Lawsuit to Stop Glendale/Phoenix Coyotes Deal

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The Goldwater Institute is seeking to invalidate the City of Glendale’s arena lease deal with a prospective buyer of the Phoenix Coyotes. Goldwater attorney Carrie Ann Sitren talks about the outcome of today’s hearing.

Ted Simons: Good evening. Welcome to "Arizona Horizon." I'm Ted Simons. A measure to continue Arizona's one cent sales tax increase could be in trouble. The Arizona Tax Research Association which opposes the measure found a mistake on petition sheets used to gather signatures for the Quality Education and Jobs Initiative. The mistake involves language describing the measure on the petition sheet not matching language filed with the Secretary of State's office. Secretary of State Ken Bennett says by law he can't accept any signature sheets with language that differs from those filed with his office. The Goldwater Institute scores a partial win in its effort to stop a deal to keep the Coyotes in Glendale. A Maricopa County Superior Court judge invalidated the ruling allowing it to go into effect immediately. The ruling now gives a chance for a deal to be challenged by a citizen's referendum and a Glendale resident says he will do just that and is going to start collecting signatures tomorrow. The judge has yet to decide on the Goldwater Institute's request that the lease agreements be invalidated. With me now is Carrie Ann Sitren, she's the Goldwater Institute's lead attorney in the case. Good to have you here. Thanks for joining us. Is that what the judge ruled, no emergency clause? What does that mean for us?

Carrie Ann Sitren: The no emergency clause is very, very important for taxpayers. What that means is they now have an opportunity to refer this measure to the ballot. They have a chance to voice their opinion basically it reverses what the council has done.

Ted Simons: They said no emergency clause and you said no emergency clause because?

Carrie Ann Sitren: The council simply didn't have enough votes to pass. Under the city's own charter the city has to have at least five votes for something to pass with an emergency clause. The city only had four votes. But when the final ordinance was signed and sealed and stamped by the clerk, the emergency clause was still on the ordinance. We filed a lawsuit challenging that and a judge agreed with us today that that emergency clause should be taken out.

Ted Simons: Let's get a big picture thing here. Why are you guys suing Glendale?

Carrie Ann Sitren: Well, we of course are always interested in the taxpayer. We started our inquiry here a couple of years ago into the Phoenix Coyotes because we heard about possible transfer of public funds to the team. Of course we always look at those deals with an eye towards the gift clause. Now in this case we had a huge problem trying to get the public records from Glendale. That simply snowballed and snowballed over several years until where we are where we are today, which is basically the city taking every opportunity it can to shut doors on taxpayers. They tried to do that here again by trying to get the voters out of the process. We have assured that the voters will have a right.

Ted Simons: Some say the voters are involved in the process because this was their elected representatives giving the okay to this deal. How do you respond?

Carrie Ann Sitren: The voters still have rights. They have the right to speak with their council members. They have a right to see copies of whatever deal the council members are approving. Thanks to the judge's ruling today, they now have a right to refer what the council has decided to the ballot.

Ted Simons: You also had a problem with the idea of not having other arena operators bid for the job.

Carrie Ann Sitren: The city's own code requires that the city has to put out bids any time it's going to look at a major contract like this. The city simply did not do that in this case, and we don't know why. The city appeared to say, "Hey, this deal is just for Mr. Jamieson and no one else and that's the way he wants it and we're going to give it to him that way" while the competitive bidding law in Glendale expressly says, "No, you have to solicit bids. This is for the protection of the taxpayers."

Ted Simons: Does the city manager, though, have discretion on something like this if it involves bypassing unnecessary costs, if it avoids delay, these sorts of things?

Carrie Ann Sitren: Absolutely the city manager has discretion. The city manager has to issue a written finding of his decision. Then that will allow voters to go to their council members before any decision is made and have some input on that decision. Here the the city manager did not make that written determination. So as far as we know there's been no determination. Taxpayers were not allowed to comment on it. We're looking at a deal without competitive bidding.

Ted Simons: I think some critics of the Goldwater's actions wonder how often you guys intervene in municipal bidding processes. Is this somewhat unusual? How often does this happen?

Carrie Ann Sitren: Well, we certainly have been very active with the city of Glendale more so than we had hoped, but only because the city has brought it on themselves. We really hope the city will be much more transparent in its dealings, especially when it comes to multimillion-dollar contracts and professional sports teams.

Ted Simons: You have a separate filing regarding Glendale in contempt of court I believe. Talk about that.

Carrie Ann Sitren: We have this ongoing public records lawsuit because we simply can't get the records from the city of Glendale. The judge made very specific orders that required the city to give us the records on certain schedules so that the public would have an opportunity to look at what the council is doing beforehand. They come in, prepare comments and they get to talk to their council members before a vote. The city simply did not follow that schedule.

Ted Simons: It sounds, though, like some folks at the city are saying those documents weren't even created when you guys were asking for them. Valid?

Carrie Ann Sitren: Well, as of today, from all we know there's one document that still has not been created, and that's part of the contract that the city council approved. Now, how the city council can approve a contract that doesn't even fully exist yet is certainly a question that we would like to hear answered.

Ted Simons: If the judge says and this is obviously hypothetical, the judge says, "I'm going to let this go through," does Goldwater go ahead and look at the gift clause and file yet another suit trying to slow this process down?

Carrie Ann Sitren: Well, at this point our interest is not in slowing the process down. If there is a gift clause problem, we're going to look at it, and we would be prepared to make a challenge if the challenge is appropriate. As of now, we can't even make that determination because again, the city hasn't turned over the records yet.

Ted Simons: I think again, critics of the Goldwater Institute, they look at so much attention paid to this particular sports enterprise and this particular municipality, and they wonder where you guys are with other deals with other major sports operations and other major operations in town. They are curious as to why this has your attention over and over again. How do you respond?

Carrie Ann Sitren: We certainly distribute attention as far and wide as we can. We know in this case we have a lot of people out there in Glendale. This is a huge issue. This is a multimillion-dollar contract. And more importantly, the city has made it incredibly difficult to get information. We have not encountered that problem with other cities. Normally it's a pretty standard process to get the documents and analyze them. Here the city has made that extremely difficult. That is part of the problem here.

Ted Simons: And you mentioned you represent taxpayers in Glendale. Is it in the taxpayer's best interests for that arena to wind up being empty?

Carrie Ann Sitren: You know what? That's a question that I can't answer. I would assume it's not in the taxpayers' best interests for an arena to be empty, but I don't know what the options are. In fact, no one really knows what the options are because the city hasn't put it out to bid. We know, for example in Oakland three management companies are competing for the right to operate a county owned arena.

Ted Simons: Are they management companies that also are involved with professional sports teams?

Carrie Ann Sitren: You know, one of the companies is called SMG, and they manage a number of arenas. Some of them have professional sports teams, some of them don't. We know that's out there. We also have seen in other places that cities can actually make money off of these kinds of arrangements. In Glendale, we know we have only seen money going out of the city bank.

Ted Simons: Last question here, this is something that comes up a lot among your critics, the fact that there's so much attention on this team and this arena, the city, and they look at your board of directors and see the wife of the owner of the Arizona Diamondbacks on that board and they are wondering, is there some funny business going on here and why is she on the board of a group that is just so headstrong against another sports enterprise? Is that a legitimate question, A, and B, what kind of influence are we looking at here?

Carrie Ann Sitren: That's a legitimate question and that just goes to prove that we are big sports fans at the Goldwater Institute from our board members all the way down and through and through. Our members are very supportive of sports. I personally want to see the Coyotes stay here. I have said it before and will continue to say it, but simply not on the taxpayer's dime. Our first principles are to protect the taxpayers and the constitution.

Ted Simons: You're saying if that arena stands empty those taxpayers will be protected better than if the deal goes through?

Carrie Ann Sitren: Well, I don't know. I can't say that, but certainly we know that that is not the only option. If this team leaves the city certainly will have other options other than an empty arena. We would like to see the city look into that.

Ted Simons: Alright, it's good to have you here. Thanks for joining us.

Carrie Ann Sitren: Thank you.

Carrie Ann Sitren:Attorney, Goldwater Institute;

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