Source: Glendale, Ice Edge near new agreement on Coyotes lease; NHL wants cash

Source: City, Ice Edge near lease deal for Coyotes

PHOENIX — A person close to the talks says Ice Edge Holdings is nearing agreement on a memorandum of understanding that gives the group exclusive negotiating rights with the city of Glendale on a new lease agreement for the NHL’s Phoenix Coyotes.

The agreement, a necessary step toward purchase of the franchise if it is to stay in Arizona, is expected to be finalized next week, said the person, who asked for anonymity because a formal agreement had not been reached.

Meanwhile, the NHL is asking the city for an unspecified amount of money, probably the $20 million to $25 million the franchise lost this year, to cover losses while the sale of the team is completed. The council is to act on the request at its Tuesday night meeting.

Approval of the Ice Edge memorandum, which is not on the Tuesday agenda, would confirm reports that would-be buyer Jerry Reinsdorf is out of the picture.

Ice Edge appears to be the last chance for a buyer to keep the team in Glendale.

The NHL bought the franchise out of bankruptcy last September with the stated intention of selling the team to a buyer that would keep the team in Arizona. If the Ice Edge plan falls through or the city doesn’t meet the league’s demands, the Coyotes could be sold to a buyer who would move the team. The most likely destination is Winnipeg, where the franchise was before moving to the desert in 1996.

On April 13, the city council approved a memorandum of understanding with a group headed by Reinsdorf, owner of Chicago’s White Sox and Bulls, but rejected the Ice Edge agreement.

No one was talking publicly about what went sour between Reinsdorf and the city, but Glendale officials approached Ice Edge recently to ask if they could try again.

The memorandum would have to be approved by the city council and is not a legally binding document.

The city council is being asked Tuesday to give city manager Ed Beasley authority to sign agreements that would give the NHL the money the league says is required to keep the team in Glendale.

“The NHL has expressed its intention to keep the team in Glendale,” the agenda item reads, “but has established deadlines and imposed requirements that require certain immediate financial commitments and assurances” by the city.

The item says the money would not come from the city coffers but from arena operations and the special taxing district that is to be established as part of the sale of the team and the new lease agreement.

Glendale faces the prospect of giving the NHL what it wants or finding itself with an empty arena the city built specifically for the Coyotes.

Ice Edge investors, who say they would buy the team with a combination of their money and bank financing, describe themselves as avid hockey fans and say they would not seek an out-clause in the lease agreement. Ice Edge even took out a full page ad in The Arizona Republic before the city council vote.

“Ice Edge continues to believe in the future of hockey in the valley,” the group said in a statement released Saturday. “We have held several discussions with the city of Glendale over the past few days, and those discussions continue through the weekend.”

The Coyotes are coming off a surprising season in which, despite all the ownership turmoil, the team set franchise records for wins and points. They were eliminated by the Detroit Red Wings in seven games in the first round of the playoffs. Some sort of certainty in ownership is needed as the free agency period approaches. Several Phoenix players have contracts that are expiring.