Saving the foundering Phoenix Coyotes from extinction shouldn’t be a taxpayer-funded effort, according to the Goldwater Institute.
The Phoenix taxpayer watchdog group, whose namesake is 1964 Republican presidential candidate Barry Goldwater, is asking the judge in the Coyotes’ bankruptcy case to block any sale of the National Hockey League franchise that includes tax incentives aimed at keeping the team in Arizona.
The Goldwater Institute said the Arizona Constitution “categorically prohibits” using taxpayer dollars to benefit private businesses. The group threatened to file a lawsuit if Judge Redford T. Baum approves a sale of the team to a buyer that would take advantage of tax breaks.
The City of Glendale, the owner of the Coyotes’ home rink, has fought BlackBerry mogul Jim Balsillie’s bid to buy the team out of bankruptcy and relocate it to Hamilton, Ont.
As part of the city’s efforts, it engaged in discussions with several potential suitors, including the NHL, who would keep the team playing in the Phoenix suburb.
The league and other prospective buyers have said the team would need a revised lease with the city in order for any owner to make a long-term commitment to playing at Jobing.com Arena.
Glendale has been mum on what exactly it is offering would-be Coyotes buyers but possibilities include givebacks on rent, a special taxing district to offset costs or tax rebates.
The institute said those types of incentives are prohibited under a state law that “represents the reaction of public opinion to the orgies of extravagant dissipation of public funds” by municipalities in the aid of private businesses.
The group said the bankruptcy judge should have to clear any sale of the team that includes a tax subsidy with the Arizona Supreme Court, “or alternatively proceed with bids from potential owners who do not raise such questions.”
The Goldwater Institute said if the Coyotes were to scamper off to Canada, Glendale wouldn’t miss the team as much as it thinks.
The group said the city previously overstated revenue the Coyotes would generate for Glendale by as much as 50% and now is overlooking the possibility of rebooking Coyotes dates with new events that would replace the lost revenue at no additional cost to taxpayers.
© Wall Street Journal