It is time to review some previous ownership deal making history. Jerry Moyes threw the Coyotes into bankruptcy in late 2009. In 2010 Glendale and the NHL began to entertain offers for a buyer of the team. Everyone assumed that it would be a fairly quick process but that was not to be. One deal after another was rejected throughout 2010 and 2011. In order to continue the process the NHL held up the city to the tune of $25M a year. In 2012 Greg Jamison entered the picture and a majority of council (I being one of that majority) believed we had a solid deal that was in the best interest of the city.
In June 2012 a majority of council made two significant votes. One was to accept the Jamison deal after the management fee had been reduced and penalty/incentive clauses were added. During contentious council discussions Interim City Manager Skeete presented the council information about the financial impacts of keeping the Coyotes or losing them. One of the bullet points that I remember to this day stated that over the 20 year life of the deal Glendale was better off by some $20M by keeping the team. Skeete, at that time, had worked out a financial plan that called for budget cuts over 5 years. Many became confused and blamed those projected budget cuts on keeping the Coyotes. Not so. Those budget cuts were in anticipation of losing the sales tax increase in 5 years. His plan was solid, accommodated keeping the team and was in the best interest of the city.
That same month a majority of council voted to raise Glendale’s sales tax for a period of 5 years. A fire storm lasting 6 months erupted. Ken Jones, virtually single-handedly, although the Goldwater Institute was lurking about and seen helping Mr. Jones on occasion (later they would part ways), mounted a Referendum petition drive to reject council’s vote on the Coyote deal. He failed but it created unanticipated delay. Shortly on the heels of that effort another group began an Initiative petition drive to get rejection of the sales tax increase on the November, 2012 ballot. They were successful and the voters rejected their initiative in the November election. But it created further unanticipated delay. These folks were not working to further the best interest of the city.
The city imposed a deadline of January 31, 2013 for Jamison. He failed to meet that deadline and that is a story for another time. In May of this year the NHL identified Renaissance Sports and Entertainment (RSE) as a buyer of the team and rejected the Pastor bid outright. Has it occurred to anyone that RSE is, in fact, the ONLY bidder the NHL has? To this day they have never made a formal announcement of RSE as the buyer. Is this deal in the best interest of the city?
There are some councilmembers who understand that keeping the team is vital to the city but they are having problems guaranteeing that $15M a year that RSE has said it must have. They are between “a rock and a hard place.” It reminds me of the original Ellman deal. At one point council was presented a “bucket list” graphically. One of the diagrams showed an enormous amount of revenue being literally poured into city buckets. Unfortunately those buckets filled with oodles of revenue to the city never materialized. “Fool me once, shame on you. Fool me twice, shame on me.” Now the current council is being presented with another version of a “bucket list.” This time RSE had identified additional revenue streams that will reimburse the city for its guaranteed pledge of $15M a year for a lease management fee. Some have asked why doesn’t the city just pay the $6M a year and RSE keeps ALL of the additional revenue streams itself. It accomplishes the same thing. The assumption is that to satisfy its lenders RSE must show that it has an annual guaranteed source of $15M. Who better to guarantee that amount than a city? The problem is, will those additional revenue stream buckets fill up as assumed? No one knows. Those additional revenue streams could bring $4M or $5M a year to the city or (hallelujah chorus) they could earn $11M a year. Yet the city will guarantee $15M a year. Why is it the city’s responsibility to assume this financial risk on behalf of RSE? Is it in the best interest of the city?
Let me be very, very clear. I want the team to remain in Glendale but not if it does further financial harm to a great city that I love. My frame of reference for any deal has been in terms of whether it meets the best interest of Glendale. I have demonstrated my commitment by voting in the affirmative for the Jamison deal and subsequently losing my council seat. If not for my vote and that of 3 others, there would be no RSE deal to consider today. I want a clean deal that the city can afford to pay and I suspect some councilmembers want that as well. Can they make that happen? We won’t know until the deal is made public. I, for one, will be reading every comma, period and paragraph. Only then will we truly know if this deal is in the best interest of Glendale.