Glendale’s Coyote Escrow

Glendale has transferred $25 million from its $415 million enterprise fund investment account to a special escrow account in its efforts to keep the National Hockey League’s Phoenix Coyotes in the city’s Jobing.com Arena for the 2010-11 season.

Last week’s transfer was required under Glendale’s agreement with the NHL, which purchased the bankrupt team for $140 million in 2009.

The Phoenix suburb expected to finance the $25 million pledge through a special tax and bonding district around the arena that would include surrounding retail and business development. However, it could not establish one before last week’s deadline.

Glendale agreed to reimburse the league for actual cash losses incurred by the team and arena management beginning in July. City officials said they expect to recommend a qualified buyer for the team to the NHL by the end of June, which would eliminate the need for reimbursements from the fund.

The Glendale Municipal Property Corp. issued $155 million of sales tax bonds in 2003 to finance the hockey arena.

The debt is rated AA by Standard & Poor’s and Aa3 by Moody’s.

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