The city of Glendale has started to lay out its case for cancelling its $15-million-per-year arena management deal with the Arizona Coyotes.
City officials included details of their case for the first time in an 88-page document filed in Arizona Superior Court on Thursday. The documents were filed in connection with a city request to avoid making a $3.75-million payment due the Coyotes on July 1.
The city doesn't want to make the payment because last week, city council voted 5-2 to end the arena management deal with the Coyotes, a deal the team has said is crucial to its survival in the market. The team says the city must make the payment because it is for arena management services already provided over the last three months.
Without the arena management contract, an NHL source has told TSN the Coyotes will be forced to consider relocation.
Nevertheless, Glendale officials say that in cancelling the contract, they relied on a state statute that aims to prevent self-dealing for public-sector employees.
"Arizona's public policy in preventing self-dealing by government employees is so strong that a city may 'reap the fruits of the contract then void it,'" the city's legal filing says.
State laws say that any time a state official signs a contract, "the person involved may not work for the entity who is receiving the contract during the life of such contract. This will protect the state against a person dealing in a contract for their own personal benefit and then going to work for the company that got the contract."
Coyotes spokesman Rich Nairn did not respond to an email seeking comment.
Since Glendale city council's vote last week, at least two former city employees have come under scrutiny: former city attorney Craig Tindall and onetime assistant city manager Julie Frisoni.
At the heart of the city's legal defence is the claim that Tindall and Frisoni had a conflict of interest. Tindall had been fired by the city as its attorney but was still receiving severance when he started working with the Coyotes and when the arena deal was signed.
A prior investigation by the State Bar of Arizona cleared Tindall of any wrongdoing and the Coyotes say Tindall was given a release from any conflict of interest claims when he went to work for the hockey team.
Frisoni was Glendale's public relations director from 2009 to 2013. In an interview with TSN, she said the city's suggestions that she may have had a conflict are "ludicrous."
"I never had a seat at the table," Frisoni said.
In court documents, Glendale attorneys allege that "Tindall, the city's former city attorney, and Frisoni, the city's former assistant city manager, were significantly involved in "initiating, negotiating, securing, drafting or creating" the arena management agreement on the city's behalf.
While he was city attorney, Tindall was the primary city contact and negotiator for hockey and first met current Coyotes part-owner Anthony LeBlanc sometime in early 2010, if not before, the court documents say.
"It was Tindall's ardent support for the (arena) agreement in the face of opposition... which is believed to have influenced and helped to secure the city council's approval of the agreement in July 2013," the documents say. "Within weeks of helping to secure the agreement's approval, in August 2013 Tindall went to work for (the Coyotes) as their general counsel."
The city alleges Frisoni "was also significantly involved in securing the agreement's approval, including providing information to city council members in support of the agreement just days before the council voted on the agreement."
The court documents also include emails as far back as 2010 that purport to show a relationship between Tindall and his future employers at the Coyotes, while Tindall was still working for the city and when LeBlanc was trying to buy the struggling NHL team.
In an Apr. 13, 2010, email to Tindall that was copied to LeBlanc, Coyotes part-owner Daryl Jones wrote, "Good luck closing the transaction Craig. Even though the last week or so was a bit testy, we enjoyed working with you and getting to know you."
Other emails were included in the court filings that show LeBlanc, Jones and Tindall joking about NFL football and discussing deficiencies in a bid for the Coyotes by Chicago White Sox owner Jerry Reinsdorf.
Glendale lawyers also included emails from March 2011 between Tindall and LeBlanc that details Tindall's efforts to convince LeBlanc to invest in an unnamed medical device company.
In one March 2, 2011, email, LeBlanc wrote he was starting a "small hedge fund based out of Canada (but with a global investment portfolio) and are right now exploring small start ups to invest in. We are very close to a deal with a small tech firm based out of Atlanta, but we want to do a minimum of two investments this year. We would be very interested in taking a look."
Tindall replied: "The money in medical devices is ridiculous. At the very least, it's cool technology and I know you love that."
In a July 26, 2013, email to Glendale city manager Brenda Fischer – while Tindall was still being paid severance by the city but weeks before he was hired by the Coyotes – he appears to give advice about trying to finalize the arena management contract.
"There (are a) few issues outstanding that still have the potential for killing this deal; although they are truly not significant enough to do so," Tindall wrote. "Frankly, neither party needs to waste time (and lots of money on lawyers) arguing about marginal issues."
Tindall wrote that there are "acceptable answers for everything," and encouraged Fischer to "move the lawyers along to close this deal."
Glendale's city council voted July 2, 2013, to approve the arena management agreement.
Days earlier, on June 30, according to court documents, Frisoni emailed four city councillors who would later vote in favour of the contract with bullet points of the deal. Frisoni does not appear to have emailed the other three city councillors who were opposed to the arena deal.
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