Ice Edge Holdings is one step closer to taking ownership of the troubled Phoenix Coyotes franchise.
The group has exclusive rights, with some conditions, to negotiate a lease agreement for the Phoenix Coyotes with the city of Glendale under a memorandum of understanding to be presented to the city council next week.
The memorandum agreed to by Ice Edge and city officials is a significant step toward purchase of the Coyotes from the NHL. It was presented to the council in a close-door session on Friday, then the item was posted on the agenda for the council's regularly scheduled meeting next Tuesday.
"Much is left to be done," Ice Edge CEO Anthony LeBlanc told ESPN.com Friday night.
"An MOU [memorandum of understanding] is simply a framework document. We now need to work quickly with the City of Glendale to attempt to finalize a [lease agreement] that will therefore allow Ice Edge to finalize this transaction with the NHL over the summer," LeBlanc said.
Ice Edge, a group of mostly Canadian investors, would have exclusive negotiating rights for 60 days unless another potential buyer gives $25 million to the city to cover its obligations to the NHL. Ice Edge also has to present a term sheet to the city from a lender proving it has the financial backing to buy the team.
The only other potential buyer has been a group headed by Chicago sports mogul Jerry Reinsdorf and there was no indication it was willing to make that commitment.
The NHL bought the team out of bankruptcy last September with the intention of selling it to someone who would keep it in Glendale, where the team has lost tens of millions of dollars in recent seasons.
Purchase of the team is contingent on a new lease agreement with Glendale for the Coyotes to play at Jobing.com Arena.
Earlier this spring, the city council voted to approve only the lease proposal put forward by Reinsdorf. But last month city officials quietly approached Ice Edge about returning to the table after the Reinsdorf deal started to go sideways.
Sources told ESPN.com the main differences in the new proposal approved Friday is that the city will provide an additional $25 million in a loss reserve account -- from $50 million to $75 million.
The Ice Edge Group also has negotiated a break fee if the city can't conclude the deal.
Although there have been repeated questions surrounding the group's financial wherewithal, sources told ESPN.com funding is not an issue.
A third party could take exclusivity away from Ice Edge if they agreed to assume $25 million the city pledged to potential owners for 2010-11 in case of losses, a source told ESPN.com Friday.
The NHL will decide who will buy the team but if Ice Edge can work out a new lease within 60 days, it would be the only potential purchaser with the necessary lease agreement. The league has said it would look to move the troubled franchise if no buyer could be found to keep the team in Arizona.
NHL officials could not be reached for comment Friday night but commissioner Gary Bettman confirmed at the start of the Stanley Cup finals that a group from Winnipeg led by Canadian billionaire David Thomson has made an official bid to assume ownership of the team and move it to Winnipeg if the ownership situation in Phoenix cannot be worked out.
The Coyotes never have turned a profit since the franchise moved from Winnipeg in 1996. The team had played before sparse crowds until this season, when the Coyotes set franchise records for wins. The team played before sellout crowds at season's end before falling to Detroit in seven games in the first round of the playoffs.
The agreement notes that it is important to complete the sale as soon as possible.
"It is the intention of both parties," the memorandum reads, "to proceed with negotiations of the necessary agreements without delay with the desire to have agreements completed for approval within 60 days."
Scott Burnside covers the NHL for ESPN.com. The Associated Press contributed to this report.