it would seem logical that any court could only rule on the benefits of this contract specifically and not a theoretical one that may or may not occur in the future. This contract gives them one more year and that is it. Why not claim losses for the next 100 years? This is a contract with an owner obliged to keep the team in glendale for one season only and that has to be the parameters of the financial discussion.

 

[smokes]

The agreement, obtained by the Globe and Mail, also states Glendale can only keep the Coyotes after Dec. 31 if it finds a local buyer and the NHL has "not yet entered into an agreement to sell the team in a non-Glendale sale and the city identifies a prospective bona fide purchaser."

Read more: http://www.cbc.ca/sports/hockey/story/2010/05/22/sp-winnipeg-coyotes.html#ixzz0oifUW4Je

Not trying to read anything into this agreement, but what happens if the NHL enters into an agreement to sell the team in a non-Glendale sale before Dec.31? What happens if the NHL enters into an agreement with TNSE on July 1, 2010? Does the agreement specify when the NHL can enter into an agreement with a party who would relocate?

 

[Killion]

Why would Glendale even take that seriously? How many "drop dead" dates have there been now? June 30 was supposed to be the final deadline, too.

Do note the "Crazy" part of "Crazy Ike" Todd. So sorry the NHL moved from Montreal' to Manhattan. Ziegler & Co. authored Phoenix et al. Get over it. Bettmans' a Lawyer following instruction; damn fine one at that. Gives a good name to the profession despite his smugness/arrogance. I wish my council was equally adept & light footed.

 

[Scottrocks58*]

So, is the continuation of having the anchor tenant at jobbing.com arena remain rather than immediately leave, as would undoubtedly be the case should the city not pay up, be considered a tangible rather than indirect benefit, and if tangible, would it be worth the "up to 25 million dollars" which the city would pay for such a benefit? I can only hope so, but have no idea. For the life of me, I can't understand why the city didn't immediately cut a deal on a less onerous AMULA for Reinsdorf or IEH? I doubt a court would argue with the economics that 80% of the former rent is better than no rent at all, given that supplies of arenas are greater than demand for NHL arenas, but Glendale wants to keep that AMULA intact and work around it instead of modifying it.

 

[Killion]

So, is the continuation of having the anchor tenant at jobbing.com arena remain rather than immediately leave, as would undoubtedly be the case should the city not pay up, be considered a tangible rather than indirect benefit, and if tangible, would it be worth the "up to 25 million dollars" which the city would pay for such a benefit? I can only hope so, but have no idea. For the life of me, I can't understand why the city didn't immediately cut a deal on a less onerous AMULA for Reinsdorf or IEH? I doubt a court would argue with the economics that 80% of the former rent is better than no rent at all, given that supplies of arenas are greater than demand for NHL arenas, but Glendale wants to keep that AMULA intact and work around it instead of modifying it.

Inflexibility & fright?. Goodness Knows Scott?. Seems to me their was a quiet, leafier & shadier path to tread than the one taken. Balsillie/Moyes certainly turned a rock or two over, doing neither themselves nor the club's any favors. Is it worth throwing good money after bad or do we take the stance that absent decent on-ice/mgmnt/ownership Phoenix will respond to a "breath of life?"...
Clearly, the COG & the NHL is betting on it, now, its up to YOU guys to make it happen. These permutations of law have a limit no?...

 

[kdb209]

The agreement, obtained by the Globe and Mail, also states Glendale can only keep the Coyotes after Dec. 31 if it finds a local buyer and the NHL has "not yet entered into an agreement to sell the team in a non-Glendale sale and the city identifies a prospective bona fide purchaser."

Read more: http://www.cbc.ca/sports/hockey/story/2010/05/22/sp-winnipeg-coyotes.html#ixzz0oifUW4Je

Not trying to read anything into this agreement, but what happens if the NHL enters into an agreement to sell the team in a non-Glendale sale before Dec.31? What happens if the NHL enters into an agreement with TNSE on July 1, 2010? Does the agreement specify when the NHL can enter into an agreement with a party who would relocate?

The NHL is permitted to negotiate with third parties and enter into agreements with them before Dec 31, but cannot consummate a deal before then.

I assume that the NHL will have a deal in their back pocket on Dec 31 and if Glendale has not closed on a deal - or at least have gotten the League to sign off on a LOI (which would grant exclusivity) - by then, then the League would likely pull the trigger.

 

[MAROONSRoad]

I haven't had time to read through all of this thread, but one provision of the new so-called 2010-2011 Arena Management and Operations Agreement struck me, amongst several others that did, namely, clause 2.7.

Just like a gambler that has lost his shirt, it appears the COG wants to play "double or nothing" with $25 MM large ones.

According to clause 2.7, the COG wants the NHL to try to find a buyer that will not only a) pick up the NHL's expenses for buying the franchise and all of the NHL losses from this year ($160 - $170 MM), but also b) pick up any of the COG's losses in relation to their $25 MM subsidy.

Not sure if that's realistic, but that just raised the cost for the purchase of the Coyotes for a local buyer by likely several million dollars. Are these people being realistic at all?

See here:

http://beta.images.theglobeandmail.com/archive/00660/Glendaledocs_pdf_660002a.pdf

GHOST

 

[Dado]

Flesh this out a bit more, Dado (not that you know anything, of course...)

I just can't help thinking...if this is all what it is supposed to look like, how come there hasn't been an official definitive statement from either the NHL or CoG that the team is staying in Phoenix next season?

If the statement doesn't come Monday morning, it's time to get on the phone and start pestering Bettman/Daly to "flesh this out a bit more".

 

[Le Golie]

I haven't had time to read through all of this thread, but one provision of the new so-called 2010-2011 Arena Management and Operations Agreement struck me, amongst several others that did, namely, clause 2.7.

Just like a gambler that has lost his shirt, it appears the COG wants to play "double or nothing" with $25 MM large ones.

According to clause 2.7, the COG wants the NHL to try to find a buyer that will not only a) pick up the NHL's expenses for buying the franchise and all of the NHL losses from this year ($160 - $170 MM), but also b) pick up any of the COG's losses in relation to their $25 MM subsidy.

Not sure if that's realistic, but that just raised the cost for the purchase of the Coyotes for a local buyer by likely several million dollars. Are these people being realistic at all?

See here:

http://beta.images.theglobeandmail.com/archive/00660/Glendaledocs_pdf_660002a.pdf

GHOST

Offloading this albatross will definitely not be easy for the COG.

 

[Dado]

Read more: http://www.cbc.ca/sports/hockey/story/2010/05/22/sp-winnipeg-coyotes.html#ixzz0oifUW4Je

According to that article, it's back to a CFD for the $25M.

 

[MAROONSRoad]

According to that article, it's back to a CFD for the $25M.

No need for hockey fans. Put some CFDs in those empty seats and suites. Might it work?

GHOST