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Goldwater Institute sues Glendale over Phoenix Coyotes deal by Lisa Halverstadt - Jun. 13, 2012 09:34 PM The Republic | azcentral.com The Goldwater Institute is suing Glendale in an attempt to invalidate last week's City Council approval of a $324 million lease deal with a likely Phoenix Coyotes buyer. The Phoenix-based conservative watchdog group filed a complaint in Maricopa County Superior Court on Wednesday on behalf of two Glendale residents. Goldwater notes the Glendale city charter requires five of seven council members to approve emergency measures like the Coyotes deal, which was effective immediately. Four council members approved the deal with Coyotes suitor Greg Jamison, with one councilwoman absent. The group also cites the city's mandate that any service of more than $50,000 include a written request for proposals or an invitation for businesses to place bids. The charter does include exceptions, such as one that allows the city manager to bypass the bid process when it's unlikely to reduce expenses or could cause delays or unnecessary spending. In a separate Wednesday filing, Goldwater says Glendale should be held in contempt of court and its vote invalidated because of a failure to release two exhibits to the 20-year lease with Jamison before the council vote. Glendale and Goldwater are set to face off before Judge Dean Fink at 10:30a.m. Tuesday. Meanwhile, Jamison, a former San Jose Sharks chief executive, continues to work to finalize the purchase of the Coyotes from the National Hockey League in coming weeks. Goldwater President Darcy Olsen said the group sued Glendale because officials are not giving residents a voice. "All of these issues are related to the single point of having Glendale follow the law and give taxpayers the information they need and the time to be heard," Olsen said. Glendale posted the draft agreements on Monday and added backup documents leading up to a workshop last Thursday and the vote on Friday. Both meetings began at midmorning and outside the council's usual meeting time. Goldwater attempted to delay the vote because two exhibits -- documents outlining arena-management performance standards and arena budget standards -- were not posted before the vote. A judge ruled the court did not have the authority to halt the vote. The council later approved the lease, which has Glendale paying Jamison's group $10 million to $20 million annually to operate the city-owned Jobing.com Arena. Glendale has never solicited formal estimates from other groups about the costs for arena management, though a city-commissioned analysis completed in January estimated it would cost $15 million to $18 million annually to operate the arena. Former Coyotes owner Jerry Moyes reported annual operating costs of $10 million to $13 million from 2005 to 2009. Those costs were lessened by revenue of about $6 million to $7 million, according to financial statements Moyes provided Glendale. Goldwater attorneys argue that the city might have gotten a less costly arena manager if the city had bid the contract. In a statement, Glendale officials said the deal with Jamison complies with the law and provides the maximum benefit to residents over the 20-year term. "The arguments presented to the court by the Goldwater Institute and the other plaintiffs attempt to invalidate a decision by duly elected representatives of the citizens," the city said. Glendale City Attorney Craig Tindall said Monday that the documents Goldwater wants have not yet been created but will be finalized in coming weeks. He said that the documents would not substantively change the council-approved agreement and that Goldwater's actions are another example of the watchdog group inserting itself into the years-long search for a Coyotes buyer. The filings mark the latest battle between Glendale and Goldwater. Goldwater sued Glendale in 2009 after the city refused to release documents related to negotiations with potential Coyotes buyers on the basis that releasing the documents would harm talks. A judge ruled that many documents could be withheld because of their potentially negative impact on city talks with potential team buyers but ordered Glendale to release tentative agreements as soon as staffers decided to present a deal to the council. The case has continued for three years. Goldwater threatened another lawsuit last year before a deal with then-Coyotes suitor Matthew Hulsizer crumbled. The deal would have had Glendale sell bonds to pay Hulsizer $100 million, an arrangement Goldwater said amounted to an illegal subsidy. The watchdog group is also weighing whether to sue over a potential Constitutional gift-clause violation. To prevail, Goldwater would need to show Glendale's payments to Jamison to operate the arena are "grossly disproportionate" to what the city receives. An outside attorney hired by the city said the financial benefits of the Coyotes deal outweigh the costs. Goldwater said it can't assess whether there is a violation without seeing all the documents. Glendale and NHL officials have said they believe the lease agreement with Jamison is likely to go forward despite any lawsuit because it does not require a bond sale as the previous deal did. The lease agreement calls for all parties to bear the costs of contesting any court challenges. NHL Deputy Commissioner Bill Daly said Tuesday that the league was working with Jamison to finalize the transaction despite any legal threats. "We are not in control of the Goldwater Institute, and they will do what they think they need to do, and we will do the same," Daly said. |