Tuesday, May 10, 2011
Ice Edge backs away from Coyotes
PHOENIX -- Ice Edge Holdings has withdrawn its minority interest in the proposed purchase of the Phoenix Coyotes ahead of a Glendale City Council vote that would put off finalizing any deal by as long as a year.
Ice Edge CEO Anthony LeBlanc said Tuesday that his organization had been involved in the process with the Coyotes "long enough."
Ice Edge once had tried to buy the team as the majority owner but accepted minority status when Chicago businessman Matthew Hulsizer entered the picture.
Hulsizer's efforts to buy the team from the NHL have stalled in the face of a threatened lawsuit by the Goldwater Institute watchdog group over terms of a lease agreement worked out with Glendale for the team to continue to play in Jobing.com Arena.
LeBlanc said his company would concentrate on its minor league hockey operations in Thunder Bay, Ontario. He also plans to run for political office there, he said.
The move has no serious implications on Hulsizer's bid, whom LeBlanc said would be "a terrific owner."
But Hulsizer's efforts have hit a logjam that may be impossible to break, since he has indicated he has made his last, best offer and the Goldwater Institute vows to sue if the city follows through on the deal. The institute is concerned that the generous terms of the lease violate the state's constitutional ban on subsidizing private enterprise.
The threat of a lawsuit has been a major obstacle in the city's efforts to sell $100 million in bonds to finance its part of the agreement. If those bonds can't be sold, there would be no deal with Hulsizer.
The council was prepared to vote on giving the NHL another $25 million to operate the arena -- and keep the Coyotes in town -- for the coming season. A week ago, the city turned over $25 million to the NHL to cover operating losses by the team last season.
The city may attempt to try to find a buyer that would be willing to invest more of money outright in the sale in order to make it more palatable to critics such as the Goldwater Institute. No such buyer has surfaced in two years.
Meanwhile, the Coyotes would be left without solid ownership for a third season, something that coach Dave Tippett had labeled unacceptable if the franchise is to be viable.
Despite the limitations it has operated under, Phoenix made the playoffs each of the last two seasons, losing in the first round to Detroit both times.
The Coyotes' situation has been in limbo for two years, almost to the day, since then-owner Jerry Moyes took the team into bankruptcy unbeknownst to the NHL and tried to engineer the sale to Canadian billionaire Jim Balsillie contingent on moving the franchise to Hamilton, Ontario, despite the league's vehement opposition.
A U.S. bankruptcy judge nixed that plan and the NHL wound up buying the team out of bankruptcy with the stated intention of finding a buyer who would keep the team in Arizona. That was in September of 2009.
If no local owner is found, the franchise could wind up back in Winnipeg, its home before moving to Arizona in 1996.