After months of secret negotiations, the city finally released a $197 million proposal in December 2010 to pay the Phoenix Coyotes to keep playing at the city-owned hockey arena. A few days later, the Glendale City Council voted 5-2 to approve the deal. Or did it?
First off, if the deal sounds backwards, that’s because it is: Under the approved agreement, the city agreed to pay a Chicago businessman $197 million to lease the city’s own arena. Apparently, that’s what it takes to keep the team playing in the desert after it filed for bankruptcy in 2009. That’s also why the Goldwater Institute has been monitoring the deal. The Gift Clause of the Arizona Constitution prohibits cities from subsidizing businesses, and we will soon release a formal evaluation of Glendale’s proposed payments.
Since December, the city appears to have been taking steps to move forward, including plans to issue $116 million in bonds to pay the Coyotes. Moody’s Investor Services reported the Coyotes bonds would go on sale this week, and downgraded the city’s bond rating in response. City taxpayers will be on the hook if the team fails again or if revenues fall short of projections.
On Friday afternoon, the city came out with a new proposed hockey agreement, which it calls “the latest version,” to be voted on by the Council this afternoon. Will this be the final version? Will the Council approve it before the bonds are issued? Will Council members be given the time and information necessary to make an informed decision? The Goldwater Institute will continue to monitor the saga closely to make sure the Coyotes do not skate away with taxpayer money.
Carrie Ann Sitren is an attorney for the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation.
Goldwater Institute: Goldwater Institute v. City of Glendale
Arizona Republic: Glendale to vote Tuesday on Changes in Coyotes sale