DALLAS — Glendale, Ariz., is in negotiations to sell the Phoenix Coyotes to a former National Hockey League team official in a deal that will not require a bond issue.
Greg Jamison, former chief executive of the San Jose Sharks, is bidding against another unidentified group of potential owners, officials said.
Glendale and the NHL, the team's current owner began looking for a new owner when the previous bidder, Matthew Hulsizer, backed out due to the city's finance plan unraveling.
Glendale had planned to issue $197 million of bonds to provide Hulsizer the money to buy the team. The threat of a lawsuit by the conservative Goldwater Institute think tank in Scottsdale prevented the bond sale.
When the city officially abandoned plans to issue bonds in June, Standard & Poor's took its sales tax bonds off negative watch, where they had been since February. General obligation ratings were affirmed at AA-plus.
Moody's Investors Service downgraded Glendale's GO rating to Aa2 from Aa1 while dropping the senior-lien excise tax rating to Aa3 from Aa2 in February and has not revised the rating.
The rating on the $107 million of second-lien excise tax revenue bonds that were scheduled to be issued for the arena fell to A1 from Aa3, and the third-lien bonds dropped to A2 from Aa3.
With no details forthcoming about the negotiations to sell the team, Glendale officials have not said how they plan to continue covering the Coyotes' losses under a new owner. So far, the city has agreed to pay the NHL $50 million, $25 million each for the 2010-2011 and 2011-2012 seasons, to compensate for losses from operating the team in Arizona.
While the negotiations with Hulsizer were underway, a potential buyer who wanted to move the Coyotes back to their original home in Winnipeg, Canada, was waiting to scoop up the team if a deal fell through. That ownership group ultimately bought the Atlanta Thrashers and moved them to Winnipeg instead.
Glendale built the $180 million Jobing.com arena for the Coyotes in 2003 as it sought to become an outpost for major league sports in the West Valley suburbs of Phoenix. The city issued $155 million of revenue bonds for the facility that will not reach final maturity until 2033.
Without a team, the arena would lose its major tenant. However, bondholders are protected by the fact that debt is supported by city sales tax revenue rather than arena income.
Three years after agreeing to build the hockey arena, the $455 million University of Phoenix Stadium that hosts the Arizona Cardinals opened nearby, financed with bonds issued by the Arizona Sports Tourism Authority.
While the Cardinals stadium proved successful, hosting the Fiesta Bowl and a Super Bowl, the Coyotes became a money loser, ultimately filing for bankruptcy in 2009.