Wednesday, June 10, 2015
Glendale City Council to consider ending arena agreement with Coyotes
PHOENIX – The Arizona Coyotes finished their worst season since moving to the desert with a loss to the Anaheim Ducks at Gila River Arena in April.
It is now unclear if the Coyotes will ever play another home game at the arena.
Glendale City Council will hold a special meeting tonight at 6 p.m. to consider a cancellation of the lease and arena management agreement between the city of Glendale and IceArizona, the team’s co-owner along with majority owner Anthony Barroway. The meeting was announced late Tuesday night.
In its agenda for tonight’s meeting, the City Council cites a potential breach in relation to Arizona Revised Statute 38.511 . The statute allows a government entity to terminate certain contracts within three years of the execution of the contract if a person who was “significantly involved in initiating, negotiating, securing, drafting or creating the contract” begins working for the other party.
This could be a reference to former Glendale City Attorney Craig Tindall, who is now general counsel for the Coyotes. Tindall’s resignation from the city of Glendale went into effect on April 1, 2013, at which point, according to his severance agreement , he continued to “remain in the employment of the city” and “provide limited consulting services” for six months. He began working for the Coyotes in August of that same year. The City Council voted to approve the deal with IceArizona on July 2, 2013.
According to The Arizona Republic , former Glendale City Councilman Phil Lieberman had filed an ethics complaint in November, 2013, that alleged a conflict of interest for Tindall. The Republic reported that the complaint was dismissed by the State Bar of Arizona in July, 2014.
In an interview with The Republic posted online Tuesday night, Coyotes majority owner Andrew Barroway denied that the team had done anything that could lead to a cancellation of their deal with the city.
“We certainly do not believe that there’s been any breach of the agreement,” Barroway told The Republic. “We feel very strong in our legal position here. More important than that, we want a positive working relationship with the city.”
In a meeting Monday that included Barroway, Coyotes President, CEO and co-owner Anthony LeBlanc, Glendale Mayor Jerry Weiers Vice Mayor Ian Hugh, city attorney Michael Bailey and acting city manager Dick Bowers, according to LeBlanc, the group reportedly talked about ways to strengthen the relationship between the Coyotes and Glendale.
“What we discussed (Monday) was how can we work closer together to make things work and grow things,” LeBlanc said on Tuesday afternoon at a press conference held before the announcement of tonight’s meeting. “At the end of the day, this year is a great example of what happens beneficial for the city if we work together.”
As part of the 15-year agreement , Glendale pays $15 million annually to IceArizona to manage Gila River Arena. The proposed cancellation follows a TSN report that said city officials claimed that money was instead being given directly to Fortress Investment Group, a New York-based asset managing company that helped finance the purchase of the Coyotes by IceArizona.
The TSN report went on to cite Glendale Vice Mayor Ian Hugh saying that arrangement, with the money being used to service Ice Arizona’s debt instead of to cover arena management expenses, is a violation of the terms of the contract between the two parties.
At Tuesday’s press conference LeBlanc dismissed the claims in the report.
“There was speculation regarding our relationship that we used to have with Fortress Investment Group,” LeBlanc said. “I mean, the reality is it’s a moot point. We don’t have them as a lender any longer.”
LeBlanc said they have not violated the agreement in any way.
“No, we have never breached, we are in full compliance,” LeBlanc said. “The agreement is in full force and effect.”
In a statement released Tuesday night in response to the announcement of today’s special meeting, the Coyotes said they would travel down any legal lanes necessary to keep the council from ending the deal.
“In the event the City Council initiates an action to revoke, repeal, or otherwise rescind the agreement, the Coyotes will immediately take all actions available to them under the law against the city of Glendale,” Nick Wood, a lawyer representing the Coyotes, said in the statement.
“This action by the city of Glendale is completely ludicrous,” LeBlanc said in the statement. “The city of Glendale is displaying a complete lack of good faith, business acumen or an understanding of a business partnership.”
In a statement released this morning, Glendale City Council defended their move, saying they were open to solutions if they served Glendale citizens.
“The city is open to a resolution but it must be one that provides certainty and fairness to both parties, especially the taxpayers.”
DocumentCloud: Public documents of Craig Tindall’s severance package as the city of Glendale’s city attorney. Document is not optimized for mobile phones.