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Joyce Clark Unfiltered

For "the rest of the story"

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

This week the publicity about the Coyotes has been nothing but awful. Slapshot number 1 was the media blitz earlier this week about Andrew Barroway. Barroway was the majority owner of the Coyotes until he sold most of his interest in the team to Alex Meruelo in 2019. Barroway, to this day, remains a minority owner. He was arrested March 23,2023, on domestic violence charges in Colorado after allegedly assaulting his wife. As a result, the National Hockey League has suspended Barroway.

Slapshot number 2 is the Phoenix Business Journal article posted today announcing that Sky Harbor is suing Tempe over the proposed Arizona Coyotes arena project. As was stated in the article, Phoenix has no problem with the commercial aspect of the project – arena, shops, etc. Their objection is to the 2,000 proposed high-rise apartments which they claim is a breach of the 1994 Agreement between Phoenix and Tempe.

The Coyotes’ response ignores the basis of the suit which is the construction of the 2,000 apartments and instead uses smoke and mirrors to focus on Phoenix’s sports/entertainment venues saying if Phoenix can build them close to Sky Harbor, then they should be allowed to build their entertainment venue close to Sky Harbor.  “While it is OK for Phoenix to build a baseball stadium, a basketball arena, and a soccer stadium in the flight path of Sky Harbor Airport, somehow, it’s wrong when Tempe attempts to convert an old polluting landfill into a new sports and entertainment district.”

They deliberately missed the point and are trying to divert attention away from their planned 2,000 apartments. So, it will go to court. It’s doubtful the issue will be decided before the Tempe election on the issue.

However, the intended result of the suit has already occurred by muddying the waters even further for Tempe voters. I suspect many voters will decide why bother with this whole Coyote mess and hopefully, vote ‘no’.

It will also have the effect of further extending the timeline for the proposed construction of the development, should it pass in the Tempe election. Remember, to a developer, time is money.

I also ran into a small, news snippet online stating that a group of NHL owners were unhappy with the Coyotes shenanigans perhaps leading to some new marching orders for Gary Bettman, CEO of the Hockey League. This was before news of Barroway or the Phoenix suit. I wouldn’t be surprised if they decided that they’ve had a belly full of the Coyotes. Bettman has always protected the Coyotes but how much longer will he be able to do so?

Would a third slapshot spell a death knell for the Coyotes? Stick around and watch. Just when you think it can’t get any worse for the Coyotes, it does.

© Joyce Clark, 2023     

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

Even with the disclaimer above, I want to emphasize that this blog reflects my personal opinion as a resident of Glendale. It in no way reflects the public position of the Glendale City Council (of which I am a member) or any official position of the City of Glendale.

All the information cited in this blog is publicly available information acquired through various public internet search engines. No proprietary or private information is used.

This blog is directed specifically to the voters of Tempe. On May 16, 2023, Tempe will hold a Special Election consisting of three ballot propositions. These propositions, if approved by voters, will allow the Tempe City Council to finalize a development agreement with Bluebird Development, the entity created by the National Hockey League’s Coyotes and its majority owner, Alex Meruelo. If defeated by voters, Tempe City Council will reject the deal.

I would hope that Tempe voters defeat all 3 propositions.

It is a complicated issue, and there is much to consider. Hence the decision to divide the information into two blogs. Part I will focus on Mr. Meruelo’s and the Coyotes’ finances. Part II will tackle elements of the deal.

Meruelo holds business interests in banking, real estate, media, restaurants, food, casinos, and professional sports. He is the owner of Meruelo Group, as well as Meruelo Media, which owns five radio stations and two television stations in Los Angeles—KWHY-TV and KBEH-TV and radio stations KLOS, KLLI, KPWR, KDAY and KDEY-FM.

In addition, he is the owner of Fuji Food, two casinos, the Grand Sierra Resort in Reno, Nevada and the Sahara Las Vegas in Las Vegas.

The Meruelo Group has, among other entities, a construction and real estate development firm and has ownership of Neal Electric Corp, Select Electric Inc., and Doty Bros within the Southern California area.

The group also owns the Commercial Bank of California (CBA), which Meruelo co-founded in 2003. It was reported by PRWEB in November of 2022, that the National Merchants Association released an update about its ongoing lawsuit against CBA, a California chartered bank owned by the Meruelo Group, in the Superior Court of California, LA County, case number 21STCV44674 and JAMS Reference No. 1210038694.

In December 2021, NMA filed a seven-count suit against the Commercial Bank of California for various alleged violations, including, inter alia, breach of written agreement, breach of covenant of good faith and fair dealing, unjust enrichment and unfair business practices, among other issues.

NMA is suing for $280M. The trial is scheduled to take place in February 2023. The alleged unethical and unfair business practices include:

  • Taking NMA’s proprietary processes and information
  • Freezing assets for months at a time, resulting in vendors and partners not receiving payments
  • Misinformation about merchant risk reserves

In June 2017, the Meruelo Group purchased the SLS Las Vegas (formerly the Sahara Hotel and Casino) in Las Vegas. In May 2019, SLS brand owner SBE Hotel Licensing, LLC filed a lawsuit alleging that Meruelo’s Las Vegas Resort Holdings, LLC had failed to pay at least $450,000 in licensing fees since November 2018.

Meruelo owns the following private properties valued collectively at approximately $33 million:

  • A 8,500-square-foot, $7.05 million house at 36 Indian Creek Drive in Miami
  • A $10.79 million penthouse in The Langham, New York.
  • Colom Island in Spain for 3.2 million euros
  • A 22,000-square-foot, $12.1 million house in Paradise Valley, AZ.

The observation for every Tempe voter should be, why is this guy demanding that Tempe pay anything to help him develop the property?

One of Tempe’s councilmembers publicly shared the Dun & Bradstreet Financial Analytics of these Meruelo related entities. This information should have been a warning shot to the Tempe City Council:

How are the Coyotes doing under Meruelo’s leadership? The team looks like it’s a financial disaster. The Coyotes are running pretax cash losses of about $50 million a year. The team also has some $300 million of debt—$200 million from Frank McCourt’s MGG Investment Group at an annual interest rate of somewhere around 9% or 10% and another $100 million of NHL credit-facility debt.

According to Forbes, for yet another year, the Arizona Coyotes are considered the least valuable team in the National Hockey League. It listed the Coyotes as No. 32 at a $450 million valuation as of December 2022. It cites that Meruelo paid $300 million for the team in 2019. The valuation breakdown, according to Forbes is:

Currently the team is playing in ASU’s 4,600 seat Mullet Arena. The tickets are pricey. I have heard from others that as many as 2,000 tickets have been “comp’d” for games. Even in that case, it is said that not all the comp’d ticket holders show up.

The team seems to be bleeding money while it promises to pay Tempe for a lot of things to pursue their development becoming reality including footing up to a $250,000 bill to cover the cost of the May Special Election. They seem to be desperate and realize this is their last opportunity to remain a viable entity in Arizona.

Keep in mind that just last year the team owed $1.3 million in taxes to the State of Arizona including $250,000 to Glendale. That’s in addition to the previous year when the team owed Glendale at least $500,000 in back rental payments.

The team has promised that nothing like this will ever happen again…until the next time it does. Tempe City Council are you listening yet?

As Laurie Roberts said in one of her past Arizona Republic op-ed columns, “A business forgets to pay $1.3 million in taxes, dating to June 2020, due to an ‘unfortunate human error’? Anybody buying that?” It seems the Tempe City Council really, really wants to buy it and appears to be using this Special Election as cover.

Not to be forgotten are vendor and contractor complaints made over the years. Meruelo’s habit and pattern appears to be to stall paying them or disputing bills by threatening to go to court. Most of these entities are small and cannot afford the expense or time to fight in court. So, they end up settling for pennies on the dollar to at least salvage some payment from the job.

What can be learned about Meruelo and the team? Dun & Bradstreet considers all Meruelo associated entities as a moderate to high risk. The lowest amount of borrowing capacity resides with the Ice Hockey Arizona (the Coyotes) in an amount of $5,000; the highest amount of borrowing capacity is with Meruelo Enterprises at an amount of $1.4 million. That’s a far cry from the $2.1 billion plus needed to develop this project.

Team officials have assured Tempe that Meruelo has the real estate and financial bonafides to make this deal happen. But the only way it works is if Tempe will give a portion of city sales and bed taxes generated at the site to pay $230 million plus of the cost. This is from a guy who assured the public that he could generate the investor financing to cover the entire cost of this development.

© Joyce Clark, 2023  

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

Today a friend sent me a link to an Arizona Republic Opinion column published on September 9th and written by State Representative Athena Salman. Representative Salman represents State Legislative District 26 which encompasses north Tempe and includes the area of the proposed Coyotes’ arena. Here is the link: https://www.azcentral.com/story/opinion/op-ed/2022/09/09/arizona-coyotes-entertainment-district-raw-deal-tempe/8017122001/ . The title of the opinion column is, Arizona Coyotes gave Glendale a raw deal. And Tempe wants to repeat it?

In her column Representative Salman reiterates much of what I have already said about the proposed Coyotes deal. Here are some excerpts from her opinion piece:

  • “What they don’t share so openly is that they’re also requesting either a 30-year and an 8-year government property lease excise tax (GPLET), to the tune of more than $649 million in tax abatements, or a 65-year and an 8-year GPLET that would total over $1.1 billion in tax abatements.”

What this means to the Tempe taxpayers is that the Coyotes are seeking a handout valued at $649M to $1.1B in tax forgiveness. In other words, this represents a loss of money earned for Tempe taxpayers that could be used for all kinds of projects and programs for citizens. This belies their repeated mantra that they are financing the project totally.

Representative Salman goes on to say,

  • “And then there’s the Coyotes’ dishonorable fiscal track record under current owner Alex Meruelo, who took over the franchise in July 2019.”
  • “Is this really the kind of corporate behavior the city of Tempe wants to be rewarding for the next 30 to 65 years?”

This is a fair question.

Another issue Representative Salman did not mention is the intensity and height of construction, especially the apartment buildings and their effect on Sky Harbor’s operations. There is a 1994 agreement between Tempe and Phoenix designed to ensure both cities mutually protect the integrity of Sky Harbor. Phoenix has publicly stated that the Coyotes’ proposed project is in violation of the 1994 agreement which could result in court action.

I agree with Representative Salman’s take on the proposed Coyotes deal. She is merely saying what many others have said. There’s the adage, those that do not study history are doomed to repeat it. I suspect the Coyotes deal appears to be irresistible to some on Tempe’s city council. Are there enough councilmembers to approve the deal? I have no idea, but I hope they take the time to learn valuable lessons from Glendale’s experience.

There are a few avid fans who regularly feel compelled to berate me because I dare to write about the Coyotes. I guess it’s easy for them to forget that I was involved with the Coyotes in Glendale from the very beginning. I was at one time, heavily invested in the team and fought hard to keep them in Glendale through some very trying and turbulent years. After some time, it gets old when there are musical chairs regarding ownership, each successive owner with his own agenda that often did not coincide with that of Glendale. Why shouldn’t I blog about them?

I ‘ve earned the right to do so.

© Joyce Clark, 2022      

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

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