Matthew Hulsizer agrees to concession
Chicago businessman Matthew Hulsizer has agreed to a major concession with the Goldwater Institute, a public interest group, in a last-ditch effort to complete his deal to buy the Phoenix Coyotes.
Hulsizer has agreed to cover any shortfalls in parking revenues that are at the heart of the Goldwater Institute's threat of a lawsuit over the proposed lease agreement between the City of Glendale and Hulsizer.
Hulsizer told ESPN.com Sunday night he still believes the agreement between he and his investors with the City of Glendale is legal, but felt it was more important for the deal to move forward and so made the concessions.
"The situation was stuck and we need to move forward. While we still believe the original deal is legal we wanted to make thing simple," Hulsizer said in an e-mail.
The move follows behind-the-scenes discussions involving Arizona senator John McCain and former state attorney general Grant Woods, both of whom believe it's important that the Coyotes remain in Glendale, and officials with Goldwater.
Appearing on Fox Sports Arizona during the first intermission of Sunday's game between Phoenix and Chicago, Hulsizer said he felt this made it "brain dead simple" that Goldwater's objections to the lease had been met and the sale of municipal bonds crucial to the deal being closed should go through.
Goldwater's threat of a suit has stalled sale of municipal bonds that will generate a $100 million that will go to Hulsizer and will be used to purchase the team from the NHL. Goldwater's interference in the bond sale has also driven up the interest rate potential buyers have been demanding.
It's unknown whether the change in heart by Hulsizer will be enough to get the Goldwater Institute to back off on their threats to sue the municipality if the lease agreement goes through.
Goldwater has insisted that they don't believe parking revenues will cover the $100 million meaning the lease agreement would run afoul of state "gift" laws.
Various estimates of parking revenues over the course of the 30-year lease have been hotly debated, but sources told ESPN.com the low-ball figure would be between $60-80 million.
Assuming that parking projections will be established on an annual basis, Hulsizer's concessions would see him make up shortfalls annually.
Once the deal is closed the City of Glendale immediately gets $25 million back that they had to put in escrow to cover operating losses this season, while the city tried to find an owner for the team, Hulsizer explained.
"The key question for Goldwater has been around the $100 million from the city. The city gets back $25 million from the NHL and now we are guaranteeing $75 million additional revenue from the team. This should address all remaining issues so the city can move forward at the lowest possible rate," Hulsizer said in an e-mail.
Hulsizer presented a letter to the Goldwater Institute Friday outlining his concessions, and multiple sources told ESPN.com Goldwater has not responded to Hulsizer's change of heart. Those concessions came after some intervention by McCain and Woods in recent days.
"It is to the greater good of the State of Arizona that the Coyotes remain here," McCain told Fox Sports Arizona during the second intermission of Sunday night's game.
"Obviously I'm not negotiating but I have been encouraging parties including the board members of the Goldwater Institute, including the Goldwater Institute itself. We need to have the Coyotes stay here. If they leave it isn't just a zero sum game it is a very severe negative impact on the State of Arizona."
Woods, who acted for the Ice Edge group in their earlier attempt to establish a new lease agreement with the City of Glendale and purchase the team from the NHL, said during the intermission interview he believes Hulsizer's agreement specifically addresses Goldwater's concerns about the lease agreement.
"Mr. Hulsizer has now stepped forward recognizing that concern. He didn't have to do it but he's done it. And I think that makes this really a no-brainer," Wood said.
Both McCain and Woods praised Goldwater's stand in protecting the taxpayers but both suggested it was now time to move on.
"So they've performed a good service. Now we need to have them move on to other projects. We need to close this deal and keep the Coyotes here," Woods said.
Goldwater officials did not respond to requests for comment Sunday evening.
One thing is clear, though, and that is if the Goldwater Institute continues to oppose the lease agreement in spite of Hulsizer's concessions, the bonds will not be sold, the deal will die and the Coyotes will move to Winnipeg.
On the other hand, multiple sources have told ESPN.com that buyers for the bonds are in place, and that if Goldwater backs off the bonds will be sold quickly.
That would set in motion the final mechanisms for the lease agreement to be completed and the sale of the team to Hulsizer by the NHL to be finalized. All of this could be accomplished within a day or two once the bonds are sold.
Scott Burnside covers the NHL for ESPN.com.
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