Phoenix Coyotes avoid relocation after Glendale ratifies lease agreement

Phoenix Coyotes general manager Don Maloney watches his team during NHL hockey practice in Glendale, Ariz., Jan, 15, 2013 (AP / Ross D. Franklin)

GLENDALE, Ariz. -- The Phoenix Coyotes took a big step toward stability Tuesday night when the Glendale City Council ratified an arena lease agreement with a prospective owner of the franchise.

After making a few alterations, the council voted 4-3 in favour on a 15-year, $225 million lease agreement with Renaissance Sports & Entertainment during a special session.

"Everybody who's followed this saga has said decide something or just shoot us," Coyotes general manager Don Maloney said. "Fortunately, we got the result we needed to stay in a great place and a great hockey town."

The vote clears the way for RSE to purchase the Coyotes from the NHL, which has been running the team the past four years.

RSE is led by Canadian businessmen George Gosbee and Anthony LeBlanc.

The decision had been in doubt as RSE and the city went through tense negotiations over the past few weeks. The Coyotes may have relocated to another municipality, potentially Quebec City, if an agreement was not reached.

RSE may have swung the vote in its favour earlier in the day when it announced a partnership with Global Spectrum, which owns the Philadelphia Flyers, to help manage Jobing.com Arena.

RSE must finalize its lease agreement with Glendale and its purchase of the team by Aug. 5.

"We went into this hopeful and we're very, very happy, very grateful not only to the councilmembers here, but all the residents and taxpayers here," RSE partner Anthony LeBlanc said. "We are looking forward to a solid partnership and making this a (success) for all those concerned."

The meeting attracted hundreds of Coyotes fans and Glendale residents, who showed their pleasure or displeasure in the chambers by putting their thumbs up and down. An overflow crowd downstairs in the employee lounge also cheered and booed at a closed-circuit monitor.

The meeting also was attended by Coyotes General Manager Don Maloney and player Derek Morris, along with NHL Commissioner and Deputy Commissioner Bill Daly, who received a rare standing ovation as they entered the chambers.

RSE reached a deal to buy the Coyotes from the NHL last month and spent several weeks negotiating with Glendale for an arena lease deal, the final hurdle in its attempt to purchase the franchise.

After weeks of back and forth, RSE accepted numerous revisions to an initial draft of the lease agreement, including a $50,000 payment to the city if the Coyotes play less than 41 games, but stood firm on an out clause for the city.

The city had asked for the clause to match a provision that allows RSE to relocate the team after five years or if it accrues $50 million in losses.

Nick Wood, an attorney representing RSE, said the out clause was out of the question, but made a concession on the deal, offering to pay the city any losses in revenue above $6 million should the team be relocated.

After a long debate, the council agreed to vote on an amended lease agreement without the clause.

"It's a sad day when you put sports, a leisure, in front of our future, which is the kids," said councilmember Norma Alvarez, who voted against the deal.

The city also was concerned about a $15 million fee to manage Jobing.com Arena.

Glendale budgeted $6 million to operate the arena, but RSE projected between $8.5 and $11 million in revenue from arena naming rights, parking, rent, ticket surcharges and other streams to make up the difference.

RSE added a provision in the deal that called for it to pay the difference if revenues don't cover the $6 million the city has budgeted to run the arena.

After a council meeting that lasted about four hours, the council voted in favour of the deal despite reservations from some councilmembers.

The partnership with Global Spectrum may have been the turning point.

A subsidiary of international sports and entertainment firm Comcast-Spectator, Philadelphia-based Global Spectrum manages 113 facilities around the world, including the Wells Fargo Center, home of the Flyers. The company also operates University of Phoenix Stadium, the home of the Arizona Cardinals that's on the south end of the Westgate Entertainment District where Jobing.com Arena is located.

RSE has projected $8.5 million to $11 million in revenue to Glendale, which budgeted $6 million to manage Jobing.com Arena.

Bringing in Global Spectrum would likely increase the number of non-hockey event dates at the arena and LeBlanc called the partnership the final piece of the deal.

"This is not a perfect deal by any means, but it's certainly the best deal we've had," said councilmember Manny Martinez, who voted for the agreement.

The NHL has operated the Coyotes since former owner Jerry Moyes took the team into bankruptcy in 2009.

After numerous suitors came forward and fell back through the years, the franchise is finally headed toward a stable future.