The Goldwater Institute is ready to give the once over to a possible sale of the Phoenix Coyotes hockey team to see if a deal is kosher with Arizona law prohibiting government gifts to private businesses.
The National Hockey League and city of Glendale are up against the wall and are trying to work out sale of the league-owned team to a new owner who will keep the team in Arizona. The NHL and city are trying to forge a deal with an investment and ownership group led by former San Jose Sharks CEO Greg Jamison. Two other groups are also interested in the Coyotes but Jamison is the lead pick by the city and league.
Goldwater attorney Carrie Ann Sitren said the conservative watchdog group hasn’t received much information lately from Glendale about the Coyotes deal but is ready to examine a possible deal with Jamison or another prospective owner.
“We’re going to scrutinize it,” Sitren said.
The Phoenix group opposed a previous Glendale deal that involved city bonds to facilitate a Coyotes sale to Chicago investment executive Matthew Hulsizer. Goldwater threatened to sue the city over the bonds in a move that helped scuttle a Coyotes sale to Hulsizer.
The Arizona Constitution prohibits government financial gifts to businesses. Goldwater took plenty of heat from Glendale and Coyotes fans for opposing the Hulsizer bonds.
Glendale and the NHL are working to make the next incarnation of a Coyotes sale immune from a Goldwater lawsuit over the state constitution’s gift clause.
Golwater’s scrutiny of a new Coyotes sale will likely center around what kind of arena management fee the city might pay a Jamison group or another owner and whether some portion of a sale is aimed at helping a new owner absorb some of the hockey teams’s $20 million in annual losses.
“A subsidy is a subsidy,” said Sitren.
The watchdog group previously sued the city of Phoenix over a $97 million tax break given to the original developer of the CityNorth commercial complex next to Desert Ridge Marketplace. The Arizona Supreme Court ruled the future government subsidies to businesses need to have some public purpose and make sense to financially to economic benefits.
The Goldwater group has not challenged two $25 million payments approved by the city of Glendale for the NHL to run city-owned Jobing.com Arena. The NHL has owned the Coyotes since 2009 and the franchise loses $20 million to $25 million. Skeptics say Glendale payments are to help the NHL deal with the Coyotes financial losses as well as to run the arena.
The city and league need to get a deal done soon or the franchise could be sold and moved to another market.