Paul Giblin

The Republic | azcentral.com

Glendale announces intent to ink deal with AEG Facilities to manage Gila River Arena

Arizona Coyotes' future in the West Valley city remains uncertain

Glendale selected facilities-management company AEG Facilities to operate Gila River Arena, which could hasten the city's split with the Arizona Coyotes hockey team.

The city issued a formal notice of intent to reach a contract with AEG Facilities on Wednesday. The next steps for city administrators:

Work out a contract with the company's executives to present to the City Council for approval.

Determine whether there's a way to retain the Coyotes at the building that was built for the NHL team.

Coyotes President and CEO Anthony LeBlanc issued a statement Wednesday congratulating AEG Facilities. An affiliated company, AEG Sports, owns and operates the Los Angeles Kings hockey team.

"We have a strong relationship with AEG and we are very excited to work with them. AEG has a proven track record of managing successful venues," LeBlanc said.

However, the statement did not reverse LeBlanc's repeated public statements during the past several months that the Coyotes' tenure in Glendale is nearing an end.

Poll: Arizona Coyotes should stay at Gila River Arena in Glendale

Speaking on the "Doug & Wolf Show" on KMVP-FM (98.7) on Jan. 27, he said, "The future of the Coyotes is incredibly strong in Arizona, but when it comes to Glendale, it's fair to say that we're looking for probably a short-term arrangement and I'll leave it at that."

The Coyotes currently hold the contract to manage the arena. The team had the option to submit a proposal to the city to continue to manage it, but the team did not. AEG and two other global management companies submitted proposals.

Glendale City Manager Kevin Phelps, who has held the job since Feb. 1, said he hasn't given up on keeping the Coyotes.

AEG executives and city officials plan to meet with team owners in the coming weeks in an attempt to secure a long-term lease agreement that would keep the Coyotes in the West Valley.

"We still think the story is far from written," Phelps told The Arizona Republic.

The question is: What story is being written?

Options for Coyotes

Last week when Arizona Sports host Doug Franz pressed LeBlanc about the team's possible long-term options, LeBlanc responded that the team needs to partner with a willing community or institution.

Coyotes executives have had "immensely positive" discussions with Phoenix, Tempe and Arizona State University officials about the possibility of a new arena, he said.

"I don't want to put too much positive thoughts out there, but I can say discussions have turned relatively serious in the last couple of weeks, and I'm very positive that we'll have something out in the community, if not in the next month or two, certainly by the end of the regular season," LeBlanc said.

The season ends April 9.

ASU spokesman Mark Johnson said there are no developments concerning a joint ASU-Coyotes hockey arena.

He noted a previous statement issued by the university that said: "We are exploring arena options and are encouraged that there are a number of good ones to pursue. We have been studying some of the options, but we aren't yet in a position to discuss specifics."

Tempe spokeswoman Nikki Ripley said she had no information on the topic.

Phoenix officials could not be reached Wednesday.

AEG's operations

AEG puts Glendale in the best position to retain the Coyotes, bolster business at the adjacent Westgate Entertainment District and attract top events to the arena, Phelps said.

The Los Angeles-based company and its affiliated companies own, operate or consult with more than 120 venues worldwide, including the Staples Center, which is the home arena for the Kings, Los Angeles Lakers and Los Angeles Clippers.

AEG also developed L.A. Live, a bustling sports and entertainment district adjacent to the Staples Center. The company's entertainment division ranks as the world's second-largest concert-promotion company.

"We really felt that they could actually drive the number of event days at the arena best of all the three," Phelps said.

Glendale did not release AEG's proposal, or the proposals of the other bidders: Spectra by Comcast Spectacor, which formerly was known as Global Spectrum and is based in Philadelphia; and SMG, which is based in West Conshohocken, Pa., in suburban Philadelphia.

Phelps said he expects city administrators to finalize a contract with AEG within 60 days. The agreement would require council approval.

Conflict with Coyotes

The Coyotes' decision to sit out the bidding process widened a fracture between the team and the City Council.

Last year, Glendale voided a 15-year arena-management deal with the Coyotes, claiming conflicts of interest by former City Attorney Craig Tindall and former Assistant City Manager Julie Frisoni, who both went on to work for the Coyotes.

The deal had paid the Coyotes $15 million a year and required the team to make partial reimbursements to the city based on revenue generated at the arena. The reimbursements failed to meet projections.

After the council ripped up the deal, the sides stitched together a new two-year management agreement in July. The city has the option, and is taking the necessary steps, to put AEG in control this July.

Phelps said he is aware of LeBlanc's public statements about vacating Gila River Arena, but he hopes to reach a long-term deal nonetheless.

"I can't change yesterday. I can't change the relationship and the difficulty that the parties have had in the past, but I know that certainly our team here in Glendale is committed to finding a way to get his franchise to be successful," Phelps said.

"If we can accomplish those goals, if he can meet his operational financial goals, I don't think there is a reason for him to move somewhere else. But it can't be the city writing the check out. That's an artificial way to make him successful," he said.

A future with or without the team

AEG executives are prepared to manage Gila River Arena with or without an NHL franchise, Phelps said.

He expects the city will have to subsidize the arena in the short term, but anticipates the amount will be less than the $6.5 million the city is paying to keep the venue operational.

AEG has experience at Glendale's arena. The company booked concerts and other events at the venue from 2006 through 2009, when Valley trucking mogul Jerry Moyes owned the Coyotes.

“It is an honor to once again be affiliated with Gila River Arena,” AEG CEO Chuck Steedman said in a statement released by Glendale. “We look forward to working with the city of Glendale, the Arizona Coyotes and the numerous community stakeholders and partners affiliated with this important arena.”

The arena near Loop 101 and Glendale Avenue has hosted numerous A-list performers since opening in 2003. The acts include U2, the Rolling Stones, Paul McCartney, Justin Timberlake, the Eagles, Katy Perry, Bruce Springsteen and Taylor Swift, among others.