Arizona Coyotes arena deal terminated by Glendale City Council

The Arizona Coyotes’ lease agreement for Gila River Arena was terminated on Wednesday night by the Glendale City Council.

The Arizona Coyotes’ lease agreement for Gila River Arena was terminated on Wednesday night by the Glendale City Council.

The decision came at a special meeting called by the City of Glendale after reports that the City Council’s desire to end the NHL franchise's deal stems from the belief that the team’s ownership group, IceArizona, breached the terms of the lease agreement by using money from the city to pay down debt incurred when the group purchased the team in 2013.

Coyotes co-owner, president and CEO Anthony LeBlanc issued a statement on Wednesday night after the lease was terminated.

“We are disappointed with the city’s decision to violate its obligations under the agreement that was entered into and duly approved only two years ago,” LeBlanc said. “We will exhaust any and all legal remedies against the city of Glendale for this blatant violation of its contractual obligations to us.”

• MUIR: Arena lease dispute may force Coyotes to relocate

As part of the current lease deal, which has a 15-year, $225 million commitment, Glendale pays $15 million in management fees to IceArizona.

SI.com’s Allan Muir wrote earlier on Wednesday that the relationship between the city and the Coyotes had soured to the point where termination of the lease agreement was not met with widespread surprise.

Shortfalls in revenue sharing with the Coyotes cost the city $8.1 million last fiscal year, and Glendale expects to lose up to $8.7 million on the arena this fiscal year. Under even the sunniest estimates, those losses will continue to pile up over the duration of this agreement.

That’s a staggering financial burden for a population of less than a quarter-million to bear. And it appears some members of the Glendale council feel as though terminating the agreement is their only way out from under it.

In a statement on Wednesday morning announcing the special meeting, Glendale said, “The city is open to a resolution but it must be one that provides certainty and fairness to both parties, especially the taxpayers. The council has agreed to stand for transparency and the highest standards of ethics for any future agreement with the Coyotes.”

The NHL later issued a statement of its own.

“We have been advised by the Coyotes that the City of Glendale’s contentions are without merit and we fully expect the Coyotes to continue to play at the Gila River Arena and for the City to continue to honor its obligations to the Coyotes. After everything that has transpired, it is extremely disappointing that the City of Glendale would do anything that might damage the Club.”

• Coyotes owner says team intent on staying in Arizona

The Coyotes moved into the arena, previously known as Glendale Arena and Jobing.com Arena, in 2003. In 2009, the team filed for bankruptcy following its move to Phoenix from Winnipeg, Manitoba. The NHL took control of the franchise and operated it for four years until IceArizona, led by LeBlanc and George Gosbee, purchased it.

- Mike Fiammetta