Ice Edge CEO says memorandum of understanding signed on new Coyotes lease

Ice Edge signs memorandum of understanding

PHOENIX — The head of Ice Edge Holdings says the company has signed a memorandum of understanding on a new lease with the city of Glendale that could pave the way for a purchase of the Phoenix Coyotes.

The city council is to vote on the proposal Tuesday.

Chief executive officer Anthony LeBlanc called it a first step and said there is much work still to be done to secure a final lease agreement.

There was no immediate word whether a second group interested in the team, headed by Chicago sports mogul Jerry Reinsdorf, has reached a similar agreement.

The NHL bought the Coyotes out of bankruptcy last year and is trying to find a buyer that would keep the team in Glendale.

Both prospective buyers say there is no way a team can be financially viable in Glendale without a new lease to play at Jobing.com Arena, which the city built for the Coyotes in 2003 at a cost of $180 million.

The city was to reveal details of the agreement when it released the council meeting agenda later Friday.

The NHL has said that if no local buyer is found by the end of June, the league will look to move the franchise out of Arizona.

Grant Woods, a former Arizona attorney general who has represented Ice Edge in talks with the city the last three weeks, said its agreement contains no “out clause” that would allow the franchise to move. There have been several reports that Reinsdorf would seek an out clause that could be exercised if certain financial benchmarks aren’t met.

Any lease approved by the city council would face a possible lawsuit from the conservative Goldwater Institute over a provision of the state constitution that prohibits giving away public money, but Woods said he’s comfortable that at the Ice Edge agreement would meet any of the institute’s concerns.

Presuming the city also reached a deal with the Reinsdorf group, Woods said he anticipated the city council approving both agreements “and the NHL can decide who to sell the team to.”

Woods described his clients as “die-hard hockey fans,” who would finance the purchase through bank loans, along with their own money. Reinsdorf, by all accounts, is no big fan of the game and is interested in the hockey team strictly as an investment. He owns baseball’s Chicago White Sox and the NBA’s Chicago Bulls. The NHL says it was on the brink of selling the team to the Reinsdorf group last May when Coyotes owner Jerry Moyes abruptly took the team into bankruptcy, to the league’s great surprise.

The Coyotes have lost tens of millions of dollars each of the past several seasons and never have turned a profit since the franchise moved from Winnipeg in 1996. Court documents showed the Coyotes had an operating loss of $54.8 million in 2008.

Moyes planned to sell the team in bankruptcy to Canadian billionaire Jim Balsillie contingent on moving it to Hamilton, Ontario.

The NHL vehemently fought the plan and, when no local buyer came through, purchased the team in U.S. Bankruptcy Court for about $140 million. Judge Redfield Baum refused to go along with Balsillie’s bid to force the franchise’s move despite the opposition of the league.

Moyes, who says he lost some $300 million on his investment with the team, contends hockey can never succeed in the desert.

On the ice, the Coyotes have been one of the biggest surprises in sports this season, setting franchise records for wins and points while earning their first playoff berth since 2002. The team clinched home ice in the first round by beating Nashville Wednesday night in front of the Coyotes’ fourth consecutive sellout crowd.

Ice Edge is a group of Canadian and U.S. businessmen from the East, and its purchase would be financed with the help of bank loans, Woods said. That financing has been assured, he said.

LeBlanc, coincidentally, is a former executive at Research In Motion, the company founded by Balsillie that manufactures the Blackberry.

Reinsdorf’s group and Ice Edge both withdrew their bids to buy the team when it was in bankruptcy, citing the inability to reach a new lease agreement.