On Friday, a state Appeals Court ruled that an initiative that sought to reverse a City of Glendale sales tax increase of .07 percent should appear on the ballot.
The sales tax increase would help the city avoid budget cuts and would help ease the cost of the Jobing.com Arena management fee. Glendale may consider appealing to the Arizona Supreme Court. The Arizona Supreme Court rejected hearing the case a few weeks ago when the group seeking the initiative asked them to rule against a lower court who ruled in favor of the city.
What does this mean for the Phoenix Coyotes? It is a minor complication for the deal. Glendale has paid the NHL $25 million per year over the last two years to manage the arena. That payment is higher than any year under the agreement with prospective Coyotes buyer Greg Jamison. Just like a person who can pay their bills would welcome a raise, not getting one would not prevent them from fulfilling their prior obligations.
As discussed in the council meeting when the Jamison/Glendale lease agreement was approved, there is significant benefit in keeping the Coyotes in the arena under the lease with Jamison rather than allowing the team to leave. The city still has bond payments to make on the arena regardless of how many events take place at it. The Coyotes provide a minimum of 43 games per season and could provide as many as 59 games. The Coyotes had 52 home games last season. The lease with Jamison also entitles Glendale to ticket surcharges and a portion of the arena naming rights.
Jamison has until the first week of January to sign the lease before a new council may complicate matters. The new mayor is expected to be against the already approved lease and the council may be at risk for a majority agreement with the new mayor.
This ruling is just a very minor bump in the process. There are assurances built into the lease agreement that Jamison will receive the agreed to fee. There is no risk for the Jamison group to sign this deal in regards to payment from the city.
NOTE: The one possible casualty of waiting for this deal to be done is Shane Doan. His deadline will be sooner than Jamison’s.
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Well, it may seem like a minor complication, but I think it’s more serious than that, especially if the tax is voted done on the ballot. This will show lack of public support for the Council and the franchise. As well, a repeal of the tax may mean certain investors will say bye bye to Jamieson. And, if there’s a further delay in the sale of the tean, the Coyotes can kiss Shane Doan goodbye! This will spook investors even more – this could have a chain reaction, indeed.
Like I said in the article, Shane Doan may have to move on before the ownership is completed. I agree that this is not helping the sale get completed but, the lease makes it very clear that Glendale must pay Jamison or risk a 8 or 9 figure lawsuit.
Before the 8 to 9 figure lawsuit, the lease needs to be signed by GJ and to be signed, GJ needs to buy the team. This is what is complicated, especially for the investors. Sales tax that helps paying GJ on the ballot, lockout, Shane Doan possibly gone. Be honest, remove your Coyotes hat and think logically. Would you invest with all these issues?
Would you invest knowing that you would either be paid or have an already agreed upon figure you would get if they can not make payments? You could also buy the arena in a few years and do whatever you seek and avoid paying Glendale ticket surcharges. From what I understand, Jamison would still get the Arena Management Fee if there is a partial season or full lockout. JEG will bring more in than just the Coyotes home games. It is also a team that before ownership issues began, brought in around 15K+ average per game in Glendale. Doan might leave but you are not buying a team because of one 36 year old player, even one of Doan’s stature. Plus, Glendale has been making higher management fee payments the previous 2 years without this sales tax increase.
Considering that it didn’t take very long to find investors to commit a ton of money to the Cleveland Browns and San Diego Padres (with the ownership change sign, sealed and delivered or on their way soon) while it has been over TWO YEARS since the Coyotes have been for up for grabs, and yet potential Coyote owners can’t seem to convince investors to commit a mere 170 million to a hockey team who plays out in the middle of nowhere, tells me that Jamison’s chances of finding 170 million before January is about as likely as an all Texas World Series between the Houston Astros and Texas Rangers, tax increase or not! Case Closed.
You realize both the MLB and NFL are SIGNIFICANTLY more popular than the NHL in every city in the US with a NHL team.
But of course JD. Which is why I’m not holding my breath on Jamison finding 170 million by January. Good work JD. Keep it up. And drop by the HFBoards sometime.