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Joyce Clark Unfiltered

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May 23

17

Tempe citizens win and Coyotes lose

Posted by Joyce Clark on May 17, 2023
Posted in Arizona Coyotes • City of Glendale • City of Phoenix • City of Tempe • Phoenix Metro issues  | Tagged With: , , , , , , , , | No Comments yet, please leave one

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.

Last night I checked the Maricopa County elections page to find out the results of the Tempe election. There were 3 propositions, all of which if passed, would have given the Tempe City Council and the Coyotes the green light to build a new hockey arena.

I am pleased to report that all three propositions were rejected by a margin of about 56% NO to 44% YES. I helped in a very small way by writing several blogs about Glendale’s experience with the Coyotes and even wrote an opposition statement in Tempe’s publicity pamphlet.

The Coyotes officially conceded last night, and Coyotes CEO Xavier Gutierrez issued the following statement after the vote results were released:

“We are very disappointed Tempe voters did not approve Propositions 301, 302, and 303. As Tempe Mayor Corey Woods said, it was the best sports deal in Arizona history. The Coyotes wish to thank everyone who supported our efforts and voted yes. So many community leaders stepped up and became our advocates and for that we are truly grateful. We also wish to thank the countless volunteers who worked so hard to try and make the Tempe Entertainment District a reality and the Tempe City Council for their support as well. While we wanted a different outcome, we remain grateful to all those who volunteered their time and talent. What is next for the franchise will be evaluated by our owners and the National Hockey League over the coming weeks.”

NHL commissioner Gary Bettman also issued a statement on @ArizonaCoyotes arena vote failing:

“The NHL is terribly disappointed by the results of the public referenda regarding the Coyotes’ arena project in Tempe. We are going to review with the Coyotes what the options might be going forward.”

I suppose they can try to find another location in Arizona. Who knows that may happen. Commissioner Bettman is absolutely glued to the Arizona market and will try his damnest to remain in Arizona. Alex Muerelo has a betting franchise in Arizona that could be worth more than the team. That also gives him a strong motive to stay here. It will be interesting to see how the next chapter unfolds.

In the meantime, here are just a few reactions from the fan base:

  • “My fellow #yotes fans, one day we will looks back and say, ‘Thank God it didn’t work out in Tempe.’ @ArizonaCoyotes there’s still so much love for you in the desert 🌵 We will rise my friends. This is the dark before the dawn. 🏜️”

 

  • “Completely gutted. What a devastating loss for our community. @ArizonaCoyotes you always had a fan in me. Through thick and the thinnest of thin. Really heartbroken. ♥️”

 

  • From reporter Brahm Resnick: “DEFEAT’S NOT AN ORPHAN Tempe voters’ resounding rejection of @ArizonaCoyotes proposal also a repudiation of mayor & council that backed project along w 4 former mayors who got behind it.”

 

  • “Sorry Gary but your Arizona Coyotes project was and continues to be a failure. It’s time to move the team.”

 

I’m glad the Tempe saga is over. My concern was that Tempe was about to be caught up in the drama of a financial maelstrom just as Glendale had been. When ordinary people, like me, are struggling to pay bills and are worrying about another recession it wasn’t the right time to ask for any kind of financial breaks for yet another sports team.

Tempe voters…you made the right decision. Congratulations.

© 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

Apr 23

17

Alex Meruelo’s Folly

Posted by Joyce Clark on April 17, 2023
Posted in Arizona Coyotes • City Council Actions • City of Glendale • City of Tempe • Glendale elected officials • Phoenix Metro issues  | Tagged With: , , , , , , , , , , , | No Comments yet, please leave one

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.

Tomorrow, Tuesday, April 18, 2023, the City of Tempe will send out mail-in ballots seeking the voters’ decision regarding the Tempe/Coyotes election. Voters will have the opportunity to approve or deny three propositions, 301, 302 and 303, needed to move the Coyotes proposed development forward.

An economic impact analysis of the Tempe/Coyotes proposed deal was released today, April 17, 2023, by Dr. Dave Wells. Dr. Wells is the Research Director of the Grand Canyon Institute and has a doctorate in political economy and public policy. He has no axe to grind for or against the proposed deal. He looked at the facts presented in the City of Tempe’s and the Coyotes’ economic analyses and ran the numbers. Here is the link to his analysis: GCI_Policy_Economic_Analysis_Tempe_Entertainment_District_Apr_17_2023

What was the Coyotes’ initial response? How about the Coyotes’ attorney Nick Wood calling the critique “silly.” How’s that for an intelligent, well-reasoned response?

There are major takeaways from Dr. Wells’ study. However, one not mentioned was the pace and character of the proposed development. What will be built first? Yep, the arena and the concert venue because these are the two money makers for the Coyotes. They also happen to be the two facilities that benefit from the Tempe giveaway of tax breaks.

Let me share a lesson that the Tempe City Council would do well to heed. I can remember the presentation made at a Glendale city council workshop by Mr. Ellman and staff on expected revenues from its proposed arena and surrounding development. To this day, I remember the graphics showing buckets of revenue dollars flowing into the city’s General Fund to pay the cost of the bonds needed to be issued for construction of the arena. The whole deal was predicated on Ellman’s promise to deliver an estimated two million square feet of retail and commercial development. What did he actually deliver? One tenth of the promised development and then he filed for bankruptcy. Tempe City Councilmembers, heed this lesson. You are dealing with a developer that Dun & Bradstreet, a major financial rating institution, found to be a risk.

The major conclusions of the study are startling. Perhaps the most important finding is, just as in Glendale, the proposed development isn’t going to produce enough revenue for the city to pay back the city’s financial investment. The study’s estimate is that Tempe will only get back about a third of the revenue it invests in the project. The study reveals that for every $2.70 in new taxes, Tempe will earn just $1.00 in new revenue.

Some final thoughts. Just as the last recession (2007-09) caused Mr. Ellman to abandon Westgate and the arena, today’s economy is difficult for all, including people having to dip into their savings just to pay ordinary bills. These very same voters, ordinary people struggling financially, can look to Glendale to realize that this is not a good deal for them.

For years, Gary Bettman, President of the National Hockey League, has pledged to keep the Coyotes in Arizona but he is bucking headwinds these days. Rumors abound that the league’s hockey team owners are fed up with the continual drama of the Coyotes. At some point, if they haven’t done so already, they will pressure Bettman to clean up the Coyotes’ mess once and for all. I suspect Bettman is still a pragmatist and knows when “to fold ‘em.” Maybe it’s time for Bettman to take a serious look at Tilman Fertitta and the Toyota Center.

Beware of the hype coming from Coyotes’ fans. They are an avid group whose only mission in life is to make sure the Coyotes remain in Arizona. Keep in mind that although a percentage of them live in Tempe and can vote, most come from the surrounding communities of Scottsdale, East Phoenix, Chandler, Gilbert, etc. They will not bear the financial burden imposed on Tempe taxpayers.

I hope Tempe voters look to the lessons of Glendale and learn from it. This is not a development that is in their best interests. I hope they vote ‘no’ on Propositions 301, 302 and 303. Tempe can do better and has a proven track record of benefiting their citizens. This time they missed the mark.

© 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.

Mar 23

29

Slapshots

Posted by Joyce Clark on March 29, 2023
Posted in Arizona Coyotes • City of Phoenix • City of Tempe • Phoenix Metro issues  | Tagged With: , , , , , , | No Comments yet, please leave one

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.

Feb 23

9

Don’t Puck with Tempe, Part II

Posted by Joyce Clark on February 9, 2023
Posted in Arizona Coyotes • City of Glendale • City of Tempe • Phoenix Metro issues  | Tagged With: , , , , , , , , | 1 Comment

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.

In Part I of this blog, we looked at the finances of Alex Meruelo, majority owner of the Coyotes, and the Coyotes organization. Dun & Bradstreet rates all Meruelo- associated enterprises as moderate-to-high credit risks.

Are there risks for Tempe taxpayers based on the terms of the Tempe development agreement with Bluebird Development (Coyotes’ development entity)? Yes, there are. The deal relies upon providing Meruelo $700 million plus in tax breaks, in both sales & bed taxes and property taxes. For your reference, here’s is the link to the 175-page development agreement: Bluebird Tempe DDA 11162

The first part of the deal relies upon Tempe’s creation of a Community Facilities District (CFD) and the reallocation to the CFD of earned sales and bed taxes.  The CFD can issue bonds up to a maximum allowable amount of $247,134,726.00 million, which reimburses Meruelo for the cost of the land, remediation of the land, and the necessary infrastructure (which developers almost always pay for). These bonds are paid off by taking 0.9% of every dollar of city sales tax; 3.75% of every dollar of city hotel sales tax; and a 6% surcharge on every sale within the CFD (such as tickets, clothing, food and drink) and using the taxes to pay off the CFD bonds. It also creates a taxing district that can be charged an additional assessment if there are not enough taxes brought in – a heightened concern in the early phases of the project.

Within the agreement regarding the CFD, it states, “Developer has agreed…which costs for site remediation and development of certain other public benefits will be financed from the proceeds of the bonds issues by a community facilities district and certain other sources of the city…” This acknowledges that the city may use city funds other than those generated by the imposition of the sales and bed taxes explained above. Question: What other city resources could be on the chopping block to repay these bonds, if and when, these sales tax impositions do not raise the requisite bond repayments? Does the city tell you, the voter, what could be used? The first alarm bell should be going off.

Consider this fact when weighing whether the project has the capacity to generate enough sales and bed tax to pay back the CFD bonds. The project’s raw acreage is 46.26 acres. By the time all infrastructure is built, the useable acreage should be about 37 acres. Make no mistake, this development project can be called a mini-Westgate. But it will never be as large or as profitable as Westgate area which today encompasses nearly 3 square miles. Hear that sound? It’s another alarm bell.

Yet within the agreement, the developer states, “…that it believes it has available to it the financial resources…” Note the word “believes.” It does not state definitively that it has the financial resources but rather it believes it does. How is Tempe to be assured that the private development group is well capitalized? The city failed to hire a forensic economist to examine their financial resources but instead enlisted Beacon Sports, a marketing group that brings financial institutions, teams, and cities together but cannot go beyond the self-reported finances provided by the private developer Meruelo. Yet another alarm bell– this one screeching — should be going off about now.

The other major financial gift to Meruelo is the use of a GPLET (Government Property Lease Exercise Tax). This mechanism allows Meruelo to avoid paying property taxes by leasing each building, when completed, to the city. Cities do not pay property taxes. It amounts to tax avoidance for about 30 years of property taxes on the arena, practice facility and the music venue as well as 8 years of property taxes on the 2 hotels, approximately 316,000 square feet of retail, up to 1,995 of luxury apartment units, and office space. That’s approximately $494 million of property tax avoided (and that’s the Meruelo groups estimate). If Mr. Meruelo paid the property taxes, about $99 million ( or 20%) would go to Tempe’s General Fund. The other 80% (or about $395 million) would go to Tempe’s schools and community colleges in Tempe and the County. A great deal for Meruelo but not so great for schools.

There are two other issues not to be ignored. The first is transportation. Although fans complained about the time it took to travel from the East Valley to the West Valley, keep in mind the arena was directly and immediately off the freeway. This proposed site is several miles from the freeway I-10 but close to the 202 freeway and the exit to the airport..  The time East Valley fans complained about will now be replicated with the traffic jam in and around this site. Tempe recognizes there’s a problem and has required the Coyotes to help mitigate expected congestion at the airport entrance and to pay Valley Metro to try to ease the problem. We’ll see how well that works for Priest Drive, Rio Salado and surrounding neighborhoods, already plagued with traffic woes.

The other issue is the Coyotes’ history of charitable giving and civic involvement. In Glendale, it was crickets. There was no involvement. Have you noted the rash of the Coyotes’ very recent involvement in the Tempe community? I suspect it’s all for show. I assume they want you, the voter, to expect this same level of civic involvement once the deal is done. I suspect you shouldn’t hold your breath. Their current civic engagement is for selling purposes. Once Tempe has bought this deal, it will no longer be an imperative for them.

One issue that merits comment is why hold a Special Election? It seems quite simple. Don’t believe the hype that voters should decide this issue. It’s more basic than that. The Tempe City Council is seeking cover. They are your elected representatives. They are charged with representing your best interests and making the difficult decisions. They have more insider knowledge about this deal than you will ever hear about. The reason to put it to a public vote is, if and when, the deal goes south, your Council will not take the blame for it because it asked you, the public to decide and therefore, their hands are clean.

There is an organization that can provide you with further information about the Coyotes (Bluebird)/Tempe Development deal and that is Tempe1st.  Remember by voting “NO” on Propositions 301, 302 and 303 starting on April 19th (Early Ballots available) and through to the May Special Election on May 16th, you’ll will be telling the Tempe City Council that they can do better. I urge you to visit https://tempe1st.com. Get the facts from them. They have the resources to read the 175-page development agreement and to let you know what issues are problematical.

There is an adage, “A leopard cannot change its spots.” I suspect Meruelo can’t change his spots either. His organization’s propensity to stall on payments, to claim to forget or to claim human error, is not suddenly going to go away. Many observers of this new Coyotes saga believe he’s just looking for a new arena for his unethical practices and culture of dishonesty.

Are Tempe voters and its City Council who have not bothered to learn from history, especially that of Glendale, doomed to repeat it?

© 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.

Feb 23

7

Don’t Puck with Tempe, part I

Posted by Joyce Clark on February 7, 2023
Posted in Arizona Coyotes • City of Tempe  | Tagged With: , , , , , | No Comments yet, please leave one

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.

Nov 22

1

It’s Halloween and here’s a Coyotes arena update

Posted by Joyce Clark on November 1, 2022
Posted in Arizona Coyotes • City Council Actions • City issue and actions • City of Glendale • Phoenix Metro issues  | Tagged With: , , , , , | No Comments yet, please leave one

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.

For those rabid fans who become offended every time I post a blog on the Coyotes…sit on it.

The Coyotes played 15 seasons in Glendale and like it or not, Glendale (and I) are now part of their history.

Recently it was reported that the Tempe city council may very well approve the deal and then establish a referendum vote of its citizens to approve or deny the council decision. What does this mean? It appears the city council will approve the deal but it needs ‘cover’ for its approval. By having a referendum of the people on this issue, it offers the council an ‘out’ if its residents do not approve the deal.

There will be plenty of support from the business community who, bless their greedy hearts, are already hearing the cha-ching of their cash registers. Count on them to pour money into a slick campaign to convince voters that this proposed deal is the second coming.

What makes this possible referendum vote so interesting is that there are approximately 101,822 registered voters in Tempe out of a total population of 184,361 residents. In the last election, 21,338 registered voters voted. That’s about 20% or 1/5 of the total number of registered voters. I wonder how many of those 20,000+ of those likely voters are avid Coyotes fans willing to throw taxpayer dollars at yet another sports franchise? The purported 5,000 fans attending games at the Mullett Arena? Obviously, not all the attendees reside in Tempe. An interesting question is how many Tempe residents attended?

If there is a referendum vote it will come down to two issues:

  • MONEY

Make no mistake, this is all about money and who stands to gain and who stands to lose. Obviously, the Coyotes hope to make a ton of money utilizing public funding. It’s going to cost somewhere in the neighborhood of $70 million just to clean up the old landfill site. Muerelo will invest $40 million to clean up the site but where does the other $30 million come from? The City of Tempe will have to issue $30 million in bonds. That’s $30 million that could be used for parks, public safety, etc. Of the anticipated $430 million generated in new sales taxes, Muerelo would keep half (approximately $215 million) as reimbursement for cleaning up the site.

The Coyotes also want a 30-year property tax exemption on the arena, practice facility and theater. In addition, they want an 8-year property tax exemption on the hotels, office, retail and residential.

Arizona House of Representatives Athena Salman, representing Tempe, said these requests total $649 million (over half a billion dollars) in tax abatements for the Coyotes. While Moms see grocery bills skyrocketing and everyone sees gas at the pump hovering around $4.50 a gallon.

  • FLIGHT PATHS

There is concern on the part of Sky Harbor Airport about the proposed apartment complexes at the site. Recently the airport sent fliers to residents in Phoenix, Tempe and Scottsdale advising them that the airport may have to change its current flight paths. This move could end up shifting routes over currently unaffected neighborhoods. The noise from the aircraft will be nothing compared to the noise generated by affected residents.

To placate citizens Tempe is hosting a series of meetings. The first was hosted by, wait for it, the Coyotes, on October 15th at 11 a.m. I wonder how many residents took time off from work to attend this one. The next three meetings are hosted by Tempe at its Development Review Board meeting on November 15th, and two city council meetings on November 22nd and 29th. Residents’ time to speak is usually limited to 3 to 5 minutes. Not quite a fair fight.

It comes down to two basic questions for Tempe voters. Are Tempe residents willing to subsidize a sports franchise for $649 million dollars? Are residents willing to live with altered Sky Harbor flight paths that could destroy their quality of life?

If a referendum vote occurs, I guess we’ll find out.

As a side note, I heard from several people who attended the first several Coyotes games at the Mullett Arena. All said there were empty seats. One person revealed that actual ticket sales were around 3,000 out of a total of 5,000. Over 1,000 tickets were ‘comp-ed’. That would explain why there were empty seats. It’s one thing to plunk down $100 (or more) for a seat. You would make sure your money wasn’t wasted and would attend. Not so with free tickets. You may or may not, attend.

Make no mistake. Despite their hype, it appears that the Coyotes are losing money. I guess they can afford to do so if their pot of gold becomes a reality in Tempe. What if the deal falls through? Someone told me, they have a back-up plan. Oh, really?

© 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.

Sep 22

9

Another commentary on the Coyotes saga

Posted by Joyce Clark on September 9, 2022
Posted in Arizona Coyotes • City Council Actions • City of Glendale • Gila River Arena • Glendale elected officials  | Tagged With: , , , , , , | No Comments yet, please leave one

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.

Jun 22

4

Coyotes’ fans…don’t count those chickens just yet

Posted by Joyce Clark on June 4, 2022
Posted in Arizona Coyotes • City Council Actions • City of Glendale • Gila River Arena  | Tagged With: , , , , , , | No Comments yet, please leave one

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.

I would remind Coyotes fans that in 2010 and 2011 the City of Glendale paid the NHL $25 million a year to keep the Coyotes in Arizona. I guess no one remembers that if Glendale had not paid the NHL the team would have been sold and probably relocated at that time.

During that time fans heaped praise on Glendale and there was no lamenting of traffic difficulties in getting to a game in Glendale. My, how times have changed. The most often heard refrain today has been that it is too difficult to get to Glendale. That seems to be the owners and fans rationale for moving out of Glendale.

The fans have traded $25 dollar tickets and traffic inconvenience for $500 tickets and equally vexing traffic inconvenience. They will trade traffic at the Loop 101 for traffic at the Loop 202.

There are three major issues that it is believed will have to be satisfied if the Coyotes hope to locate in Tempe.

The first is the Coyotes’ proposal that Tempe pay $200 million to clean up the site. They propose a Tempe Community Facilities District. In essence, Tempe bonds for the $200 million which would be repaid by using the sales tax generated on the site for approximately 20 years or until the bonds are paid. In essence, Tempe taxpayers see no new revenue from this development until the bonds are paid and are not benefitting from the sales tax generated by the proposed project.

I would also historically point out that Steve Ellman when seeking City of Glendale financing to build the Gila River Arena represented development of over 1.2 million square feet that would generate enough sales tax to satisfy the annual debt payment. After 5 years there was only about 1/5th of the proposed economic development and that did not generate enough sales tax to pay the annual debt payment. The same scenario could be repeated forcing Tempe to use General Fund dollars to cover the short fall in the annual debt payment.

There has been talk that if the Tempe Council approves the development there will be citizen referendum petitions. If that occurs and enough signatures are acquired, it will put the project on the ballot and the voters of Tempe would decide whether the project moves forward. If this were to occur, add another year of uncertainty.

A second issue is the Coyotes’ proposal to construct 1,600 residential apartment units on the site. These residential units would be directly under Sky Harbor’s flight path. Recently four former Phoenix mayors offered an OpEd on this issue. Here is the link: https://www.azcentral.com/story/opinion/op-ed/2022/06/01/tempe-plan-arizona-coyotes-spells-trouble-sky-harbor-airport/9996700002/ . A little background is in order. In 1994, Phoenix and Tempe entered into an Intergovernmental Agreement (IGA). The purpose of the IGA was to stop residential development under Sky Harbor’s flight path. The concern was and is, that these new residents would complain about the noise generated by takeoffs and landings (at roughly one every minute). Residential complaints would most certainly have an impact on Sky Harbor’s continued and future development.

The four former mayors said, “For more than 25 years, Sky Harbor’s growth, expansion and development plans have been made with the IGA and adherence to its prescribed eastbound departure path in mind.

Tempe even appointed its own aviation commission to ensure that the terms of the agreement remain viable and enforced. All of this to protect Tempe neighborhoods from the life-altering experience of having a flight path directly over their homes.” They go on to say, “These residential units are proposed to be built directly under the very flight paths that were created by the intergovernmental agreement to protect Tempe residents.

As previously communicated by the Federal Aviation Administration, the Air Line Pilots Association, the airlines themselves and by the professional management of Sky Harbor, no residential development can be permitted in this area – less than 10,000 feet from the end of the two south runways – without compromising those flight paths and significantly threatening the airport’s continued operation and future growth.

As community leaders who embrace cooperation and compatible growth, it is essential, if the entertainment district proposal moves forward, that all residential development be removed from consideration.”

When you think about it, it won’t just be the 1,600 residences that will be impacted by the noise but really, everything on the site will experience the noise…people working in offices on the site and the fans while attending a game. Without the residential units, projected to earn income, is it still a viable investment?

The last and perhaps the most important issue to be considered is money. At the Tempe City Council’s June 2, 2022, meeting when approval was granted 5 to 2 to continue to negotiate with the Coyotes, one of the Tempe councilmembers publicly offered a slide depicting Dun & Bradstreet’s financial rating of the Coyotes, Alex Meruelo and associated affiliates. Here is that slide:

It’s not pretty. Tempe staffers circulated a Memo to the Tempe city council revealing staff’s rating of the proposed project. Here is the link: https://www.azcentral.com/story/news/local/tempe/2022/06/01/tempe-memo-gives-coyotes-proposal-low-marks-financial-strength/9973803002/ . In the Arizona Republic’s article about the memo it states, “On the financial front, a city memo released ahead of the June 2 City Council vote gave the team’s plan a 40% score for “financial strength/ability,” the lowest mark on the six-category evaluation completed by city staffers.”

To be successful and move forward the Coyotes will have to give up its ‘ask’ of $200 million from Tempe and its taxpayers, remove the 1,600 residential units to ensure continued viability of Sky Harbor Airport and ensure that a team that has lost millions of dollars year over year has the necessary guaranteed financial stability to successfully undertake a nearly $2 billion development. As Tempe has stated it will be months before the final decision is made and satisfactory answers to these three issues should be the basis for their decision.

© 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.

Feb 22

13

Tempe and Coyotes Saga drags on and on and on

Posted by Joyce Clark on February 13, 2022
Posted in Arizona Coyotes • City of Glendale • Gila River Arena • Phoenix Metro issues  | Tagged With: , , , , | No Comments yet, please leave one

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.

The City of Tempe has still not announced a decision on the Coyotes’ response to their RFP. First they announced they would do so at the end of December, 2021. Then it moved to the end of January, 2022. Now, it’s crickets. To refresh your memory, in July, 2021, the city issued an RFP for “a mixed-use project incorporating a professional sports franchise and entertainment district for two parcels of city-owned land totaling 46 acres at the northeast corner of Priest Drive and Rio Salado Parkway.” The Coyotes, as Bluebird Development, were the only entity to submit a bid on September 3, 2021.

The Coyotes want to build a $1.7 billion development with a 16,000-seat arena, hotels, apartments and shops on 46 acres near Priest Drive and Rio Salado Parkway that the team said would be financed by private investors. The team wants to use a portion of city sales tax revenues generated on the site to help pay for $20 million in infrastructure and other costs to get the site shovel ready.

One obstacle to the proposal has been Sky Harbor Airport. It is concerned, as it should be, that this development will be 460 feet away from the end of one of the runways. It is also concerned about the height of the proposed apartment complexes and the arena itself as well as the intrusive lighting that has the potential to disrupt pilots.

Tempe is having an election to select 3 councilmembers who would be sworn in July of 2022. The city’s Primary Election is March 8, 2022. Usually, but not always, the Primary Election produces the winners as 50% plus 1 vote is all that is needed to have won the Primary. If the winners are not selected in the Primary, there will be a General Election on May 17, 2022.

At a January, 2022, Tempe candidate forum all candidates were asked to respond to the Coyotes’ RFP. They were asked whether they supported the plan and what it would take to get their support for the deal. This is the link to that forum: https://www.msn.com/en-us/news/us/tempe-election-council-candidates-sound-off-on-coyotes-arena-deal-2020-election-at-republic-forum/ar-AASLpx2 . Apparently all are very good tap dancers for they certainly danced around this issue. It really is pretty simple. Either they support giving $20 million taxpayer dollars to a sports owner or they do not. That is acknowledged as part of the deal. Not much in-depth research is required on this deal point. Here are their responses:

John Skelton: A former Arizona Cardinals quarterback who operates an in-home senior care center in the East Valley, Skelton said the NHL team’s proposal appeared to be a “good deal” for Tempe, especially as that land isn’t currently generating revenue for the city. A development of that size could cause traffic issues and he said if elected he would want to look at what the city can do to alleviate congestion around the project.

Casey Clowes: An attorney and community advocate whose work focuses on environmental and social equity causes, Clowes said she grew up playing hockey and attending Coyotes games. If elected, she would look at the benefits and drawbacks of developing an arena as opposed to another type of development on that land. One deal point she would drill down on would be any financial incentives like property tax subsidies offered to the team, which she doesn’t support. She would also encourage the team to prioritize hiring Tempe residents, hiring companies that offer fair wages and hiring companies that use apprenticeship programs during construction.

Gina Kash: The project could help draw money for local businesses and she would support the arena, said Kash, a former top-level Republican caucus staffer at the Arizona House of Representatives where she started in 1998. She wants to see local businesses prioritized in the project and would want to have discussions with residents on whether tax dollars should be used in the deal.

Harper Lines: A member of the Tempe Arts and Culture Commission who oversees community engagement at the University of Phoenix, Lines said the city needs to weigh potential job opportunities and economic development benefits of an arena against transportation issues it could cause. The city also needs to consider the team’s rocky relationship with Glendale and reports of late rent and other payments to Glendale so that the city isn’t saddled with debt if it enters into a deal with the Coyotes.

Jennifer Adams: The only sitting council member candidate running who was first elected in 2018 said she is currently involved in negotiations and couldn’t comment on the question but that she “evaluates everything very carefully” to see if a deal is a right fit for Tempe.

Arlene Chin: Appointed by the council to fill a vacancy on the dais from May 2019 to July 2020, Chin, who works for the ASU Foundation and is active in city commissions and nonprofit boards, said overall she is supportive of bringing more investment to Tempe and of projects that could bring jobs and business development but it has to pencil out financially for the city. She raised concerns about the infrastructure needs to support such a large project, potential burdens it could put on city systems and the cost of moving a city operations yard that is on the site that would have to be moved before construction.

Berdetta Hodge: Hodge, who has long been involved in the local community, said she would support the project if it’s the right fit for Tempe. She is optimistic that a project of this magnitude could bring more jobs and commerce to the city but would want to make sure that traffic issues and neighborhood impacts are addressed. She wants the team to prioritize working with union contractors that provide prevailing wages, create partnerships with community groups and schools to provide opportunities for residents and support parks and neighborhoods. She wouldn’t support city funding for the project and said Tempe residents shouldn’t be taxed for it.

Current speculation is that there are 2 councilmembers who support the deal; 2 councilmembers who oppose the deal; and the rest are undecided.

Here’s my take. I have no insider knowledge and what I offer is pure speculation. While everyone waits for the RFP outcome, political leaders have realized that making a decision prior to the Primary Election on March 8th is not in their best interests. If those who are elected appear to support the deal, they will be comfortable in announcing the RFP’s acceptance. Obviously, the reverse is true as well. Depending on the results of the Primary Election, don’t expect Tempe to do anything until the candidate winners are announced.

You can be sure the Coyotes are putting substantial sums into the campaigns of those who support their RFP. I checked all candidates’ campaign filings of January 31st and there is nothing outstanding with regard to their campaign contributions. That is to be expected. Their next campaign filings will reveal who received money from whom.

However, money can only do so much. There are well organized groups of citizens who oppose this deal as well as the Council’s possible decision to give $20 million in taxpayer dollars to support a sports franchise. This has garnered the attention of the Coyotes who have called upon fans to start an email campaign and petitions in support of the Coyotes. The battle lines have been drawn. Let’s see who becomes the victor.

On a totally separate note and kind of related is the Coyotes/ASU deal that allows the Coyotes to play in a college facility for at least the next 3 years. I suspect all the owners within the NHL are spittin’ mad. The Coyotes’ owner is already financially subsidized in a league revenue sharing scheme. With even less revenue generated in this small facility, the other owners will take it on the chin by having to share even more revenue with the Coyotes. They cannot be happy at this prospect.

Bettman is also allowing the Coyotes to play in a 5,000-seat facility. The actual attendance will be even less than that as seats will be consumed for press and production uses. Yet when others sought temporary, smaller facility usage, historically they have been denied by Bettman. Why the discrimination in this case? I suspect Bettman will do anything to save face when he made his absolute declaration that hockey would stay in Arizona as well as his commitment to the southwest media market.

I wonder if Bettman and Daley have make the trek to Tempe to chat up councilmembers in an effort to shore up support for a positive decision on the Coyotes’ proposal?

My final observation is that I am pleased the City of Glendale made the decision to sever ties with the Coyotes. Their history of ownership has been filled with unpleasant drama and financial issues. Hey, Tempe Councilmembers, those who do not study history are doomed to repeat it. Consider your RFP just the first chapter in your possible, drama-filled relationship with the team. It won’t be your last.

© 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.

Dec 21

10

The Arizona Coyotes are a hot mess…still

Posted by Joyce Clark on December 10, 2021
Posted in Arizona Coyotes • City issue and actions • City of Glendale • Gila River Arena • Glendale Economic Development • Glendale elected officials • Phoenix Metro issues  | Tagged With: , , , , , , , | No Comments yet, please leave one

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.

On December 3, 2021, the State of Arizona’s Department of Revenue (DOR) filed a tax lien against the Arizona Coyotes in the amount of $1.3 million with approximately $250,000 being owed to the City of Glendale for unpaid taxes. The tax lien states the team owes taxes as far back as June 2020 (that’s a year and a half). In the City of Glendale letter sent to Xavier Gutierrez, President and CEO of the Arizona Coyotes, advising the organization if payment on back taxes as well as monies owed to ASM Global, manager of the Gila River Arena, were not paid in full by close of business on December 20, 2021, not only would the organization be locked out of the building, but their Glendale business license would be terminated. See the correspondence below:

 

 

 

 

 

 

 

 

This latest development should come as no surprise if you had read Katie Strang’s Athletic story, Dysfunction in the desert: Finger-pointing, fear and financial woes roil the Coyotes organization published in February 16, 2021. Here is the link: https://theathletic.com/2390146/2021/02/16/arizona-coyotes-investigation-toxic/ . Be forewarned, you must subscribe to the Athletic to read the full article.  It is well researched,   in-depth and a fascinating read. Ms. Strang also provides strong coverage of the organizations’ structural disfunction. Excerpts from her story referring to the organization’s past financial issues include the following:

  • “Meruelo’s acquisition of the Coyotes was supposed to portend a new era for the team. Instead, people within the organization and across the NHL are now wondering if the league erred in approving his purchase.”
  • “In April, the team announced it was furloughing half of its staff due to pandemic-related financial issues. In May, the Arizona Republic reported that promises to pay the arena’s part-time and hourly staff members had not been met. The team and arena management company, in response to the report, said they would ‘finalize our support plan that will be executed within the next 30 days’.”
  • “In September, The Athletic reported that a handful of players did not receive their signing bonuses on time.”
  • “The Athletic identified and spoke with eight vendors with whom the Coyotes had outstanding or past due balances or negotiated their debt to a lower amount.”
  • The Seyfarth Shaw law firm has been retained to investigate various allegations associated with the organization. “Among them, Seyfarth Shaw representatives have asked about:

           The accuracy of financial documents provided to third parties, such as banks and private  lenders, required to meet specific loan obligations. The accuracy of financial reports the organization sent to the league, which reflect team revenues and can potentially impact player salaries and the salary cap.”

It was Ms. Strang who broke the December 8, 2021, Athletic story regarding the Coyotes’ unpaid taxes. Here is the link: https://theathletic.com/news/coyotes-could-be-locked-out-of-home-arena-by-city-of-glendale-for-unpaid-arena-charges-delinquent-tax-bills/ArAVPFTj0LId/ . I imagine Garry Bettman’s (President of the National Hockey League) call to Mr. Meruelo, after the story broke about unpaid taxes was short and sweet…Pay those @#$%&* taxes now!

On December 9, 2021, the Coyotes organization issued the following statement saying they have launched an investigation to determine “how this could have happened.” In their press release they state, “Initial indications are that it appears to be the result of an unfortunate human error. Regardless, we deeply regret the inconvenience this has caused. We will make sure that by tomorrow morning, the Arizona Coyotes are current on all of our bills and owe no state or local taxes whatsoever. And we will take immediate steps to ensure that nothing like this can ever possibly happen again.”

If this sounds familiar, it should. According to Katie Strang’s February 16, 2021, article, when asked about paying players, “Gutierrez described both of these snafus as ‘process’ failures.”

Once again, Gutierrez seems to be pointing the finger at “process failures” implying it wasn’t deliberate but rather a glitch in the system. Maybe if it had happened once and in isolation with no background of financial questions it would be accepted as a plausible answer but there seems to be an ongoing pattern of “process failures.”

It is also no small matter to possibly lose the organization’s business license. It’s not just a matter of possibly being locked out but without a business license even if an alternate venue were found, it couldn’t be used without having a license to do business.

Today, December 9, 2021, the media is reporting that a short while ago, the Coyotes wired the entire amount to the State DOR. We do not know if they have also paid their arrears with ASM Global. I would advise Glendale to double check and to make sure all unpaid amounts are now current. One would expect no less considering the avalanche of negative publicity they generated yesterday and today.

I suspect there is more to the Arizona Coyotes’ story that will have to unfold shortly. Right now, the most pressing issue is meeting the NHL’s schedule deadline to submit the team’s play dates and their location to the League by a January, 2022 date. This early date is because the League has to juggle all teams’ schedules and craft a League schedule that satisfies all.

Forget the possibility of a new arena in Tempe. The immediate and most critical question is where will the Coyotes play while waiting 3 to 5 years for a new arena? That is, IF Tempe accepts their RFP. The only word coming out of Tempe is that they are doing extensive due diligence.

I have found over the years that a deal is best crafted when both parties can trust each other. That may be the most seminal question that Tempe will have to decide. Can they trust the Coyotes to be good, reliable financial partners?

Let me make clear, the City of Glendale is done with the Coyotes. Their absolute refusal to negotiate a long-term, 20 year lease simply made the City’s decision clear. They will not be playing in Glendale for their 2022-23 season or in any future season. That door is closed.

While Glendale has no interest in where they play in the future, I think it’s fun to speculate and the rest of this blog is pure speculation. It is not based in fact or any insider knowledge.

The only viable location is the Arizona Veteran’s Memorial Coliseum. Keep in mind pursing this location as a temporary venue is dependent upon Tempe’s awarding the RFP to the Coyotes. Then it would make some sense to pursue a lease of the Coliseum. My guess it’s a 50/50 proposition as to whether Tempe accepts the Coyotes’ RFP. What if Tempe declines to award the Coyotes an RFP? For many that is an unthinkable outcome, but it is possible. If that were to happen, there would be no need of a temporary location and I would imagine a sale of the team would be imminent. This is the only play the Coyotes have. Forget all other locations. Each has a solid reason to be unworkable.

Here are the problems with the Coliseum. It’s now December, 2021. The work and the expense involved in renovating the building are extensive and even if work on the building started tomorrow, it is doubtful the building would be ready in a mere 10 months in time for the new season in October of 2022.

According to a recent Craig Morgan story of December 8, 2021, entitled Back to the future: Coliseum makes most sense as Coyotes’ interim arena solution, he, too, thinks the only temporary solution for the Coyotes is the Coliseum. Craig Morgan has always been very friendly and supportive of the Coyotes’ ownership over the years. One can speculate that he has sources within the organization and he is reflective of their thinking process.

The Coliseum has major structural problems. The building needs a need roof, new flooring and an additional ice plant for starters. Even with a new roof it can not accommodate a centrally hung scoreboard. There are no suites and maximum attendance would be in the 13,000 to 14,000 range. If the Coyotes do use the building they will continue to bleed financially.

I had heard that it would cost $40 to $50 million to get the building in shape for hockey but Morgan, in his article, cites a construction expert who said a more realistic number is in the $100 million range.

If Tempe awards the RFP to the Coyotes everything becomes a political calculation from that point forward. We can speculate that the Coyotes will go to Governor Doug Ducey and ask to rent the building (maybe for $1 a year?) and having a great deal of Chutzpah, demand that the state pay the cost of renovating the building for them…and, oh, by the way, you have 10 months to do so. Here’s where it really gets political. Ducey is a lame duck Governor, termed out. There are rumors that he intends to run for the U.S. Senate. He will have to make a political calculation as to how such action would play with his voter base. While he might win the support of 17,000 to 20,000 Coyotes fans there are far more voters that would not take kindly to any kind of financial give away to yet another sports franchise using taxpayer dollars. It could become the albatross that makes him unelectable.

The next few months will be very interesting as we watch this play out. My personal take is that the Coyotes will be sold. Alex Meruelo has become a liability to the NHL and especially to Gary Bettman.

© Joyce Clark, 2021       

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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