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Glendale may use City Hall as collateral to help pay the NHL

Jun 25, 2013, 6:08 PM EDT

Keith Yandle #3 of the Phoenix Coyotes during the NHL game against the Chicago Blackhawks at Jobing.com Arena on February 7, 2013 in Glendale, Arizona. The Blackhawks defeated the Coyotes 6-2.
(February 6, 2013 - Source: Christian Petersen/Getty Images North America) Getty Images

Tonight in Glendale, city councilors will present to the public and vote on a plan to use City Hall as collateral to help pay down the various “interfund” loans the city took out to pay the NHL to manage Jobing.com Arena, the home of the Coyotes.

Got all that?

From the Arizona Republic:

The debt the city seeks to repay goes back to two $25 million commitments the city made to the National Hockey League to operate the arena in fiscal 2011 and 2012, said Diane Goke, the city’s chief financial officer.

Glendale borrowed $45 million largely from its own enterprise funds, which are self-sustaining funds for such services as water and sewer and are separate from the city’s general fund.

If the council approves the plan, city officials will seek outside investors to lease back the City Hall complex for 20 years by making a one-time, up-front payment of $30 million.

We won’t get into all the details here, because, you know, pretty boring. If you’re desperate for more information, here’s a PDF.

Bottom line: Glendale is in quite the financial predicament, and the cash-strapped city still has a huge decision to make on whether to enter into a long-term arena-management deal with prospective Coyotes owners Renaissance Sports and Entertainment.

Of note, the NHL may reportedly make it easier on the city if the sale does go through.

  1. illadelphiasphinest - Jun 25, 2013 at 6:16 PM

    Just move this team already!!!!!

    • r4n6er - Jun 25, 2013 at 6:17 PM

      To Seattle please!

  2. tru2joelu4eva - Jun 25, 2013 at 6:26 PM

    i’ll be honest and say that i don’t follow this story very closely, but you have to think that if the coyotes were going to stay in phoenix they would’ve figured out how at this point. maybe that’s why down wants to stay, he could become the star face of a brand new team in a market that will likely be a bit larger than phoenix’s.

  3. adambballn - Jun 25, 2013 at 6:30 PM

    I’ve never been to Seattle and have been looking for a reason to go… please move this team so I can go up there and catch a Hawks game next season!

  4. btlpper68 - Jun 25, 2013 at 6:56 PM

    For the love of god move the team , I’m so sick if going on pro hockey talk and reading more drama abt this phoniex Glendale saga

    • badintent - Jun 26, 2013 at 3:48 AM

      think PHt is bad ?? Go to PBT and read the drama on the Sonics and Kings,it ‘s twice as bad.

  5. ray2013 - Jun 25, 2013 at 8:18 PM

    They’re prepared to lease out City Hall, pay lease payments on their own building, with a guaranteed return of 5% – 7% (when the average bond pays 1.2%) and they’re prepared to give their lessor the right to lock them out of City Hall if they are late on any payments. Add to that they are mortgaging all of their various infrastructure funds to keep them there. That’s pretty extreme, and shows the extent that Glendale is fighting to keep the Coyotes there.

    They’ve basically pushed all their chips in, ran home, took everything they had of value, and pushed those in as well with no guarantee that the Coyotes will be successful there long-term (absent any relocation drama). Where is their independent legal counsel in all this mess? Seems reckless in the extreme.

    • greatminnesotasportsmind - Jun 25, 2013 at 9:05 PM

      Hello, meet Goldwater Institute

  6. hazlydose - Jun 25, 2013 at 8:46 PM

    If the people of Glendale liked to watch the Coyotes so much that they are willing to mortgage the future of their city and its infrastructure, you would think they would show it by filling the arena more than 81.3% full.

    • greatminnesotasportsmind - Jun 25, 2013 at 9:07 PM

      Well if you ask the Florida Panther haters, their 99.7% isn’t that. So Phoenix must be closer to 51% in their eyes

    • desertfan - Jun 25, 2013 at 10:08 PM

      And at $10 per ticket vs $100 in good markets????

      • greatminnesotasportsmind - Jun 25, 2013 at 10:30 PM

        Yeah except that Florida’s average season ticket price was 55.75 which puts them ahead of:

        Detroit 53.28
        San Jose 51.47
        New Jersey 48.06
        Columbus 47.95
        Carolina 47.89
        St. Louis 46.20
        Buffalo 46.15
        Ottawa 42.09
        Colorado 40.62
        Anaheim 40.49
        Phoenix 40.32
        Tampa Bay 38.12
        Dallas 36.09

        Your confusing your $10 seats to be center ice lower level, when in actuality they are upper end nose bleeds in the 6th largest arena in the NHL.

      • greatminnesotasportsmind - Jun 25, 2013 at 10:34 PM

        Oh the numbers don’t lie

        http://www.fancostexperience.com/pages/fcx/blog_pdfs/entry0000020_pdf001.pdf

  7. 1901wmadison - Jun 25, 2013 at 8:51 PM

    Admittedly I don’t follow this story either – but I agree with Ray.

    Who on earth is advising the city in all of this?

    Seems like a ridiculous gamble to keep a hockey team that has never really brought fans, $, etc.

  8. bigtull - Jun 25, 2013 at 9:17 PM

    Team shouldn’t have been moved from Winnipeg in the first place!!! Seattle or Portland OR would be logical cities. Maybe send it to Quebec City and give the Habs another rival!!!

    • desertfan - Jun 25, 2013 at 10:10 PM

      QC is a hostile environment and does not deserve a team.

  9. jimw81 - Jun 25, 2013 at 9:59 PM

    im sorry but cities shouldn’t be using government/public buildings as collateral to keep a hockey team that is in deep trouble in their city.

  10. sunk500 - Jun 26, 2013 at 9:03 AM

    Sometimes you just have to admit defeat and cut your losses. Yes the building may be a white elephant but at least it wont be a white elephant that costs $15 million a year to manage for a team that is so far out of the city no one can get to.

    Glendale cant even pay their current debts. They’ve hiked up their sales tax to something over 10% and are closing schools and police stations.

    Glendale have budged to supply $6 mil/year to RSE to manage the arena but RSE wants $15 mil/year and apparently the difference of $9 mil/ year is is supposed to come from parking and other sources of revenue. I MEAN COME ON!!! This is not realistic. The team and city is already bleeding money.

    It would be one thing if RSE had the funds in cash but even they are heavy on loans as well and would barely be able to cover a down payment if necessary.

    I know NHL wants to stay there, but I didn’t know how bad things were over there. You would think when they’re selling their own city hall they would take a step back and realize what they are doing.

    Move the Team to Seattle and expand the league in the future to Quebec City and Milwaukee/KC.

  11. hockeydon10 - Jun 26, 2013 at 11:42 AM

    What’s next, they going to start selling children and kidneys?

  12. brotherlove2012 - Jun 26, 2013 at 11:46 AM

    And you @Desertfan is a total idiot and a moron.

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