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}     

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