Friday, July 13, 2012

Coyotes Clear Remaining Legal Issues; Sale to Jamison Group Could Be Soon

Quite a bit happened on Thursday surrounding the potential Coyotes sale and it seems that the three year long saga could soon be coming to a close.

There were a pair of reports by Lisa Halverstadt of the Arizona Republic. The first was that the City of Glendale rejected the petitions submitted by a political action committee called Save Glendale Now on July 5 to have a proposed sales tax increase placed on the November ballot. The second was that Ken Jones and Joe Cobb made good on their promise to submit their petitions on behalf of the taxpayers to have the City of Glendale’s lease and arena management deal with the Jamison group placed on the November ballot, but that the city of Glendale would be rejecting their submission. Finally, there was a report by Mike Sunnucks of the Phoenix Business Journal that the Jamison group has enough financing to complete the purchase of the Coyotes.

These three reports all work together to suggest that a sale of the Coyotes to the Jamison group could be imminent.

Sales Tax Increase

As discussed a few days ago on Puck and Gavel, it had been suggested that the sales tax increase was required in order for Glendale to fund the lease and arena management deal with the Jamison group.  Glendale’s rejection of the petition, keeping it off the ballot, would seem to eliminate that hurdle, providing there is no litigation over their rejection, or if that litigation is resolved in Glendale’s favor.  Glendale cited three reasons to reject the petitions

The first was that Save Glendale Now, the political action committee submitting the petitions, forgot to include its organization number on the petitions, as required by statute.  The second reason was that the description listed on the petition was inaccurate and misleading in that it misstated the purpose and effect of the ordinance it purported to challenge. The third reason was that the petitions were not submitted in a timely fashion because they were not submitted within four months of the next city election, which is scheduled on August 28, 2012.

I imagine Save Glendale Now will challenge all three of these bases in Court.  They would likely challenge the first basis of denial as a harmless error.  They would likely challenge the second basis of denial as a dispute over whether the language of the petition accurately describes the ordinance it purports to challenge.  Finally, they would likely challenge the third affirmative defense in that an acceptance of the Glendale’s interpretation of timing would allow Glendale to simply sidestep the people’s right to petition by just timing their ordinances so that they are within four months of an election.

Of these challenges, I feel that the first and third have a likelihood of success, but that the second challenge will be difficult. I am very persuaded by the reasoning listed in the letter issued by Pam Hanna on behalf of Glendale rejecting the petitions submitted by Save Glendale Now.  Therefore, I believe that there will not be a public referendum on the increase of sales tax.  That clears a major hurdle for the deal between Glendale and the Jamison group to keep the Coyotes in Arizona.

Jones and Cobb Petition

As discussed during his interview on Puck and Gavel, Joe Cobb stated that he and Ken Jones intended to obtain sufficient signatures to have petitions submitted to Glendale to have their ordinance to enter into a 20 year lease and arena management agreement with the Jamison group placed on the November ballot. As reported today by Lisa Halverstadt of The Arizona Republic, the final number of signatures submitted was only 1,568Glendale has already said that it would reject the petition because it is late and because it did not have sufficient signatures.

These issues were addressed in Joe Cobb’s interview and in my post regarding Shane Doan’s future.  To briefly summarize, by statute, petitions are required within 30 days of the passing of the ordinance by the City Council.  The ordinance was passed on June 9, and as such, the petitions would be required by July 9.[1] The number of signatures required would be 10% of the prior election, which Glendale has said would be 1,862 signatures, based upon an election in 2008.

Mr. Cobb debated both the date the submission was due and the number of signatures required.  He stated that since the petition documentation was not made available to him until June 15, his deadline should actually be 30 days from that date.  Second, he cited an election held in 2010, which had only 11,309 voters, 10% of which is 1,131.  Therefore, Cobb believed he only needed 1,131 signatures, which would have to be submitted by July 16.[2]  I believe that Glendale’s rejection of the petitions on these grounds will be challenged in court.  The Arizona Republic report cites Phoenix-based election law attorney Andy Gordon, who believes that such a challenge would likely be unsuccessful and that he thinks “they’re pretty clearly out of time.”

It seems like Cobb and Jones’ efforts have failed.

Jamison Group Has Financing

Mike Sunnucks of the Phoenix Business Journal has reported today that a source close to the Jamison group states that Jamison’s group has the money to purchase the team.  He further reports that city officials and the NHL believe they can withstand a legal challenge, presumably from the Goldwater Institute, based on the Arizona State Gift Clause.[3]  

The report states that there is no timetable for the sale.  However, with the main challengers to the sale apparently vanquished, and with Jamison having the financing available to purchase the team, it seems that there really is nothing standing in the way of this deal being completed within the very near future.  At the very least, this should be enough for Shane Doan to feel confident by his July 16 deadline to not field offers from other teams and to begin working on a deal to  resign with the Coyotes.

For how long the Coyotes ownership saga has lasted, it seems like it is about to come to a quick and conclusive end.  Apologies to those in cities hoping to have the Coyotes relocated to their city ::cough:: QUEBEC! ::cough::, but it seems that the Coyotes are destined to remain in Phoenix for the foreseeable future.  Let the speculation about the Devils’ impending bankruptcy and the Islanders’ expiring arena lease in 2015 begin!

What do you think about all of this news?  What do you think of the likelihood of success of any legal challenges to Glendale’s rejection of the two petitions?  Are you happy with the Coyotes staying in Phoenix?

[1] 30 days from June 8 is actually July 8, but since July 8 was a Sunday, the deadline tolled until July 9.
[2] 30 days from June 15 is actually July 15, but since July 15 is a Sunday, the deadline according to Cobb will be tolled until July 16.
[3] This is the final hurdle that I discuss in my post regarding Shane Doan’s future with the Coyotes. Furthermore, it is the basis of Cobb’s belief that the agreement should be invalidated, as he explained in his interview with Puck and Gavel.