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
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