The Glendale City Council has approved a preliminary budget that includes $17 million to be paid to the prospective buyer of the NHL's Phoenix Coyotes for operating costs for the city's Jobing.com Arena.
The 4-3 vote on Tuesday night was the first in a series of moves necessary before the council approves a new lease for the arena.
The council has two more preliminary budget hearings before taking a final budget vote. No date has been set for the council to consider the new lease, but it is expected to do so in the next few weeks.
The NHL has reached a tentative deal to sell the team to Greg Jamison, former CEO of the San Jose Sharks, contingent on a new lease agreement with Glendale.
Darcy Olsen, president of the Goldwater Institute, issued this statement after the vote:
"Although the council approved an arena management fee in the budget Tuesday, nothing requires the council to spend all or any part of it. The city could sign an arena management contract for less than that amount or for no amount at all if the city decides to manage the arena itself or put it out for competitive bidding.
"That said, we do believe this arena management fee is legally questionable if it is far greater than the value of the services to be provided. Additionally, Glendale taxpayers may choose to pursue future action to contest the fee by referendum.
"The Goldwater Institute cannot authoritatively comment on the legality of the deal until we and Glendale taxpayers can see the details. However, we are encouraged by reports that this deal will not include a massive up-front payment to help the buyer purchase the team, and we hope that the city will reach a deal that comports with the law and protects the interests of Glendale taxpayers."
Copyright 2012 CBS 5 (Meredith Corporation). All rights reserved. The Associated Press contributed to this report.