Tempe City Council votes to move forward with negotiations on Coyotes Arena development proposal

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The Tempe City Council voted Thursday night to move forward in negotiations with the Arizona Coyotes on an arena development deal that would make Tempe the team’s long-term home.

After an exhaustive session that lasted more than eight hours and included presentations from project stakeholders as well as those who objected and a lengthy public comment round, the vote to move forward in negotiations passed 5-2 . The affirmative vote does not guarantee approval of the Coyotes’ development plan, but it does signal the Board’s willingness to continue discussions on the proposal – an important step forward for the team as it seeks to put down roots for the future.

During the meeting, several details about the project were released, including a pledge from team owner Alex Meruelo to pay $40 million in non-refundable money to begin remediation of the pitch, a pledge of $2 million to the Tempe Affordable Housing Fund and a provision that would provide Tempe with brand name and value as part of the deal. Meruelo has also pledged to provide $2.1 billion in real estate as collateral for the bonds.

During the question and answer session, the Coyotes also pledged that the financial situation would be open and that the City of Tempe would have direct access to the Coyotes’ financial institutions and those that provided loans to the organization. According to the Coyotes, the club provided that access to ASU, which hired a third-party company to analyze the team’s financial strength. Team president Xavier Gutierrez, in addressing the organization’s long-term vision, also said the property is looking at “other teams to own” in the area.

Earlier, Gutierrez briefed the council on aspects of the development, which is expected to include a 16,000-capacity arena, a 200-room hotel, retail stores, restaurants and 1,680 residential units. Shane Doan, the organization’s most beloved player who is now a team executive, and forward Clayton Keller voiced their support for the project, as did team broadcaster Lyndsey Fry, a local Olympian who is an integral part of the growing youth hockey community in the zone.

Additionally, Gary Bettman, who attended the meeting remotely via Zoom, endorsed the development proposal and said the Coyotes would sign a 30-year no-relocation document, according to PHNX Sports.

Nick Woods, a land use attorney speaking on behalf of the Coyotes, made the strongest case for the project, sharply rebuking Phoenix Sky Harbor International Airport’s objections to the project and accusing its representatives and surrogates. of “bullying” the council, threatening them with legal action over the existing intergovernmental agreement between Phoenix and Tempe and obscuring their true intentions to oppose the project.

City of Phoenix Aviation Services Director Chad Makovsky clarified that Sky Harbor and Phoenix do not oppose the team’s quest for a new arena, but rather oppose its plans for residential units. due to issues with flight paths and noise pollution. Makovsky asked the council to remove residential elements from the plan, hold the developer accountable for its promises of mitigation efforts to avoid construction risks, and honor the existing intergovernmental agreement between Phoenix and Tempe regarding residential units. and noise corridors.

The majority of speakers during the in-person public comment section supported the arena’s development plan, praising its potential positive economic impact, its cultural significance to Tempe, and the impact of the Coyotes in the greater Phoenix community, including including the organization’s philanthropic, diversity and inclusion efforts. Those who urged the board to vote against the issue cited potential implications for Phoenix Sky Harbor International Airport and Federal Aviation Administration concerns, potential costs to ratepayers, traffic congestion and gambling issues. Several speakers also referred to mistrust over Meruelo’s business reputation and expressed frustration at any potential tax relief he would receive as local residents struggle to find affordable housing.

228 written comments were also read during the meeting, reflecting a wide range of opinions.

As the Coyotes work to build a long-term home, the team will play at least the next three seasons at Arizona State’s new 5,000-seat all-purpose arena, a deal that has been approved by the Board of Regents of Arizona in February. As part of the deal, the Coyotes will build an annex that will provide NHL-caliber facilities to meet NHL and NCAA compliance standards. The team will also be responsible for paying all construction and rental costs in advance.

Last month, Athleticism reported that as part of the licensing agreement with ASU, the team could be forced to find another venue to play if the Coyotes or Meruelo violate what constitutes a “good conduct” clause.

The clause states that if the Coyotes or Meruelo are the subject of negative publicity, contempt, scandal or ridicule for violating “widely held principles of public morality, failing to conduct one’s business with a high degree of integrity and honesty and/or failing to act as a good corporate citizen,” ASU can walk away from its agreement with the Coyotes.

Under the agreement, negative publicity includes media coverage of Meruelo’s and the Coyotes’ business practices that, if true, have harmed or could harm ASU’s reputation. The Coyotes have since emailed Athleticism that ASU requires such clauses for “all of their agreements”.

The Coyotes played their final game at Gila River Arena on April 29, ending an acrimonious relationship between the team and the city of Glendale that has soured over the past year.

In August 2021, the City of Glendale notified the Coyotes that it would be opting out of its joint lease agreement for Gila River Arena, essentially forcing the team out of the building following the completion of the 2021–22 season. The move came after months of unsuccessful negotiations between the City and the team regarding a possible lease extension and renovations to the arena and multiple notices issued by the City to the club regarding unpaid and overdue balances owed in the under his rental contract.

In December 2021, Athleticism reported that the city threatened to lock the Coyotes out of the arena due to overdue tax bills totaling more than $1.3 million and unpaid arena fees. The Coyotes said the unpaid bills were the result of “human error” and later settled those debts with the Arizona Department of Revenue to remove their outstanding tax lien.

Council member Lauren Kuby expressed serious concerns about entering into a partnership with Meruelo, referring to some of these previously reported incidents. Kuby presented, via a chart displayed at the meeting, an assessment of the commercial viability of Meruelo’s portfolio, conducted by Dun & Bradstreet Finance Analytics, which showed a high delinquency score, moderate to high risk of default, high overall risk rating and a credit recommendation. of a maximum of only $5,000 for the Coyotes organization. Kuby said she was also concerned about potential litigation arising from any breaches of the IGA and stressed the need for forensic economic analysis.

“The main issue is the developer experience,” Kuby said. “It’s history.”

Tempe Vice Mayor Randy Keating said he appreciates the level of work the Coyotes have done to resolve some of the council’s issues with the project, but cautioned that a yes vote would not guarantee the deal is done. finally approved.

“I’m not going to sit here and say I’m going to support the proposal because I don’t have enough information yet. I will say that I like what I saw. But the… process is important,” Keating said. “And I’m very happy that we’re able to start that process tonight.”

(Photo: Kevin Abele/Icon Sportswire via Getty Images)

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