The day after a Stanley Cup; we all have hockey hangovers. I can't think of a better day for the Glendale, Ariz., City Council to quietly vote on an emergency measure that would, quite literally, sell City Hall to pay off its debts on Jobing.com Arena.
The NHL has been trying unsuccessfully to sell the Coyotes for four years—because all the legit buyers want to move the team. The league doesn't want that, and Glendale doesn't want that. So the city agreed to pay the league $25 million a year in 2011 and 2012 to operate the arena, and cover some of the team's debts. Glendale borrowed from itself to pay the NHL, but the well's tapped.
So here's what's on the City Council agenda for today: a measure that would let the council find outside investors to purchase City Hall for $30 million up front, and the city would lease it back from them. The lease-purchase agreement, as the Globe and Mail puts it, "is essentially the same as mortgaging the family home to pay your debts."
The $50-million obligation to the NHL placed such a financial burden on the small city that several official funds were tapped to raise it, including the landfill fund ($21 million), sanitation fund ($4 million) and the water and sewer fund ($15 million).
There are two painful postscripts to this. First, by making it an "emergency measure," the Council is able to bypass a public referendum. Glendale residents won't get a vote on selling freaking City Hall to pay for a hockey team most of them don't want. Second—if the Coyotes do eventually find a buyer, Glendale could be on the hook for $15 million a year to continue subsidizing the arena. Where that money will come from is anyone's guess.
Update: There's a report saying that if the Coyotes are sold, the league could give Glendale more time to pay off its debt and not have to resort to mortgaging City Hall.
