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Goldwater Institute ready to nuke Glendale?

Manitoba Conservative leader Hugh McFadyen (right) campaigns with former Winnipeg Jets player Thomas Steen at the MTS Centre in Winnipeg. Monday, May 7, 2007. The provincial election campaign has turned its attention to hockey with the Conservatives promising to bring the NHL back to Winnipeg.

Wayne Glowacki

Perhaps "fun" is the wrong word.

At an ideologically driven outfit like the Goldwater Institute, they probably don't see it that way. They probably believe they are doing God's work, or at least old Senator Barry's, battling against the evils of big government and wasted tax dollars.

But this Glendale hockey deal? Maybe it's not "fun" fighting it, but it's at least the subsidy-busters' equivalent of a batting-practice fastball.

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Consider the story posted on the front page of the institute's website, but first, a bit of background.

Right now, Goldwater lawyers are considering court action to try to stop the municipal bond issue through which Glendale, Ariz., is trying to turn over $116-million (all currency U.S.) to potential Phoenix Coyotes owner Matthew Hulsizer, along with giving him a $97-million contract to run the arena.

Goldwater suspects that the deal may violate the "gift clause" in Arizona's state constitution, which reads: "Neither the state, nor any county, city, town, municipality, or other subdivision of the state shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association or corporation."

It is not difficult to see why Goldwater might believe that.

But the truth is, Goldwater may not even need to sue to make its point. Simply by declining to say that it won't - and refusing to put a timetable on any final decision - it has made the bond issue an extraordinarily risky proposition. And if the city of Glendale is forced to up the interest rate to make it look more attractive to investors, the numbers only get worse, reinforcing the argument that the gift clause is being violated.

In the meantime, the institute decided to post the cautionary tale of Thomas Hocking, a consultant whose company was retained by Glendale to produce an economic study that was used to bolster the city's case. (To oversimplify: Parking revenue from the area around the arena would be enough to cover the city's investment and underwrite the bond issue.) Hocking's company was hired by Glendale after another consultant delivered parking revenue projections that fell short of the revenue required. (Some members of the Glendale city council, it should be noted, later claimed they were never told about that first report before voting in favour of the bond issue.)

You won't find the name of Hocking's company on the bond issue documents themselves, now. Another consulting outfit has taken his place.

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Perhaps that's because Hocking is accused in a lawsuit of defrauding investors in an arena construction project in Prescott Valley, Ariz., funded by - no, really - a $35-million municipal bond issue. Shockingly, the arena failed to deliver the projected revenue, leading to the bonds being devalued to junk status.

Now if a similar scenario were to play out in Glendale, well, let's just say that the smoking crater would be considerably deeper.

The Goldwater Institute offers this information after having struggled mightily to force the city leaders in Glendale to come clean and produce documentation, including a court order that the city complied with only this past week, two years after it was issued.

So no wonder Goldwater might be moved to add just a little bit of insult to injury by disseminating the Hocking story to a wider public. Purely in the interests of a greater cause, of course.

Meanwhile, you may have noticed that some of the National Hockey League's trusted mouthpieces suddenly feel free to say the word "Winnipeg" out loud. Wonder why?

Check out this last line from an op-ed piece in Thursday's Arizona Republic by the Goldwater Institute's president and CEO, Darcy Olsen.

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"We hope the city will do the right thing and avoid a lengthy and protracted lawsuit by coming into compliance with the law," Olsen writes. Protracted, as in the other NHL owners having to foot the bills for the Coyotes' losses for another season or two while litigation makes its way through the courts.

That sure sounds like a statement of intent/declaration of war. Not quite "here come the Jets," but we're getting there.

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About the Author
Sports columnist

Hamilton-born Stephen Brunt started at The Globe as an arts intern in 1982, after attending journalism school at the University of Western Ontario. He then worked in news, covering the 1984 election, and began to write for the sports section in 1985. His 1988 series on negligence and corruption in boxing won him the Michener award for public service journalism. More

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