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Matt Hulsizer Guarantees Glendale Bond, Kills Goldwater Case

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GLENDALE AZ - OCTOBER 16:  Matthew Hulsizer (C) CEO of PEAK6 Investments attends the NHL game between the Detroit Red Wings and the Phoenix Coyotes at Jobing.com Arena on October16 2010 in Glendale Arizona.  (Photo by Christian Petersen/Getty Images)
GLENDALE AZ - OCTOBER 16: Matthew Hulsizer (C) CEO of PEAK6 Investments attends the NHL game between the Detroit Red Wings and the Phoenix Coyotes at Jobing.com Arena on October16 2010 in Glendale Arizona. (Photo by Christian Petersen/Getty Images)
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In one fell swoop Matt Hulsizer may have just saved the Phoenix Coyotes and killed the threat of the Goldwater Institute's lawsuit. Hulsizer announced on Fox Sports Arizona's first intermission report that he has changed the deal in significant ways, getting the taxpayers of Glendale pretty much completely off the hook for the payments on default of the bond issue. Hulsizer said that he and the investors would guarantee the bond payments so that the city wouldn't be on the hook. Without knowing the specifics I'd say that what he's trying to say is that if there's a shortfall between the parking revenue and the payment on the bond that they'd make up the difference. Also of note is that Hulsizer said that immediately upon issuing the bond the City would get 25 million back. 

How does this kill the Goldwater deal? Well what the group was arguing was that the projections for what would be earned back on the bond. The lowest estimate of any of the expert reports said between 60-80 million. If the city is basically issuing a bond for 75 million on that parking then that's no longer in anyone's definition of "vastly overpaying" or really overpaying at all. That fits right into the lowest of the three projections that have been made on the parking revenue. In addition Hulsizer reiterated that the ownership would be making payments in addition to those mentioned to pay off the original bond on Jobing.com arena and would pay 40 million for the arena itself at the end of it useful life (26 years from now)

In the second intermission Sen. John McCain and former Arizona Attorney General Grant Woods both came on and said that this deal now satisfies the gift clause as outlined in the Arizona Constitution and that "The Goldwater Institute has done it's job and protected the taxpayers. Now it's time to move on to other projects." While the Institute may not answer to McCain it's certainly a shot to the gut for them as he's the leading politician in the state, is a conservative and has thus far stayed quiet, at least publicly, about the deal. 

At this point the deal is about as neutral as it can be without Hulsizer outright purchasing the team. As to why he's not doing that my opinion is that since the team itself isn't worth what the NHL paid for it out of Bankruptcy court and with the losses the team took on this year Hulsizer doesn't want to basically pay above market value for the team. That's why the bond helps out as even with the guarantee and adding in some more money back to the city it makes up for the gap. When a team like the Sabres is selling for 175 million, 160 or so for the Coyotes seems a little inflated.