Arizona Coyotes are negotiating a deal with the city of Tempe in which the team will invest “$ 1.7 billion in turning 46 acres of public property from a landfill into a landmark that millions of visitors can enjoy,” according to documents for the project reviewed by Sports.
As part of the plan, the team will purchase the land and finance the construction, while the city will provide a permanent property tax cut and $ 250 million in infrastructure bonds to be paid from a user fee on purchases and sales taxes generated on the site.
The proposed entertainment district, just east of Sky Harbor Airport, about 10 miles from downtown Phoenix, will include a new arena, training base, several hotels and office buildings, an amphitheater with 4,000 seats, garages for 2,400 cars, 300,000 square feet of restaurants. and retail outlets and 3,600 soundproof housing units, all built in two phases.
The arena, training facilities and corporate offices for the team have a budget of $ 700 million and will be part of the first phase. If negotiations continue smoothly, the new arena could open for the 2025-26 NHL season, team president Xavier Gutierrez said in an exclusive interview.
“We have made it clear that we would like to do this as soon as possible,” Gutierrez said. “We would like to decide on a final deal by the autumn and certainly not later than the end of the year.
Negotiations began in earnest earlier this month, when the Tempe City Council closed a one-day meeting, approving a 74-page request for proposals. [RFP] The Coyotes filed under the auspices of Bluebird Development LLP last September. The vote was 5-2 in favor and the agreed deal must be returned to the Council for final approval.
Tempe Mayor Corey Woods agreed on the time frame of the hockey club.
“I really want this to be over by autumn; indeed, by the end of 2022 at the latest, “he told the PHNX Sports website. “The reality is that this is obviously a very big project, a potentially game-changing project for the city of Tempe and, frankly, for the region.
Coyotes owner Alex Meruello, with a net worth of more than $ 2 billion, will finance part of the project directly, and part of it will be borrowed, although this ratio has not yet been determined.
According to RFP, Coyotes wants Tempe to take on $ 250 million in public bonds for infrastructure spending, including land remediation, clearing public rights, sewerage and relocating power lines to prepare the land for development. Municipalities can usually provide lower interest rates than private entrepreneurs.
In RFP and confirmed by Gutierrez, Coyotes offers bonds to be repaid with user fees of up to 6% for each item, food or ticket sold in the arena or entertainment district. And if that’s not enough, they will also seek to reimburse 1.2% of the sales tax that will be generated throughout the complex. The city is expected to earn $ 225.4 million in sales tax over 30 years, according to the document.
“At the moment, this is a landfill where there is no economic activity at the moment,” Gutierrez said. “We just want some of the sales taxes that we will create to be directed to the payments of this public infrastructure. We have pointed out that Tempe’s taxpayers will have no obligations and they will not. “
Finally, the Coyotes want to buy the land for $ 48.4 million and want a property tax relief, “just like any other arena and stadium in Arizona has done. They all have a discount forever, “Gutierrez added.
In return, the Coyotes will commit to at least 30 years in the arena, with a series of 10-year extensions thereafter. At the same time, Coyotes will also apply to the Federal Aviation Administration (FAA) for compliance with altitude restrictions – the arena is designed to be excavated 30 feet below ground level.
Gutierrez said he was “very confident” that the application to the FAA would be approved.
“Obviously there is a lot of work to be done before we can shovel a shovel into the ground,” NHL Commissioner Gary Batman said last week in Denver in the Stanley Cup final. “But of all the reports I receive, everyone is doing what needs to be done as effectively as possible.”
Environmental mediation next year could take up to nine months, Gutierrez said, with construction ready to begin in early 2024.
Meanwhile, the Coyotes are in the process of moving all of their hockey and business operations from Gila River Arena in Glendale across the Scottsdale Valley.
They will play their matches over the next three seasons in a new 5,000-seat hockey building on the campus of Arizona State University in Tempe, which is expected to be ready for Coyote matches when the NHL 2022-23 season begins in October, Gutierrez said. .
They are building a locker room and training facilities at Ice Den in Scottsdale, where the team will train, building an annex to the same at ASU, which will be donated to the school when the Coyotes leave, and upgrading this arena to meet NHL standards.
All of this will cost about $ 30 million as a “temporary solution” to their arena and financial problems before even a new deal with Tempe Arena is finalized, “because [Meruelo] “He’s so committed to staying in Arizona because he wants to spend more than $ 2 billion on a permanent solution,” Gutierrez said.
Playing temporarily in a smaller establishment is not unprecedented, Batman said.
In the NHL, Calgary, Tampa Bay and San Jose played in smaller arenas before permanent facilities were built, he said. Even the Chargers of the National Football League played in a 20,000-seat football stadium after moving to Los Angeles until the SoFi Stadium was built.
“You do what you have to do if you believe in the market in the long run,” Batman said.
He has always believed in the Phoenix market, although the Coyotes have been losing money since moving to Phoenix from Winnipeg in 1996.
Meruel bought the Coyotes in 2019 for $ 300 million and according to SportsAccording to the latest NHL franchise, the team is worth $ 410 million, the lowest of any franchise in the four major professional sports leagues in North America.
Gutierrez said Meruello suffered millions of dollars in losses from the pandemic while playing in an arena where the average ticket price is about $ 40. The ASU Coyotes have a league average of $ 160 and all the top-of-the-line glass seats are already sold out. Seats for the entire season in the front row are $ 14,350, $ 350 per game.
At these prices, Gutierrez said the goal for this season is impeccability or even a little money. After three more seasons, the long-term future of the Coyotes in Arizona can be certain.
“We have set a vision, set out a strategy and are implementing it,” Gutierrez said. “And you have an owner who has the resources and the ability to do it.”