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
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