Coyotes Vote

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The Glendale City Council is expected to take a crucial vote concerning the future of the Phoenix Coyotes in the city Tuesday, July 2. Arizona Republic reporter Paul Giblin will talk about the vote.

Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. The Glendale city council last night approved a new $15 million deal to keep the Phoenix Coyotes in town. Glendale city councilman Gary Sherwood talks about what he describes as a good deal for the city.

Gary Sherwood: It is a good deal. We looked at the numbers without the hockey team there, and it was more expensive. We still had the debt payment on the arena, that ranges anywhere from $10-12 million a year, we were breaking even on it up until we got that first $25 million bill from the NHL during the first year of the non-ownership. That's all we intended to do. It was supposed to be a catalyst for economic development. As long as we were breaking even from the sources of the development for tax revenue, we were good. It gives stability to the team, it gives stability to the sports entertainment district, which is what the city vote order back in to lessen the tax burden on the citizens of Glendale. And without that tenant in the arena -- The agreement has to be signed by next Monday and consummated four weeks after that with NHL. Right now the NHL has to go through the purchase -- The -- The purchase of the team, and then -- So it's really just buttoning up the contract.

Ted Simons: Here now with more on last night's eventful Glendale city council meeting is "Arizona Republic" reporter Paul Giblin, who has been covering this story. I hope you got some sleep. Four hours last night?

Paul Giblin: About four hours. It started at 7:00 and went until 11:30.

Ted Simons: What happened? What did the council consider, what did they finally do?

Paul Giblin: They had the measure in front of them as councilman Sherwood explained, he -- The deal is the city will give the Coyotes $15 million a year for 15 years and the coyotes will reimburse a bunch of money back to the city that. Was the question, how much money? They say it's going to be 8 million, perhaps 11 million, other estimates is more like 6.72 million. There's a big exchange of money. That was the crux of the deal. The lease for the arena at arena.

Ted Simons: Now, is that money -- We're talking firm dollars here, or just depends dollars?

Paul Giblin: One of each. The city's money, firm dollars, that was key to the deal. The team's lenders want firm money. That's why they wanted that firm money from the city. The depends dollars, that depends on attendance, because there's ticket surcharges, it depends on parking, how much money they'll get for the naming rights. The depends money goes back to the city. That's the squishy money the lenders want to depend on to give the massive loan to the owners of the team.

Ted Simons: OK. What was the final vote?

Paul Giblin: The final vote was 4-3.

Ted Simons: Was that expected?

Paul Giblin: It was expected. That became a particularly apparent last Friday during the first public hearing, and listening to what the councilmen were saying. I was looking at a 4-3 vote.

Ted Simons: It sounds like a key in all of this, at least something that emphasized and pushed things forward, was the new owners brought in a management company that has a wealth of experience managing these kinds of facilities.

Paul Giblin: That's true. They did, but that wasn't a key issue. Because the assumption was, and the promises were that they were going to bring in a lot of events. The 41 Coyotes games, including preseason, presumably some post-season, but they also said they'd bring in other events. That arena has done well, it's had Bon Jovi, the Rolling Stones, Paul McCartney, Madonna, and every big act you can think of. But they wanted to bring more. As a backdrop to all this, as an initiative by Gary Sherwood, he suggested that the city put out a bid to get a manager in case the coyotes left. So they did that, so they had two other qualified management companies put in bids, and then Renaissance, which is the investors group for the hockey team, brought in their own promoter.

Ted Simons: OK. I thought it did seem like heads turned, eyebrows raised and some folks seemed more comfortable once that they got that management group in there.

Paul Giblin: I didn't see that.

Ted Simons: Alright. Another key factor was the out-clause, five-year out-clauses on both sides. How did that work?

Paul Giblin: The team wanted a five-year out-clause. They're borrowing the full amount to buy the team, which is $170 million. In addition they had 50 million worth of cash, they said they're willing to burn through to vent market. And they're giving themselves five years or $50 million. When they hit one of those and they don't like it they can pull the plug. The city said we'd like to dot same thing if after five years we don't like you, and we've burned through $50 million, we're going to pull the plug too. No, no, the owners said that doesn't work. Our lenders who want the hard money, they don't like the idea the city can pull the plug after five years. So the potential owners said that won't work. And the city said we're sorry for insisting on such a thing, we'll forget that ever happened and here's your money.

Ted Simons: Alright. So we had arguments for signing the agreement, arguments for not signing the agreement. Public comment? What did we hear from the public?

Paul Giblin: By the time the public got up to speak the vote was already in the can. They just hadn't asked everyone. But the vote was in the can. We had two sides. A lot of people were in their Coyotes jersey and talking about how great hockey is, and consumer advocates are concerned about the restaurants and bars. So they were talking about how the Coyotes were key to that. Which is probably true. But all of Westgate is about 2.5% of the city's budget. It's not such a big deal if you look at it that way. Then the anti-tax folks, one guy had a sign out front, that said the Coyotes were some kind of blood suckers. I don't remember what the adjective was. They were out there, they were noting earlier in the year the city told the fire chief that he can't have extra money to put extra gas in the fire trucks because he's responding to extra calls. So they said how come you can't afford to put gas in fire trucks but you can afford to give these guys $15 million? Other people were talking about how they're not watering the grass at parks, and the parks are turning yellow, and you're cutting become on library hours.

Ted Simons: As far as the atmosphere, the mood there in the chamber, was it tense, was it -- After four -- It can't be tense for four hours.

Paul Giblin: An interesting thing happened. The mayor at the beginning scolded everyone, and said there will be no cheering and no booing. And I expect everyone to behave. And he would bang his gavel if something happened out of line. Instead of clapping whenever a public speaker or when the owners, potential owners said something that they liked, they all held up their thumbs like this. Which was interesting. I hadn't seen that before and I have been covering government a long time.

Ted Simons: How about -- You mentioned one protest sign outside the arena. We're talking hockey. No one through down their gloves? Did -- I was watching on your website, the Republic's website, live coverage, the vote occurs, and I don't think half of that -- Half of the people there in the audience knew what happened.

Paul Giblin: No. I think far less than half knew what happened. Because they all sat there, they had the vote, it sounded like they were going to have a vote on the amendments first, and then they would have a second vote on the actual ordinance. But instead, the attorneys for the city rolled them into one and they had one vote and it went very quickly. By that time everybody was talked out and they moved on to other city business and everyone just sat there.

Ted Simons: They're talking about an assistant city manager and I'm thinking, there's no -- It's hockey, there should be a hoop and a holler. People are looking around like what happened?

Paul Giblin: Right. It was like Sunday church or something. We've been enough of these, people wander in and out all the time, but everyone sat in their seats. Then they were very courteous, and they just didn't know. So meanwhile, I'm tweeting, hey, this is done. People were tweeting me back, is it over?

Ted Simons: Bottom line, coyotes are here for five more years.

Paul Giblin: Five more years. The owners say they'll make it a good go of it and they'll be here forever.

Ted Simons: Five more years. Paul, great work. Good to have you here.

Paul Giblin: It's always a pleasure. Thank you.

Paul Giblin:Reporter, Arizona Republic;

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