Glendale gets Coyotes to agree to two-year lease that’s slightly less sucktastic than old one

That was quick: Just six weeks after the city of Glendale acted to terminate the Arizona Coyotes‘ sweetheart lease, the two sides arrived at a revised deal yesterday. Okay, it’s only a deal for a new lease for the next two years, but given that just last month everybody was all lawsuits and vitriol, that’s still impressive.

The old deal, to recap, involved Glendale paying the Coyotes owners $15 million a year for each of the next 15 years, for the privilege of having the NHL team bless the city’s publicly built arena with its presence. (And operate the arena, something that the Coyotes owners insist is worth a ton of money, though others disagree.) In exchange, the city was getting back about $6.7 million a year in ticket taxes, parking revenues, rent, and other sundries, leaving it about $8 million a year in the hole. And while the city couldn’t back out (until it found a loophole that let it do so), the team could break the lease and leave (or renegotiate) at any point.

The new deal breaks down like this:

  • Instead of $15 million a year, Glendale pays the Coyotes owners only $6.5 million a year.
  • The Coyotes owners keep all ticket surcharges and parking fees, which the Globe and Mail says will be worth about $6 million a year, though I had it at more like $5.4 million.
  • The new lease only lasts until summer of 2017, after which everyone has to figure this out all over again.

If you can do simple math — which isn’t me this morning after staying out late at this, but I’m going to give it a shot anyway — Glendale just saved about $5 million over the next two years, plus got out of another 11 years of commitment to those $15 million a year payments. So that’s something!

On the other hand, this mostly just kicks the can down the road to 2017, which has some advantages for Coyotes owner Anthony LeBlanc: The NHL expansion situation should be resolved by then, and there should be more clarity on whether a new arena is likely in Seattle, allowing LeBlanc to level a more fleshed-out move threat then if he wants. Also, Glendale has mayoral and council elections in 2016, so LeBlanc can always hold out hope of getting more amenable negotiating partners into City Hall by then.

On the other other hand, LeBlanc could have used his out clause to do that anyway, so at least current mayor Jerry Weiers and the current council (which is supposed to vote on the new plan this morning) got something out of breaking the lease. And the Coyotes will continue to have the league’s most entertaining ownership and arena saga for the foreseeable future, which is good, because for sure nobody wants to watch them do whatever they claim is playing hockey.

Vegas, Quebec now frontrunners for NHL expansion teams, because nobody else bothered to bid

Official bids to own an NHL expansion franchise (assuming the NHL actually expands) were due yesterday, and of the several motley candidates, only two ended up submitting an actual bid, along with a $2 million non-refundable deposit: The Bill Foley/Maloof brothers group in Las Vegas, and Canadian telecom company Quebecor in Quebec City.

If the neo-Quebec Nordiques and Las Vegas Black Knights (that’s seriously what they’re considering calling the team — one can only hope their team motto will be “Tis but a flesh wound!“) happen, it will be because the NHL thinks it can get $500 million apiece in expansion fees, which would be worth the roughly $20 million a year in TV revenues the other teams would have to give up to each of the new franchises. Neither city would be a guaranteed success — Quebec probably has a better shot, if only because people actually watch hockey there, but they’d both be among the NHL’s smallest markets — but then, if there were an obvious expansion market, it would already have a team by now.

There was one bigger market considering a bid, or actually two bids: Seattle, where both Chris Hansen and Ray Bartoszek were reportedly interested in teams for their prospective arenas in downtown Seattle and suburban Tukwila. Neither ended up bidding, though, which would leave Seattle looking at being the home for a relocated team at some point, assuming either Hansen or Bartoszek is really that interested in the NHL.

And that, ultimately, is what the NHL would be giving up here, even more than a sliver of TV revenues: leverage. Right now, cities undergoing arena battles face a slew of marginally believable bogeymen where their team could be said to be relocating to if they don’t agree to demands. If Vegas and Quebec get new teams, the league would pretty much be down to Seattle as a threat, and while one city will certainly suffice for this (look at what the NFL has done with L.A.), it’s less than ideal.

All of which is to say that Glendale officials should probably feel comfortable taking a hard line with the Arizona Coyotes owners in their lease battle. There’s reportedly been some progress in those talks, but if the worst-case scenario ends up being that the Coyotes might move back to a new arena in Phoenix, leaving that city stuck with how to keep afloat a money-losing franchise with subsidies, that’s the kind of chance that Glendale should feel comfortable taking.

UPDATE: Deadspin thinks that this is going to hurt the NHL’s leverage in getting the highest price for expansion teams, since now they can’t get a bidding war going. I’m less sure — the league can still refuse to assign any new teams at all if it doesn’t get what it wants — but this certainly doesn’t help the NHL’s racket, let’s put it that way.

Red Wings owner Mike Ilitch just wrote John Oliver’s show for next week

If you slept through the last week, this headline from Detroit Curbed probably has you utterly baffled:

Ilitch Responds to John Oliver’s Critique of Stadium Deal

Yes, that’s the owner of the Detroit Red Wings (and Detroit Tigers, and Little Caesar’s Pizza) issuing a press statement in response to an HBO comedian’s criticism of his deal to get $300 million in public subsidies for a new hockey arena. And what was Ilitch’s response?

“This project is about so much more than a world-class sports and entertainment arena; it’s about transforming a core part of our city for the benefit of the entire community,” the statement said. “The new Detroit arena and The District Detroit will create 8,300 construction and construction-related jobs, as well as at least 1,100 permanent jobs. To date, the Detroit Downtown Development Authority has approved nine contracts worth $121 million, of which Detroit-based and -headquartered businesses have won more than 88% — or $106 million. Initiatives of this size, scope and impact — $1.8 billion dollars for our city, region and state — are almost universally public-private partnerships. The majority of this development is being privately financed, and no City of Detroit general funds are involved whatsoever.”

That doesn’t actually counter any of Oliver’s criticisms, which amounted to pointing out that 1) Ilitch is getting $280 million in public funds, 2) Ilitch is worth an estimated $5.1 billion, 3) Detroit filed for bankruptcy the week before all this was approved, and 4) Little Caesar’s Crazy Bread sucks. In fact, the majority of the development is not privately financed (it’s 58% public, even by the Detroit Free Press’s conservative math), and while city general funds aren’t being used, development funds that would otherwise go to other city projects are, as is a gift of free city land.

In short: Watch John Oliver’s show next week, because he just got handed a whole lot of new material. Thanks, funnyman Mike Ilitch!

Stadiums can be anchors for related development, say newspapers in search of cheap headlines

You know what I missed while I was away? Having the time to read long, misinformed articles about new stadium projects and how they’re just totally different from those old bad stadium projects of a couple of decades ago. Got anything like that for me, Google News?

With the era of standalone, isolated stadiums largely over, sports team owners increasingly are taking on the role of developer and using their stadiums as anchors for entertainment districts or retail and residential developments.

Oh, yeah, that’s the stuff.

The article in question is from the Tampa Tribune’s Christopher O’Donnell, and argues that this newfangled stadium-plus-other-development model being used by teams like the Atlanta Braves and Detroit Red Wings (or “Redwings,” as he calls them) could be used by the Tampa Bay Rays for a new stadium as well. It ignores the fact that these stadium-plus projects aren’t especially new, going back well over a decade (the St. Louis Cardinals‘ “ballpark village” was one of the earlier ones, but I’m sure I’m forgetting others), and mostly ignores, aside from a comment by stadium architecture consultant Philip Bess (who O’Donnell calls “Phillip” — fired all the copy editors, did you, Tampa Tribune?), the problem that if development around a stadium were profitable enough to pay off a stadium, teams would be able to pursue this strategy without public subsidies. Not to mention that if stadium-related development is profitable it could be pursued without the money suck of a new stadium attached, that it could just end up displacing development that otherwise would have taken place somewhere else in town, that development around stadiums has typically appeared years late when it shows up at all, etc., etc.

Anyway, good to see that these articles still pop up every once in a while for me to throw rocks at, and — whoa there!

The new Minnesota Vikings football stadium, to be completed a year from now, is helping draw nearby office towers, upscale housing and other developments, according to its supporters.

Guys! One article at a time, please! I’m still getting back up to speed here.

Bucks arena removed from state budget, film at 11

I’m on WiFi made of tin cans and string this morning, but wanted to update you briefly on today’s news:

  • There’s a Wisconsin state budget plan, and the Milwaukee Bucks arena proposal isn’t in it. That doesn’t kill the deal, but it does make passage even dicier, especially in the state senate.
  • The New York Post says there’s a deal to move the Arizona Coyotes to Las Vegas, which the NHL has denied in especially strong language, calling it “garbage.” (Unless they mean the Post itself is garbage, which, well, point.)
  • Minnesota United‘s owners are expected to ask MLS for an extension on their July 1 stadium deadline. Not that anyone ever said what would happen when the deadline was reached, so who knows what an extension would mean, but anyway.

And that’s it for now. Will try to provide further updates later, interweb connectivity willing.

Columbus arena sparks opening of convenience store, bringing Twizzlers to struggling local economy

And now, here is an actual newspaper article from Columbus boasting about how the city’s new hockey arena prompted the opening of a 1300-square-foot convenience store:

“That’s the ideal tenant for that space,” said retail analyst Chris Boring, principal at Boulevard Strategies. “They’re not just filling space.”

With so many visitors, office workers and residents within a block or two of Nationwide Arena and the nearby Greater Columbus Convention Center, “it’s a no-brainer,” Boring said. “There are all kinds of places to eat and drink in the Arena District, but what if you just want a candy bar or a bottle of water? There’s really no place right now for that.”

In related news, the Chicago suburb of Bridgeview just sold another $16 million worth of bonds to help pay off its money-losing Chicago Fire MLS stadium, but this year a new gas station opened nearby.

NHL to take expansion bids from Vegas, Quebec, Seattle, etc. because MONEYYYYYY

The NHL is taking bids on expansion franchises starting July 6, which doesn’t necessarily mean it’s going to expand, but does mean it’s testing the waters. And given the price tag, it’s easy to see why:

That’s kind of aggressive, considering that Forbes estimates the average NHL team to be worth $490 million, and given the markets we’d be talking about here (more on that in a minute), these teams would be below average. But then, the magazine’s team value figures always seem to lag a bit behind actual sale prices — as Forbes notes, there’s a bit of a bubble thanks to the fact that “Wall Street guys like Joshua Harris (New Jersey Devils) and Andrew Barroway (trying to buy a controlling interest in the Arizona Coyotes) are willing to pay a lot of money for hockey teams that lose money.” (It also doesn’t hurt that they can get huge tax breaks on their purchase price.)

The next question, obviously, is where, and everybody from Deadspin to the New York Times is assuming that one of the cities will be Las Vegas. This seems pretty daft from here — Las Vegas would be the second-smallest NHL TV market (ahead of only Buffalo), it’s in the middle of the Sun Belt where hockey franchises go to die, and it has a relatively poor permanent population. (A proposed Vegas team has managed to get $150 deposits on 11,500 season tickets, though those are refundable if there’s no team starting in 2016.) But it does have a new arena going up, and those things are guaranteed gold mines, right?

If Vegas were one team, the other would likely be either Quebec (where telecom giant Quebecor is almost certain to throw its hat in the ring) or Seattle (which has interest but still no solid NHL arena plan). Quebec would actually be the smallest media market in the NHL (smaller than Flint, Michigan!), but it’s in Canada, so maybe that compensates? Also, new arena!

If nothing else, all this means that Glendale should probably feel relatively secure in playing hardball with the Coyotes owners over their lease, since the NHL is unlikely to encourage the team to move to a new city if that would jeopardize a half-billion dollars in expansion fees. And with that, let’s go look as some photos of the under-construction Las Vegas arena:

Yeah, that, um, looks like an arena. With two levels of luxury suites, which I guess is standard these days, but makes for just awful views from the top deck. But hey, not like anyone’s likely to be sitting up there anyway, amirite?

Glendale doubles down on axing Coyotes lease, as NHL floats move threat rumors

Notwithstanding that “opportunity [for] dialogue” that Mayor Jerry Weiers mentioned last week, the Glendale city council yesterday reiterated that it’s moving to terminate its lease with the Arizona Coyotes, though it’s happy to renegotiate a new lease that doesn’t, you know, suck. The Coyotes management responded that it expects the city to honor the old lease, and until this all ends up in front of a judge, that’s pretty much going to be that.

Except, of course, for the NHL to be anonymously leaking threats that the Coyotes will move if this isn’t resolved:

Arizona Coyotes officials will explore relocation if the team loses a legal battle with the city of Glendale, an NHL source confirmed to TSN.

The source said team officials believe they can raise the cash required to pay other NHL team owners a relocation fee after an ownership shakeup this week.

Well, duh — I don’t think anyone thought a relocation fee was going to be the holdup if the Coyotes owners want to move. The bigger problems are 1) finding another city with an arena ready to move to that 2) would offer anything close to as generous a lease as the one the Coyotes are trying to enforce in Glendale and 3) overcoming league commissioner Gary Bettman’s commitment to hockey in the desert as his lasting legacy. Not that all that couldn’t happen eventually, of course, but jeez, the team had a lease option already to opt out as soon as next year — if they weren’t already “exploring relocation,” even just as a Plan B, they’d be subject to getting kicked out of the fraternity of sports team owners. But still, nice work, TSN senior corresponden Rick Westhead, at getting an exclusive scoop that just required reprinting without attribution what a guy at the league office no doubt wanted you to reprint.

Coyotes owners still threatening lawsuit vs. Glendale, but settle for restraining order for now

And while we’re on the topic of lawsuits, the Arizona Coyotes successfully got their temporary restraining order on Friday against the city of Glendale vacating their lease. That’s no real surprise, as for a TRO you pretty much just have to show that you’d be damaged if the action went through and then was later found to be illegal — the judge in the case didn’t even indicate whether Glendale has to keep making its $15 million a year “operating subsidy” payments to the Coyotes owners while the restraining order is in place, so it doesn’t mean a whole heck of a lot.

We’re still all waiting on that promised $200 million lawsuit, meanwhile, which apparently needs to wait on the city actually informing the Coyotes officially of the lease termination, and also maybe until the Coyotes lawyers find a reason why they picked $200 million as the amount of damages. That’s $30 million more, it’s worth noting, than the entire team is worth based on its 2013 sale price.

And then there’s this:

Meanwhile, the city said it would hold a closed-door executive session on Tuesday following a possible breakthrough in the dispute.

“An opportunity for the two of us to discuss the issues has presented itself, and I am optimistic that with continued dialogue we can come to an agreement that satisfies both parties,” [Mayor Jerry] Weiers said.

Is it possible the Coyotes are willing to cut Glendale a break in exchange for keeping alive their annual city paychecks? Is Weiers backing down out of fear of a lawsuit? We’ll find out more tomorrow, maybe.

Coyotes threatening to sue Glendale for $200m, because in America you can sue for whatever you want

Two days into the brave new world of Glendale terminating the Arizona Coyotes‘ lease, and the first lawsuit has been announced! Let’s listen in:

“What Glendale did is outrageous, irrational and cannot be condoned,” Bettman said.

Wait, sorry, that’s the first Gary Bettman press statement. Let’s see, lawsuit, lawsuit, here we go:

After the meeting, attorney Nicholas Wood said the team would file for injunctive relief and a temporary restraining order, and file a $200 million lawsuit against the City.

Filing for an injunction? Makes sense. TRO? Also makes sense, especially since that’s just another form of injunction. Seeking $200 million in damages? That seems like it was just pulled out of somebody’s butt as a nice round number. (Glendale doesn’t even owe the Coyotes owners $200 million remaining on its lease subsidy deal, and in any event if a judge rules that the lease can’t be broken, the Coyotes still get that money.)

So where did the Coyotes get that number? Here’s a tweet from Wood that doesn’t shed any light on it, and here are articles from Yahoo! and NBC Sports that don’t either, and the Arizona Republic, and — okay, everyone is just repeating the one thing that Wood said without any more information, so we can stop looking now. I’d call the Coyotes myself, but it’s like 3 in the morning there (note: time zones not actually to scale), so it will have to remain a mystery for now.

Let’s see, what else we got today? Any more big round numbers pulled out of butts?

I think one of the consequences could be no NHL expansion team in Las Vegas, at least not in the near term. Same thing with expanding to Seattle. The league presumably would have to add two teams to keep a balanced schedule. After all, how could commissioner Gary Bettman add two more franchises to the 30-team league while there is so much uncertainty over the state of the Arizona franchise?

That could mean the NHL says goodbye to the $500 million expansion fee it was reportedly looking to get for each expansion team. adding a team in Las Vegas. That works out to $33 million per owner down the drain for the time being.

Yeah, that’s the stuff. I feel like I should chime in with some giant numbers of my own — maybe how much the newspaper industry in Arizona will suffer if this Coyotes saga ever finally drags to a conclusion — but the “billion” key on my laptop is broken.