GLENDALE, Ariz. – Against a backdrop of 100-degree temperatures, workers last month began implementing the latest changes for a hockey team once just a lone councilman’s vote from winding up in Seattle.
They spent a sweat-filled Saturday tearing down the outdoor facade at the Jobing.com Arena to replace it with the name of the venue’s new Native American tribal rights-holder. Four days later, the Glendale City Council approved renaming it Gila River Arena, home to the Arizona Coyotes, in a vote far less acrimonious than their past meetings involving the NHL club.
In fact, the Arizona Attorney General’s Office is investigating events leading up to the council’s contentious vote 15 months ago approving a new arena lease agreement by a 4-3 margin and keeping the then-Phoenix Coyotes from relocating to Seattle.
Three sources with knowledge of negotiations confirm the Coyotes would have been bought by New York investment banker Ray Bartoszek and his partner Anthony Lanza and moved to Seattle as soon as the following day — playing up to three seasons at KeyArena — had the vote not passed.
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“Most people don’t realize how close we were to actually getting an NHL team,’’ says former Seattle mayor Mike McGinn, who had been involved in the relocation talks.
The Arizona AG is probing whether the four councilors whose votes kept the Coyotes in Arizona violated the state’s Open Meetings Law by meeting secretly to discuss the lease beforehand with the lawyer for IceArizona, the team’s eventual owner.
Adding to the controversy is that one of those city councilors, Samuel Chavira, had campaigned the previous summer against further subsidies for the Coyotes before casting what became the critical vote in favor of the lease. Then, a year after the Coyotes deal passed, the team’s most supportive city councilor, Gary Sherwood, wound up casting a swing vote in a 4-3 approval of a casino project he’d previously campaigned against but that Chavira had long favored.
Any findings in the AG investigation about a possible violation of the Open Meetings Law will ultimately come too late for Seattle, still in gridlock over a new Sodo arena project that has stalled NHL expansion hopes.
But the emerging truth is tough to ignore: A one-vote decision is the only reason Seattle isn’t already gearing up for a second NHL season beginning this week.
McGinn says his office downplayed the situation last year to avoid igniting NHL hopes so soon after a Chris Hansen-Steve Ballmer group had been foiled in relocating the NBA’s Sacramento Kings.
“There wasn’t any of the same energy from the media around the NHL team,’’ McGinn says. “But in many respects, the NHL team was closer. ‘’
While the NBA opposed the Kings relocation, the NHL was on board with a Coyotes move if the Glendale vote failed. The league needed its 2013-14 schedule finalized and was serious about a firm deadline and no further negotiations.
“I understood that if Glendale didn’t proceed, that we could get an NHL team,’’ McGinn says.
That view is supported by an internal memo from the NHL Players Association dated June 27, 2013 — five days before the Glendale vote.
The memo, obtained by Forbes, told players unless the lease was approved, the NHL “would immediately pursue one of several backup alternatives which likely would entail a prompt relocation of the franchise. While there are several potential cities … it appears that Seattle is the most likely.”
Two sources with first-hand knowledge have confirmed New York investor Bartoszek had moving trucks on standby to relocate the team to Seattle. They say a Seattle financing specialist had helped Bartoszek line up local investors to own a small piece of the franchise.
While no new arena was forthcoming, they say Bartoszek secured guarantees from the NHL to protect him if none emerged after three seasons. Though nobody could confirm specifics, a possibility is that the NHL would have let Bartoszek move the club again, or bought the team back from him.
Bartoszek liked the Sodo location pitched by Hansen.
In an interview at his Connecticut office in April, he said he was glued to his laptop the night of the Glendale vote, hoping things would swing his way. Bartoszek — no longer partnered with Lanza on hockey — declined to comment for this story other than saying he still hopes to bring an expansion team to Seattle and doesn’t want his past NHL negotiations becoming public.
KeyArena was holding dates for the 2013-14 season in case the Coyotes moved.
McGinn says his executive branch “had the authority to accommodate them at KeyArena without having to get approval from the city council.
“And we were prepared to do so,’’ he says. “They (the team owners) would have made investments in the facility to improve it for hockey … with the understanding there may or may not be a Sodo Arena. But they would be staying at KeyArena (knowing) the plans for Sodo Arena were in place and that Chris (Hansen) would be looking to get an NBA team. ‘’
But it became moot once the four Glendale city councilors helped pass the lease by a single vote.
Chavira did not return phone requests for an interview on his vote supporting the Coyotes’ lease deal.
Sherwood met with The Seattle Times at his council office last month and defended his vote on the casino project favored by Chavira by saying he came to realize the deal would happen eventually and was the best the city could get.
“I changed my mind after further exploration of the facts,’’ he says.
But Glendale voters last month submitted two petitions — each with more than 15,000 signatures — trying to nullify the casino vote. A recall petition has also been circulated to have Sherwood removed from office.
The AG investigation into Open Meetings Law violations centers on an email Sherwood sent to fellow city councilor Manny Martinez four days before the Coyotes vote. In the email, released in July via the Public Records Act, Sherwood tells Martinez he and another councilor, Yvonne Knaack, met the previous night with the lawyer for future Coyotes owner IceArizona.
It says they discussed with the attorney confidential items from the council’s latest private executive session, used to formulate the city’s lease negotiation stance. The email goes on to say that “Sammy (Chavira) is already on board as he was with us last night’’ and concludes with:
“Manny — please delete this email after you’ve read it.”
The Open Meetings Law prohibits a majority of any elected body — in this case, four or more of Glendale’s council members — from meeting on any voting issue ahead of time unless in a public session. Arizona law also states that details of city executive session discussions must be kept confidential.
Glendale Mayor Jerry Weiers, who voted against the Coyotes deal, held a late-July news conference announcing he’d asked the state’s AG to investigate.
“That meeting is wrong on so many levels,’’ Weiers said. “It’s like playing poker and showing your opponents all your cards.”
Sherwood accuses Weiers and other political opponents of overblowing things. He says he and Knaack only spoke to IceArizona’s lawyer by phone from a car they were in and that Chavira and Martinez weren’t with them to form a majority of council members.
Also, he adds that the lawyer was a friend he’d worked with previously and was only assisting during the frantic run-up to the council vote and NHL deadline.
Glendale and IceArizona had just days to reach a deal and Sherwood says the city took longer than expected to publicly post details of its internally-discussed negotiating stance. So, he says he shared some details, hoping to avoid delays.
“I was telling him things that were supposed to be posted,’’ he says.
AG assistant Christopher Munns is heading the investigation, but declined to comment until his probe is complete. If found in violation, the four councilors could face sanctions and the lease could be nullified and council forced to vote on it all over again.
In the end, most agree a new vote — though a headache — would pass and the Coyotes will remain in Arizona at least four more years until an opt-out clause to move the team could be triggered if losses surpass $50 million.
Sherwood says he doesn’t regret fighting to keep the team despite a tough first year for the lease, which sees Glendale paying IceArizona $15 million annually to manage the city-owned arena. The Coyotes hit attendance targets, but the city recouped only $5.8 million in parking and concert revenue — about $1 million less than budgeted.
The city also will receive $600,000 more annually as its cut from the team’s new naming-rights deal with the Gila River tribe.
A New York Post report Thursday said the Coyotes will declare a $24 million loss for last season, but that Philadelphia hedge fund manager Andrew Barroway will soon provide a needed cash infusion by buying 51 percent of the team. IceArizona would retain 49 percent after paying just $170 million for the club last year and now seeing it valued at $305 million after a rise in franchise values across all sports.
In Seattle, the NHL wait continues. Los Angeles real estate magnate Victor Coleman appears to have the edge over Bartoszek as Sodo arena builder Hansen’s and the league’s first choice for a Seattle expansion team.
But Hansen is waiting for city officials to complete an environmental impact study delayed until next year. Also, unless Hansen lands an NBA team, he’d have to modify a Memorandum of Understanding with the city and county for just an NHL arena tenant.
Former mayor McGinn wonders whether arena approval would be hastened if the Coyotes were already here. But they aren’t, and NHL deputy commissioner Bill Daly recently summarized the situation thusly: “Obviously, the arena uncertainty in Seattle creates obstacles to going forward with the expansion prospect there at this time.”
And until that arena is approved, that 4-3 Glendale vote will continue to haunt.
Geoff Baker: 206-464-8286 or email@example.com