Arizona Coyotes Taking Legal Action After City Of Glendale Votes To End Arena Lease

From as recently as Tuesday morning, the future looked bright for the Arizona Coyotes. That was until the City of Glendale, where Gila River Arena is located, announced that they would be voting Wednesday night as to whether or not they would be ending the Coyotes arena lease. The future of the Coyotes now seems to be more up-in-the-air than ever, amidst the latest obstacle that the club is facing.

“This action by the City of Glendale is completely ludicrous, especially in light of the fact that myself and Andrew Barroway visited with the City yesterday and the particulars of this were never raised.  In fact, we, to this moment, have not been advised of this other than the notification on the City website,” said Coyotes Co-owner, President and CEO on Tuesday. “The City of Glendale is displaying a complete lack of good faith, business acumen or an understanding of a business partnership. We want to reassure our great fans that the Arizona Coyotes are committed to Glendale and playing at Gila River Arena.”

In 2013, the Coyotes and the City of Glendale signed a new deal that was to keep the team in Glendale for 15-years, worth $225 million dollars. Part of the Coyotes ownership group, Anthony LeBlanc and majority owner Andrew Barroway met with city officials on Monday after some Glendale council members became concerned about the current deal. Barroway and LeBlanc thought the situation was sorted when they left, but were surprised to find out later that Glendale had called for a vote to cancel the arena lease.

The NHL issued a statement on Thursday saying:

“The National Hockey League stands by, and will fully support, the Arizona Coyotes in their efforts to vindicate their contractual rights in response to last night’s outrageous and irresponsible action by the City of Glendale. We continue to proceed on the basis that the Coyotes will remain in Glendale and will be playing their home games at Gila River Arena.”

Wednesday night’s meeting was open to the public, and even with speakers expressing their strong opposition to the situation, the final vote was 5-2 in favor of ending the lease. This sparked outrage from the Coyotes organization (and even local businesses), prompting them to decide to prepare to take legal action.

“This is a blatant attempt to renege on a valid contract that was negotiated fairly and in good faith and in compliance with all laws and procedures,” said Coyotes attorney Nick Wood in a statement released before Wednesday night’s meeting. “In the event the City Council initiates any 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.”

What is the reason behind this seemingly sudden decision? Concerns arose when the council members began to question where the $15 million dollars the city pays each year to IceArizona, the ownership group that bought the Coyotes in 2013, actually goes. The council said that they wanted to “renegotiate” the contract, but the Coyotes said that this was not an option.

“Why would we even negotiate a deal that is less than two years old and has 13 years remaining?” LeBlanc said per Fox Sports Arizona. “What we witnessed here tonight is possibly the most shameful exhibition of government I have ever witnessed.

The biggest point that the city is using as their reasoning is violation of conflict of interest from ex-city employee Craig Tindall who went to work for the Coyotes in 2013. He resigned from his position as the attorney of the City of Glendale in February of 2013. April 1, 2013 was when his resignation became official, but he was kept on a six-month retainer where he was payed his salary through September 2013. He started working alongside the Coyotes in August. According to an article from Fox Sports Arizona’s Craig Morgan, the argument that Glendale is using is “flawed”. The city’s accusation that Tindall spent “significant” time assisting in the Coyotes current negotiation is not true, which could put Glendale in some serious trouble.

“This is to protect the taxpayers,” Mayor Jerry Weiers said about the situation. “I believe they violated the law.”

The Coyotes are working on securing a temporary restraining order so that the city cannot end their current deal. Attorney Nick Wood states that the lawsuit that the organization plans on filing could be upwards of “hundreds of millions of dollars”, which some reports say is around $200 million. If Glendale’s accusations are not found as a conflict of interest, not only would the deal stay in place, but they are at risk of losing double the amount that they are already set to pay due to damages.

“We are disappointed with the city’s decision to violate its obligations under the agreement that was entered into and duly approved only two years ago,” said LeBlanc Wednesday night. “We will exhaust any and all legal remedies against the city of Glendale for this blatant violation of its contractual obligations to us.”

The team issued the following statement on the afternoon of Friday, June 12, 2015:

“The Arizona Coyotes have acted to defend their rights and reaffirm their continuing commitment to their great fans by seeking a restraining order to stop the City of Glendale’s baseless attack on, and improper attempt to void, the Coyotes’ lawful and proper lease to play at Gila River Arena. The suit was filed in Maricopa County Superior Court against the City of Glendale, the Glendale City Council and other City officials.”

For more coverage on this ongoing issue, follow AZ Republic’s Sarah McLellan and Fox Sports Arizona’s Craig Morgan.