Watchdog Group To Sue Glendale

Goldwater Institute will make good on its threat to sue the City of Glendale, Ariz., if it completes its deal to sell the NHL’s Phoenix Coyotes to Chicago businessman Matthew Hulsizer under its current terms.

The watchdog group maintains that the city’s deal with Hulsizer, co-founder and CEO of PEAK6 Investments, will illegally subsidize a private business and put taxpayers at risk even though it will keep the team in Glendale through 2041. The group is examining more than 1,000 pages of documents provided by the city under a court order.

City officials plan to sell bonds to pay Hulsizer $100 million, and in return, get the rights to charge for parking during events at Arena to pay off the bond debt. Glendale would also pay the businessman $97 million over the next five years to manage the venue.

Hulsizer would buy the Coyotes from the NHL, which purchased the team in U.S. bankruptcy court two years ago.

However, the Goldwater Institute charges that the deal as is violates the state’s constitution, which bans Arizona governments from subsidizing any individual, association or corporation, and has pressed the city to restructure the deal so Hulsizer or another buyer carries more of the risk.

NHL Deputy Commissioner Bill Daly said that Goldwater’s lawsuit threat doesn’t change anything.

“We are still pursuing a sale of the bonds,” Daly said. “Hopefully, the announcement will not negatively affect that.”