Glendale trying to end lease agreement with Coyotes

[Bates]

I'm not sure I would put my money on Council on this one??

http://www.foxsports.com/arizona/story/glendale-votes-to-cancel-lease-deal-with-coyotes-061015

And to get things back on track, Glendale council voted to end the terms of the lease with the Coyotes.  The vote went 4-3 in favour of ending the lease.

The big issue that makes this likely a legal right for Glendale is that Craig Tindell had a big hand in crafting the new lease for the City in April-June of 2013.  He then was hired by the Coyotes as General Counsel in August of 2013 and ended his relationship with the city in October of 2013.  Arizona law stipulates that a contract can be voided if a key party of the negotiation takes on a role with the other negotiating interest within 3 years of the initiation of an agreement.  It comes under Statute 38-511A.

Tindell did file his resignation papers with the city in April before the negotiations took place but he was involved in the lease negotiations so I don't think the NHL has much of a leg to stand on.  I think this ultimately has to be somewhat of a final straw in terms of their being any good will between the city and the NHL at this point however.  I mean, I know Bettman has to protect arena development, but how many times can the Coyotes drag the NHL through the "nobody wants you" mud before they have to just say enough is enough?

I think there is enough dysfunction within Glendale itself to counteract a lot of the negativity around city-funded arenas.  I mean the data has been out there for years that they are a bad investment for cities but it hasn't stopped further developments from moving forward.  I don't think Glendale becomes the block that topples the Jenga tower on most arena developments.  I think the only issues are going to come up when you have a team that isn't wanted by the city at time time of negotiations.

 

[Bullfrog]

Eh, I like to mix it up when I do those.  I gain most of my knowledge of whether you have prostate problems from your history.  The exam is just a fun way to mess with you. 

(The history portion is largely true, the exam portion of a prostate assessment isn't overly high yield.  It has a 53% sensitivity [true positives that are actually determined to be a true positive by DRE] and an 85% specificity [normal exams that are truly normal])

In other words, 10% I tell you everything is fine and you might actually have cancer, and 20% of the time when I tell you your prostate is abnormal it is actually likely to be cancer and not just a normal variant or benign prostate enlargement.  Just to derail the thread from the thrilling real estate market.

I've never had one, but I suspect that I'll be more than 53% sensitive.

 

[Kin]

One of the things I keep hearing here is that while the issue with the fired lawyer might be what the city is using to justify their attempt to void the contract there's apparently a far more substantive issue where the money that the City of Glendale is paying the Coyotes, 15 million dollars a year, is supposed to be being spent on "arena management" which makes some degree of sense given that the arena and its supposed status as an attraction for people to come to Glendale is the "benefit" that the Coyotes actually give the city.

Apparently, though, there are allegations that the money is instead being used to pay down the debt the new owners incurred when they bought the franchise.

So it would be interesting to see, if the Coyotes do sue the City Council, if that would become an issue to be argued. Obviously the city would have little recourse if there's no mechanism in the contract to ensure the money is spent as per their understanding but if it turns out that the Coyotes owners are violating the spirit of the agreement like that it could easily turn the tide of public sentiment against them, assuming it isn't already turned.

Either way, I find the gall of the Coyotes here to be a little ridiculous. They're soaking the city for millions a year, their only real argument for economic benefit to the city is that "it would be worse if they left" and, while the current ownership isn't responsible for this, the whole ordeal has been a disaster for Glendale, one that's negatively impacted their public services like fire departments, police and schools.

On top of that, is there any doubt that if the Coyotes were essentially a free agent their value would increase? If they could open the bidding to people in Vegas, Seattle and Quebec City they'd probably score at least a hundred million over what they paid for it.

So, yeah, sue the city. Because if there's one thing the people in Glendale deserve right now it's to write the Coyotes a huge check.

 

[dappleganger]

So, the City of Glendale kicked the Coyotes out of the Arena.

Can we please move this franchise now? I heard Las Vegas is looking for a team.

Quebec and Seattle seem to be other possibilities.

 

[Bates]

If you had reached a financial agreement with someone that favors you more than them would you be willing to just ignore this agreement and let them redo the agreement just because they didn't like it?  Why should the Coyotes be expected to do it?  LeBlanc has done numerous interviews on this subject since yesterday and has disputed the payment info saying that he has proven to the City that it is false.

One of the things I keep hearing here is that while the issue with the fired lawyer might be what the city is using to justify their attempt to void the contract there's apparently a far more substantive issue where the money that the City of Glendale is paying the Coyotes, 15 million dollars a year, is supposed to be being spent on "arena management" which makes some degree of sense given that the arena and its supposed status as an attraction for people to come to Glendale is the "benefit" that the Coyotes actually give the city.

Apparently, though, there are allegations that the money is instead being used to pay down the debt the new owners incurred when they bought the franchise.

So it would be interesting to see, if the Coyotes do sue the City Council, if that would become an issue to be argued. Obviously the city would have little recourse if there's no mechanism in the contract to ensure the money is spent as per their understanding but if it turns out that the Coyotes owners are violating the spirit of the agreement like that it could easily turn the tide of public sentiment against them, assuming it isn't already turned.

Either way, I find the gall of the Coyotes here to be a little ridiculous. They're soaking the city for millions a year, their only real argument for economic benefit to the city is that "it would be worse if they left" and, while the current ownership isn't responsible for this, the whole ordeal has been a disaster for Glendale, one that's negatively impacted their public services like fire departments, police and schools.

On top of that, is there any doubt that if the Coyotes were essentially a free agent their value would increase? If they could open the bidding to people in Vegas, Seattle and Quebec City they'd probably score at least a hundred million over what they paid for it.

So, yeah, sue the city. Because if there's one thing the people in Glendale deserve right now it's to write the Coyotes a huge check.

 

[Britishbulldog]

One of the things I keep hearing here is that while the issue with the fired lawyer might be what the city is using to justify their attempt to void the contract there's apparently a far more substantive issue where the money that the City of Glendale is paying the Coyotes, 15 million dollars a year, is supposed to be being spent on "arena management" which makes some degree of sense given that the arena and its supposed status as an attraction for people to come to Glendale is the "benefit" that the Coyotes actually give the city.

Apparently, though, there are allegations that the money is instead being used to pay down the debt the new owners incurred when they bought the franchise.

That's exactly that I had read as well regarding the issue.  It looks like Phoenix Coyotes ownership is misusing the $15 MIL.  This whole lawyer/conflict of interest is only a recent allegation as far as I have read.

 

[Rebel_1812]

They get a good crowd, there are quite a few loyal Yotes fan,

Not really.  If that was the case it would be a profitable business which it has never been.

 

[Kin]

If you had reached a financial agreement with someone that favors you more than them would you be willing to just ignore this agreement and let them redo the agreement just because they didn't like it?

If the "them" in your hypothetical case represented the public interest of working and middle class people who'd already lost tens if not hundreds of millions of dollars on the business in question when that money could have gone to things that would actually contribute to the public good? And when their breaking the agreement would almost certainly have the effect of ultimately making me richer?

I sure do like to think I would. But then again maybe it's my lack of willingness to screw over the public at large for my own selfish interests that kept me out of business school in the first place.

 

[Bates]

It is far more important for the citizens of Glendale for this deal to continue rather than the alternative.  They received back over $7 million of the subsidy from last season, it was going in the right direction.  The question now is how much damage has been done if they are even able to continue. 

If you had reached a financial agreement with someone that favors you more than them would you be willing to just ignore this agreement and let them redo the agreement just because they didn't like it?

If the "them" in your hypothetical case represented the public interest of working and middle class people who'd already lost tens if not hundreds of millions of dollars on the business in question when that money could have gone to things that would actually contribute to the public good? And when their breaking the agreement would almost certainly have the effect of ultimately making me richer?

I sure do like to think I would. But then again maybe it's my lack of willingness to screw over the public at large for my own selfish interests that kept me out of business school in the first place.

 

[Kin]

It is far more important for the citizens of Glendale for this deal to continue rather than the alternative.  They received back over $7 million of the subsidy from last season, it was going in the right direction.  The question now is how much damage has been done if they are even able to continue.

Just a post ago it was a financial agreement that favoured me more than them. Now, it's in their best interest.

I can perfectly understand a Glendale resident wanting to wash their hands of the whole thing. Regardless of the supposed ultimate benefit to them, I can understand not wanting a single additional public cent wanting to go into the pockets of millionaires for them deigning to keep this comedy of errors going.

 

[Bates]

Why can't be an agreement that favors me more than you but better than you having no agreement? 

It is far more important for the citizens of Glendale for this deal to continue rather than the alternative.  They received back over $7 million of the subsidy from last season, it was going in the right direction.  The question now is how much damage has been done if they are even able to continue.

Just a post ago it was a financial agreement that favoured me more than them. Now, it's in their best interest.

I can perfectly understand a Glendale resident wanting to wash their hands of the whole thing. Regardless of the supposed ultimate benefit to them, I can understand not wanting a single additional public cent wanting to go into the pockets of millionaires for them deigning to keep this comedy of errors going.

 

[Britishbulldog]

So, the City of Glendale kicked the Coyotes out of the Arena.

Can we please move this franchise now? I heard Las Vegas is looking for a team.

Quebec and Seattle seem to be other possibilities.

I like the Kansas City set up and location between St Louis and Denver and just south of Chicago and Minneapolis.
http://www.kansascity.com/sports/nhl/article2566841.html
http://www.sprintcenter.com/arena_info

There needs to be another 'Central' division team and I am hoping Las Vegas isn't it!


...and no offense to Seattle but I was hoping for Portland:
http://en.wikipedia.org/wiki/Moda_Center

I think Seattle obviously has the inside track though.

Either way there needs to be another team in 'Pacific' division.

Map of current NHL cities

What would make sense is let Phoenix go to Seattle/Portland, move Florida to a Central location like Kansas City and let the deep pockets of Las Vegas and the rabid fans of Quebec City buy expansion franchises.

Houston supposedly has the 25th largest capacity hockey arena in the world:
http://en.wikipedia.org/wiki/List_of_ice_hockey_arenas_by_capacity

Might work as a Central team and rival to Dallas.

 

[Fanatic]

Fascinating interview that Bob McCowan just had with Anthony leblanc (CEO of the Coyotes). It is worth listening to for anyone interested in this. I learned some things that have not seen or heard anywhere else, and my take-away is that the City of Glendale has a very thin case. Granted, I would expect nothing but that opinion from the Coyotes side, but it is a compelling case he makes.

 

[Fanatic]

p.s. My takeaways from the interview are:

1. The employee who supposedly jumped ship from the city side to the Coyotes side was fired by the city about a month before they began negotiations. His only involvement at all was when they sent him the completed deal (after his termination) and asked for his input on 3 points. That single email seems to be the only thing to hold up as making him "significantly involved for the other party". Plus his termination agreement included a clause where they could not come back on him in any legal action etc. Seems important and something I did not know before.

2. The clause that the city wants to invoke is standard business law in the state of Arizona which says that anyone materially involved for one party who then jumps ship to the other side result in the original party using that as cause for termination of an agreement anytime within 3 years of that party jumping ship.

3. The Coyotes were called into the city offices and thought it was a friendly meeting. Instead they were told that the city would like to renegotiate the contract and if the Coyotes refused them to do so then they would invoke that clause to terminate the contract.

4. The Coyotes now say that they will first seek to have a judge stop the termination in the short term, invoke an injunction and then proceed with their own suit against Glendale.

 

[Kin]

Why can't be an agreement that favors me more than you but better than you having no agreement?

Seems to me that would just be mutually beneficial, full stop.

Either way, if Glendale's elected representatives don't act in the people's best interests it'll be something they have to answer for. Right now, contrary to what you say, the city has said that their losses are increasing, not  decreasing. Given that they don't really have a reason to lie on that matter, or at the very least their finances are open to the public and any lies would be easily exposed, it seems pretty easy to accept that. Apparently they're already at 6 million in losses for the year.

 

[Bates]

Without context the $6 figure really is worthless.

Why can't be an agreement that favors me more than you but better than you having no agreement?

Seems to me that would just be mutually beneficial, full stop.

Either way, if Glendale's elected representatives don't act in the people's best interests it'll be something they have to answer for. Right now, contrary to what you say, the city has said that their losses are increasing, not  decreasing. Given that they don't really have a reason to lie on that matter, or at the very least their finances are open to the public and any lies would be easily exposed, it seems pretty easy to accept that. Apparently they're already at 6 million in losses for the year.

 

[Kin]

Plus his termination agreement included a clause where they could not come back on him in any legal action etc. Seems important and something I did not know before.

Not really. They're not coming back at the attorney in any legal action.

3. The Coyotes were called into the city offices and thought it was a friendly meeting. Instead they were told that the city would like to renegotiate the contract and if the Coyotes refused them to do so then they would invoke that clause to terminate the contract.

To me that really highlights the arrogance of the Coyotes here. If you were involved in a business arrangement with someone that was costing them millions of dollars a year and which was only agreed to by them under the very real threat that if they didn't agree you would make things much worse for them...why would they feel "friendly" towards you?

The Coyotes had Glendale over a barrel when this deal was negotiated and took full advantage. Argue point of law if you want but to expect things to be flowers and rainbows on the public side is ridiculous.

4. The Coyotes now say that they will first seek to have a judge stop the termination in the short term, invoke an injunction and then proceed with their own suit against Glendale.

Good. Maybe they'll win and Glendale can close a few schools.

 

[Kin]

Without context the $6 figure really is worthless.

It's in context. That's how much money they've lost this year on the deal. They expect it to be at 8.7 million by the end of the year, which would be a 7% increase on their losses from a year before.

Again, if they were lying...public finances aren't secret. They're public record. It would be the easiest thing in the world for the Coyotes to say that it wasn't true...they're not.

 

[Bates]

And from the other side:

http://www.sportsnet.ca/hockey/nhl/glendale-to-receive-revenue-increase-from-coyotes/

Without context the $6 figure really is worthless.

It's in context. That's how much money they've lost this year on the deal. They expect it to be at 8.7 million by the end of the year, which would be a 7% increase on their losses from a year before.

Again, if they were lying...public finances aren't secret. They're public record.

 

[Kin]

And from the other side:

http://www.sportsnet.ca/hockey/nhl/glendale-to-receive-revenue-increase-from-coyotes/

Admittedly, I didn't go to business school but even I can tell you that an increase in revenues doesn't mean an increase in profits or, in this case, a decrease in losses.

Again, public finances are public. The Coyotes' finances aren't.