Glendale Must Show Coyotes Memos

((HT: Arizona Republic/Sanders))

Glendale must reveal by Friday records of what incentives, if any, it is offering to a new owner of the Phoenix Coyotes, a Maricopa County Superior Court judge ruled Tuesday.

The city is in negotiations with Chicago sports mogul Jerry Reinsdorf, whose investment partners have made an initial offer to buy the bankrupt NHL team and keep it in Glendale. But he wants a new lease from the city to use Jobing.com Arena.

Glendale also has talked with a second group headed by Daryl Jones of Connecticut-based investment-research company Research Edge LLC.

The Valley-based Goldwater Institute, a conservative watchdog opposed to government subsidies for private businesses, sued Glendale for its records of negotiations with potential buyers. The institute warns that Glendale may offer to give back millions of dollars the professional hockey team pays yearly for rent and other fees at the arena, just to keep the team in town.

City officials have maintained they won't sacrifice any revenue. Rather, they will work to help the Coyotes raise money in other ways, such as higher ticket fees or cost-saving measures.

Still, Glendale sought to keep under wraps most of the e-mails, memos and other documents of negotiations that Goldwater requested, fearing they could reveal the city's "bargaining chips" and destroy the possibility of a favorable deal.

After the judge's ruling, both Goldwater and Glendale claimed victory.

Goldwater attorney Carrie Ann Sitren called the ruling a win for Glendale residents.

"All we want to know is exactly what the city has told the potential bidders. And we want to know what the potential bidders have asked of the city," she said. "Certainly, the taxpayer has the right to know."

Glendale, on the other hand, pointed to Judge Edward Burke's conclusion that immediate disclosure of negotiation records could have a "chilling effect" on bidders, possibly forcing some to drop out.

"We are pleased that the city can continue to negotiate vigorously to achieve the best results for Glendale and the taxpayers," the city said in a statement Tuesday.

In his decision, Burke ordered Glendale to release documents detailing negotiations with Coyotes bidders by the earlier of two dates: as soon as the City Council schedules a meeting to vote on a proposed deal or by the time a potential buyer submits a final bid to U.S. Bankruptcy Court. The deadline for final bids is Friday.

In addition, the city is required to release all related documents as they are created until the U.S. Bankruptcy Court judge decides Aug. 5 whether to accept bids for the Glendale team. If those bids fail, the bankruptcy judge would consider selling the Coyotes to buyers like Canadian businessman Jim Balsillie, who would relocate the team. The city's negotiations at that point would be moot.

Burke gave Glendale some leeway, however. For instance, the city does not have to disclose notes taken in meetings, records from negotiations with potential bidders who failed to follow through on a final offer, alternatives the city may be considering in subsequent rounds of negotiations with a bidder, or documents sealed during bankruptcy proceedings.

The city produced some documents last week to Goldwater and The Republic, but they were heavily blacked out.