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Phoenix XXVIII: Lawyers, Bonds and Money

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Fugu

Fugu

RIP Barb
Nov 26, 2004
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Continue. Previous thread:

http://hfboards.com/showthread.php?t=889968&page=1

The crux of the matter per GWI:
After studying more than 1,000 pages of city documents, the conservative Arizona watchdog organization said the agreement violates two prohibitions of the state constitution, which requires that no Arizona government “shall ever give or loan its credit in aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation.”
...
The deal poses enormous risks to Glendale taxpayers, who will have to repay the bonds if the team fails again or if parking revenues are insufficient to repay the bonds,” the institute said in a statement. “The institute has urged the city to restructure the deal so that Mr. Hulsizer or another private buyer, rather than taxpayers, bear those risks.”

Citing the state high court’s decision in Turken v. Gordon, the institute said the Coyotes deal is similar in that Hulsizer is not providing roughly proportionate value for the payments he will receive from the city.

Noting the sale of the Buffalo Sabres hockey franchise earlier this year to a private buyer using his own money, Goldwater Institute president Darcy Olsen said: “Deals of this size and scope happen all the time in the private marketplace without putting taxpayers on the line. Mr. Hulsizer certainly appears better equipped to buy this team with his own funds than the taxpayers of Glendale.”
Click to expand...


http://www.bondbuyer.com/news/COURT...RSS&utm_source=twitterfeed&utm_medium=twitter
Click to read more...
 

RAgIn

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Oct 21, 2010
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LeftCoast

LeftCoast

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Aug 1, 2006
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Fugu said:
Do any of you lawyers recall the reason the NHL would leave some of the rights hanging (assuming that's where the parking rights currently reside)? The lawyer-speak is quite thick, but wasn't the original arena management and associated parking rights tied in to Moyes' 30 yr agreement with CoG, which contained that onerous $700m+ penalty for terminating the lease?

By extending the lease under Moyes, the NHL did not have to assume that specific agreement. Moyes agreed to 'not reject' the original lease through 30 June 2010. The week after that date, Moyes estate did reject the AMULA--- but it may have been more than just that portion (I can't find where it's documented). CoG and the NHL then presumably agreed to one more year of the same conditions, not having negotiated a new AMULA.

Thus is it possible that the NHL cannot assume the lease because they need to leave the relocation card open. As soon as they have a buyer for the team, who has negotiated a new lease with CoG, they then can grab [maybe, since we're past Jun 30 '10] the parking rights.

Assuming any of what I've depicted above is accurate, what precluded CoG from taking back those rights since no new lease was negotiated in the stead of the Moyes/NHL-extended lease?
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I had the same question earlier and GSC pointed me in the right direction.

Apparently the parking rights are not a part of the lease (AMULA) but were a part of Ellman's original Mixed Use Development Agreement (MUDA) for Westgate with CoG, and were transfered to Moyes when they split up their interests.

With the bankruptcy, the NHL bought the Coyotes' assets from the estate and acquired the right (not obligation) to assume any contracts / agreements that the Coyotes held (including, the franchise agreement, all players contracts, the lease and the parking rights). Any contracts that were not assumed by the NHL by (IIRC) June 2010 could be terminated by Moyes.

Obviously the NHL did not (and would be foolish to) assume the lease as it would lock them into Glendale. But the parking rights don't have termination penalties, royalties or lock-ins, and would be useful/essential to keeping the team in Glendale, so I would think the NHL did assume this agreement. If the NHL did indeed assume the parking rights, and Jerry Moyes didn't terminate them, the NHL currently owns the parking rights. If Moyes had terminated the agreement, parking rights would (I think) revert back to the City who owns the land.

From my POV, if the City had really valued and desired the parking revenues, they could have obtained them from the NHL for much less than $100M when they agreed to cover the operating losses for the 'Yotes for an additional year. That could have been accomplished simply by the NHL asking Moyes to cancel the agreement. IMO, (and that of GWI) the parking rights are basically being used by the City and the NHL as a mechanism to transfer $100M to Hulsizer.
 
King Woodballs

King Woodballs

Captain Awesome
Sep 25, 2007
39,452
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Fugu said:
Relax? It's been a tough couple of years. Every side has said we're biased and playing favorites.
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hahaha good luck!
you will see 10 threads a day about how winnipeg (if a team moves there) isnt making any money or something of that sort haha
 

RAgIn

Registered User
Oct 21, 2010
900
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Sudbury, Ont
All the way from Washington D.C.:

In a letter sent to the Mayor and Councilmen of Glendale, Americans for Tax Reform president Grover Norquist had this to say:

“Last November voters sent a clear message that they want government to stop frivolous spending and instead focus on core functions…Gone are the days when taxpayers are willing or able to foot the bill for government spending on things like Woodstock museums, cowboy poetry festivals, bridges to nowhere, and NPR. I doubt anyone’s definition of core functions includes subsidizing the millionaire’s purchase of a hockey team.”
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Never heard of the ATR before. Maybe someone can add.

http://www.atr.org/atr-opposes-taxpayer-subsidized-purchase-phoenix-a5949#

Letter: http://www.atr.org/files/files/031111ltr-GlendaleCC.pdf
 
AllByDesign

AllByDesign

Who's this ABD guy??
Mar 17, 2010
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LeftCoast said:
With the bankruptcy, the NHL bought the Coyotes' assets from the estate and acquired the right (not obligation) to assume any contracts / agreements that the Coyotes held (including, the franchise agreement, all players contracts, the lease and the parking rights). Any contracts that were not assumed by the NHL by (IIRC) June 2010 could be terminated by Moyes.

Obviously the NHL did not (and would be foolish to) assume the lease as it would lock them into Glendale. But the parking rights don't have termination penalties, royalties or lock-ins, and would be useful/essential to keeping the team in Glendale, so I would think the NHL did assume this agreement. If the NHL did indeed assume the parking rights, and Jerry Moyes didn't terminate them, the NHL currently owns the parking rights. If Moyes had terminated the agreement, parking rights would (I think) revert back to the City who owns the land.
Click to expand...

The trouble is that even our best experts have not been able to find with any certainty that the NHL adopted this agreement. This may be the card that GW is holding.
 

Antidote

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Jun 8, 2007
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Victoria, BC
Pondering the NFL situation and the arrival of Fehr on the NHLPA scene, how would a strike/lockout in the 12/13 season impact COG if the deal actually goes through? Presumably there'd be much less parking revenue. Would there be an arena management fee if the anchor client wasn't using the facility? Etc. etc.
 
Brodie

Brodie

HACK THE BONE! HACK THE BONE!
Mar 19, 2009
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with the tea party folks and Fox getting in on this, things are looking pretty bleak for Glendale. It's only a matter of time before political and public pressure mount for them to fold.
 
y2kcanucks

y2kcanucks

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Aug 3, 2006
71,229
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Antidote said:
Naw, it makes more sense to send them to Victoria. There are usually enough AHL teams on the brink to choose from for Glendale.
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IIRC, Victoria is more interested in a WHL team than an AHL team. The ideal spot for the Moose would be Abbotsford, but the Heat are currently affiliated with the Flames. I'm still puzzled as to why the Flames would have their farm team so close to Vancouver...their attendance figures are in the toilet, and only spike when the Moose are in town and the entire arena are cheering on the Moose.
 

Fugu

Guest
LeftCoast said:
I had the same question earlier and GSC pointed me in the right direction.

Apparently the parking rights are not a part of the lease (AMULA) but were a part of Ellman's original Mixed Use Development Agreement (MUDA) for Westgate with CoG, and were transfered to Moyes when they split up their interests.

With the bankruptcy, the NHL bought the Coyotes' assets from the estate and acquired the right (not obligation) to assume any contracts / agreements that the Coyotes held (including, the franchise agreement, all players contracts, the lease and the parking rights). Any contracts that were not assumed by the NHL by (IIRC) June 2010 could be terminated by Moyes.

Obviously the NHL did not (and would be foolish to) assume the lease as it would lock them into Glendale. But the parking rights don't have termination penalties, royalties or lock-ins, and would be useful/essential to keeping the team in Glendale, so I would think the NHL did assume this agreement. If the NHL did indeed assume the parking rights, and Jerry Moyes didn't terminate them, the NHL currently owns the parking rights. If Moyes had terminated the agreement, parking rights would (I think) revert back to the City who owns the land.

From my POV, if the City had really valued and desired the parking revenues, they could have obtained them from the NHL for much less than $100M when they agreed to cover the operating losses for the 'Yotes for an additional year. That could have been accomplished simply by the NHL asking Moyes to cancel the agreement. IMO, (and that of GWI) the parking rights are basically being used by the City and the NHL as a mechanism to transfer $100M to Hulsizer.
Click to expand...

AllByDesign said:
The trouble is that even our best experts have not been able to find with any certainty that the NHL adopted this agreement. This may be the card that GW is holding.
Click to expand...

Yes, that's been my feeling as well--- if such an agreement exists and was part of the Moyes three tiers of LLC's that held either the team and mgt/arena rights, etc., he certainly terminated everything around June 30, 2010. If the NHL had not exercised it's right by June 30, 2010, there would NO REASON whatsoever for the CoG to give the rights to the NHL, or anyone else. This is elevated to the nth degree if these rights have real value (or anything approaching $100m).

Furthermore, I seem to recall a clause that if the team was sold and moved, the bankrupt estate would be on the list to share in the proceeds above and beyond some level after the NHL recouped it's payment. If the NHL possesses something that is valued at $100m + the NHL team, would this not also be covered by the BK agreement against prior claims from unsecured parties? Glendale is in the interesting position of having a claim against the estate for termination of the lease, but then dishing out $100m to buy something that the estate once held. (Hope that convoluted bit made sense to someone.)
 
crazed323

crazed323

Registered User
Mar 6, 2011
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Winnipeg
RAgIn said:
Maybe. But wow, wouldn't that be something. Who's the owner? Need bonds for that too?
Click to expand...

TNSE is the owner of the Moose (I think). I have been wondering for awhile what the value of an AHL team is. If the Moose are moved are they sold? Or does the Moose become another source of income for TNSE if they are moved to another city and operated at a profit. Would seem funny for one owner of an NHL team to own the Farm team of another (conflict of interest).

It will be interesting to see just how this whole musical chairs thing shakes out.


Also, who owns Phoenix's farm club? How does all this work.
 

Antidote

Registered User
Jun 8, 2007
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0
Victoria, BC
Pauser said:
IIRC, Victoria is more interested in a WHL team than an AHL team. The ideal spot for the Moose would be Abbotsford, but the Heat are currently affiliated with the Flames. I'm still puzzled as to why the Flames would have their farm team so close to Vancouver...their attendance figures are in the toilet, and only spike when the Moose are in town and the entire arena are cheering on the Moose.
Click to expand...

You recall correctly but an AHL possibility would stop WHL discussions in their tracks imo. Little OT here but the ripples go to lots of shores.
 
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