Ice Edge Holdings has signed a memorandum of understanding on a new lease with the City of Glendale that could pave the way for a purchase of the Phoenix Coyotes, the company CEO says.
City council is to vote on the proposed agreement next Tuesday.
Anthony LeBlanc, Ice Edge's chief executive officer, calls it a first step and says a lot of work remains to secure a final lease agreement.
There was no immediate word whether a second group interested in the team, headed by Chicago sports mogul Jerry Reinsdorf, has reached a similar understanding with the city.
The NHL bought the Coyotes out of bankruptcy last year and is trying to find a buyer that would keep the team in Glendale, Ariz.
Both prospective buyers say there is no way a team can be financially viable in Glendale without a new lease to play at Jobing.com Arena, which the city built for the Coyotes in 2003 at a cost of $180 million US.
The city was to reveal details of the proposed agreement with Ice Edge when it released the council's agenda for its next meeting.
Deadline for local buyerThe NHL has said that if no local buyer is found by the end of June, the league will look to move the franchise out of Arizona.
Grant Woods, a former Arizona attorney general who has represented Ice Edge in talks with the city the last three weeks, said the proposed agreement contains no "out clause" that would allow the franchise to move.
Any lease approved by the city council would face a possible lawsuit from the conservative Goldwater Institute over a provision of the state constitution that prohibits giving away public money, but Woods said he's comfortable the Ice Edge agreement would meet any of the institute's concerns.
On Thursday, Ice Edge reportedly was threatening to pull out of the bidding for the Coyotes, with CEO Daryl Jones quoted as saying he and his group were frustrated with the lack of progress in negotiations with Glendale.
The Coyotes have turned into a surprise Stanley Cup favourite this season but are still struggling to make money.
Ice Edge, which consists of Canadian and American businessmen, and a group headed by Chicago White Sox owner Reinsdorf are both interested in buying the troubled team. But both want changes made to the lease, which is the biggest stumbling block for a potential buyer.
According to reports, Reinsdorf wants an out clause in the lease that would allow him to move the team if it's not financially viable in Phoenix.
Reinsdorf not an NHL fanPresuming the city also reached a deal with the Reinsdorf group, Woods said he expects council will approve both agreements "and the NHL can decide who to sell the team to."
Woods described his clients as "die-hard hockey fans," who would finance the purchase through bank loans, along with their own money. Reinsdorf, by all accounts, is no big fan of the game and is interested in the hockey team strictly as an investment. He owns baseball's White Sox and the NBA's Chicago Bulls.
The NHL says it was on the brink of selling the team to the Reinsdorf group last May when Coyotes owner Jerry Moyes abruptly took the team into bankruptcy, to the league's great surprise.
The Coyotes have lost tens of millions of dollars each of the past several seasons and have never turned a profit since the franchise moved from Winnipeg in 1996. Court documents showed the Coyotes had an operating loss of $54.8 million in 2008.
Moyes planned to sell the team in bankruptcy to Canadian billionaire Jim Balsillie contingent on moving it to Hamilton, Ont.
The NHL vehemently fought the plan and, when no local buyer came through, purchased the team in U.S. Bankruptcy Court for about $140 million. Judge Redfield Baum refused to go along with Balsillie's bid to force the franchise's move despite the opposition of the league.
Moyes, who says he lost about $300 million on his investment with the team, contends hockey can never succeed in the desert.
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