The Glendale, Ariz. city council will consider an arena management agreement Tuesday that could keep the Phoenix Coyotes professional hockey team in the city-owned Jobing.com Arena for the next two decades.
The proposal would pay management fees totaling $320 million over 20 years to Greg Jamison, who has been trying to purchase the National Hockey League team for three years.
Interim City Manager Horatio Skeete said at last week’s council briefing session that he could not recommend approval of the management agreement.
“We can’t afford it,” Skeete said.
The city-owned arena, which opened in 2003, was built with proceeds from $180 million of revenue bonds.
The Coyotes have been owned by the NHL since 2009. Jamison said last week he intends to go ahead with the purchase if the lease agreement is approved by the council.
Skeete said the city general fund budget would have to be cut by $20 million if the lease plan is approved. If it is not approved, he said, the budget will need to be trimmed by $12 million.
A $20 million cut would require the elimination of 200 city jobs over five years, Skeet said.
The council agreed in June to a $4 million reduction in original $324 million plan, with lower fees in the first few years. The payment for fiscal 2014 is estimated at $17 million.
Glendale would pay $308 million to Jamison for arena management rather than the original $300 million, but the city’s share of capital improvements funding would be reduced to $12 million from the previous $24 million.
If the deal is approved, city officials said in 20 years Glendale would have a negative $144 million general fund balance. If it is rejected, Skeete said, the negative balance would be $238.5 million.
Voters earlier this month approved a temporary 0.7% sales tax hike to fund the arena management plan.
Glendale’s general obligation bonds are rated Aa3 by Moody’s Investors Service and A-plus by Standard & Poor’s.