Craig Harris

The Republic | azcentral.com

Glendale city manager, ex-mayor blast NHL Commissioner Bettman, Coyotes on arena feud

Glendale officials say team's financial woes caused by putting bad product on ice, numerous losses

Glendale City Manager Kevin Phelps and former Mayor Elaine Scruggs said they have had enough after the Arizona Coyotes and National Hockey League Commissioner Gary Bettman this week badmouthed the city and threatened to move the team if lawmakers don't provide the franchise a new arena.

Phelps, in an interview with The Arizona Republic, and Scruggs, in an open letter to Arizona legislators, said lawmakers should kill an arena funding bill.

They added that the NHL and team are trying to pull a fast one on taxpayers and, by putting a losing team on the ice, the Coyotes have no one but themselves to blame for their financial problems.

The Coyotes are last in the Pacific Division and will not make the playoffs for a fifth straight season. Phelps added that the team only began complaining about playing in Gila River Arena and wanted a new arena in the Valley after Glendale in 2015 stopped subsidizing the franchise through an arena-management deal.

The Coyotes contend they can't be successful in the 13-year-old Glendale arena because it's too far away from the team's fan base, premium ticket holders and corporate sponsors. The team is trying to persuade the Legislature to approve $225 million in public funding for a new $395 million arena in downtown Phoenix or the East Valley. The plan also would give the Coyotes, who have pledged $170 million toward the project, control of any proposed real-estate development and a hotel in a special arena taxing district.

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"We have continually invested heavily to keep NHL in the state of Arizona. We have held up our end of the bargain. They have not held up their end of the bargain. They cannot put a product on the ice for a community that has a lot of options," Phelps said. "They don't believe there is any correlation to the fact that they have not put a team that has been competitive for many, many years."

Scruggs: 'Fast-talking and fuzzy math'

Scruggs, mayor from 1993 to 2013, has said little about the Coyotes since leaving office in 2013. In the two-page letter, she said that she had a front-row seat in bringing the team to Glendale, but that Bettman and team executives have engaged in "fast-talking and fuzzy math." She said the commissioner and team are misleading the Legislature and lawmakers should abort the funding plan.

"In their minds, the Coyotes' lack of success is Glendale's fault. Disregard the fact that the team ranks last in the NHL in hockey spending, continually trades away top talent while it annually 'builds for the future,' and spends next to nothing to market the team," Scruggs wrote. "I will say what they will not: the Coyotes position at the bottom of the standings is a leadership problem, not a location problem."

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Scruggs declined to comment through a spokesman, Steve Roman, who said everything she wanted to say was in the letter.

The Coyotes had no comment on the former mayor's letter.

Phelps: Coyotes have great deal in Glendale

Phelps, meanwhile, said the city also has provided the Coyotes one of the most lucrative arena lease deals in the country.

He said the team pays $500,000 a year in rent in exchange for retaining all ticket, parking, merchandising and concession revenue from hockey games, as well as 80 percent of the arena naming rights, or $1.9 million a year. Phelps added the Coyotes also get to house their corporate headquarters in the arena.

"And we are paying $13 million in arena debt payments, plus annual capital maintenance where we can spend $1 to $2 million a year," Phelps said. "Our frustration is starting to build a little bit."

Phelps said he's disappointed that not only the team, but now the NHL is blaming its problems on Glendale and the West Valley. He also noted Glendale gave the NHL $50 million to keep the franchise in Gila River Arena after the former owner tried to sell the team.

The Coyotes and Bettman have contended that the franchise has continually lost money, even when the team was winning and went to the playoffs from 2010-12.

Phelps said Glendale has "worked hard to educate" lawmakers on the situation, telling them about "our lease and things we have offered to do."

Phelps said the city has pledged to do additional marketing for the team and help sell tickets in the West Valley, but the Coyotes don't "want it to work in Glendale." He also said the city last year offered to have its last $5 million installment of the $50 payment for the NHL go toward arena renovations that could produce more income for the Coyotes. However, he said the NHL refused to let that occur.

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The team's claims that it can't be successful in Glendale came after the city in 2015 stopped subsidizing the Coyotes through a $15-million annual arena-management deal. The new arena managers run the facility for one-third the cost.

"The city of Glendale realized they were being bamboozled for $15 million a year," Phelps said.

The Coyotes were asked Thursday to respond to criticism that the franchise did not put a competitive team on the ice and to the contention that the franchise has one of the best arena lease deals in the NHL.

Instead, the Coyotes issued similar responses to those the team released earlier in the week.

"Over the past 15 years, different ownership groups, including the National Hockey League itself, have worked arm in arm with the NHL office and officials to explore every possible option to make Glendale and its arena work as the Coyotes' home. The bottom line remains the same: the team's owners continue to lose tens of millions of dollars annually. Consistent losses of such magnitude are not sustainable — not for an NHL franchise, nor any other business," the team said.

Calls to Bettman's office were not returned.

Bettman: Team will not remain in Glendale

The arena public-financing plan has stalled in the state Senate because of a lack of support.

Bettman this week sent a letter to Senate President Steve Yarbrough and House Speaker J.D. Mesnard, urging them and other lawmakers to pass the legislation, Senate Bill 1149.

Bettman wrote the team, which is contractually obligated to play one more season in the West Valley, will not remain in Glendale. He stated the arena is not economically capable of supporting a successful NHL franchise.

Scruggs, however, noted Bettman made numerous public statements since 2002 that the NHL and the Coyotes could be successful in Glendale.

"The truth is that the Coyotes have a world-class, taxpayer-funded arena that is designed for hockey," Scruggs wrote.

Reach the reporter at craig.harris@arizonarepublic.com or 602-444-8478.