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 parts I and II we looked at the proposed Coyotes project and its funding as well as the stipulations that would be imposed by the FAA. In this part we look at the major hurdles to be overcome.

The first challenge for the Coyotes’ proposed development is that of the mechanism for the repayment of the 30-year, $200 million worth of bonds through a Community Facilities District (CFD) and Government Property Excise Lease Tax (GPLET) Both of these mechanisms are legitimate and have been used by cities throughout the Valley. The Coyotes have said the bulk of the repayment relies upon sales tax generated on the site. In the city’s negotiations with the Coyotes, just one of the issues to be resolved will be who pays any outstanding balance of the annual repayment of principal and interest on the bonds if the sales tax fails to generate the full annual amount needed. Will Muerelo cover it or will he expect Tempe to cover it?

The second challenge, and a major one at that, is the question of Tempe’s taxpayers’ support of the sales tax generated to be used to pay off bonds designed to support another sports venue in the Valley. The assumption by many is that Tempe taxpayers would rather see this development’s sales tax used for city uses that can be enjoyed the general public.

Data Orbital conducted a statewide poll on August 30-31, 2021. Here is the link to their findings: https://www.dataorbital.com/the-blog/taxpayers-icy-at-thought-of-paying-for-a-new-arizona-coyotes-arena . The results summarized are:

  • Voters support for funding a new Coyotes arena

No  47.7% / Yes  39.0% / Undecided  12.7%                                                                  

  • Voters support for using Covid relief funds for a new arena

Democrat:   No  84.4% / Yes  12.3%    Republican:  No   80.2% / Yes  17.0%    Independent:  No  79.0% / Yes  16.1%                                                                  

  • Voters support for elected officials who use taxpayer money for a new arena

Less likely to support  60.4% / More likely to support  29.1% / Undecided  9.6%

I happened to talk to a zoning development professional recently. This person held a meeting in Tempe to gauge neighborhood support on a project that had nothing to do with a new Coyotes arena. Even though the development had no connection to or relationship to the proposed arena, all the Tempe citizens wanted to talk about was their opposition to a new Coyotes arena. Admittedly, this is anecdotal, but it may very well express the level of support among Tempe residents.

The third major challenge is the Federal Aviation Administration’s (FAA) specific height limitations for the site as well as the city of Phoenix’s objection to the proposed residential apartment complexes planned to be built directly in the path of Sky Harbor’s runways. Historically, the FAA’s height limitation drove a proposed Cardinals’ stadium to seek another location. Could the same be true for the Coyotes?

If the Coyotes accede to the FAA’s requirements as well as Phoenix’s prohibition on residential for the site that would require the project to be redesigned as well as scaled back considerably. Does it continue to pencil out in terms of repayment of the $200 million in bonds? Keep in mind that the Coyotes said they anticipate the “bulk” of the bond repayment would rely upon sales tax. Tempe should take a very close look at this issue.

The fourth challenge is if Tempe decides to award this RFP to the Coyotes the arena probably won’t be ready until 2024 or 2025. In the meantime, where will they play? Obviously, it won’t be in Glendale. There has been a lot of speculation about using Phoenix’s Veteran’s Memorial Coliseum.

There is no way that Phoenix can craft an exclusive deal with the Coyotes. Keep in mind that this is a taxpayer funded, public facility. If I remember correctly, the state also has a financial stake in the coliseum. As such Phoenix would have to issue an RFP for the coliseum just as Tempe did for its vacant site. Rather than receiving only one response to its RFP as occurred in Tempe, expect multiple responses for the coliseum.

It would take time to do a thorough review of all responses before an award could be made. Could all of this be done by next season? Your guess is as good as mine but as the clock keeps ticking, it seems unlikely.  In addition, the coliseum would require major renovation plus chillers to make ice. All of the renovative work takes time and money. The best guess currently is that it would take about $40 or $50 million to renovate and at least 6 to 8 months to do so after any award is made. Add that to the Coyotes’ announced investment of $1.2 billion for its proposed development in Tempe.

So far, there has been no RFP issued for the coliseum.




© Joyce Clark, 2021       


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