The Tempe City Council in Arizona unanimously passed a $2.1 billion proposal for a mostly privately financed arena and entertainment complex proffered by the Arizona Coyotes in the waning hours of Tuesday night.
Now, the real work begins. The four-hour session, replete with 90 minutes of generally favorable public comments, sends the proposed project on to a May 16 referendum of Tempe voters.
Coyotes president Xavier Gutierrez said the National Hockey League club will leave “no stone unturned” when campaigning voters for the new arena during the next five-and-a-half months.
“Are you ready for the next step?” Gutierrez rhetorically added in an interview after the meeting.
But will the Coyotes, who are playing at Arizona State’s 5,000-seat Mullett Arena until the new Tempe Entertainment District (The TED) opens in 2025 at the earliest, be ready?
The reality is that a very small group of Maricopa County hockey fans hold the fate of the Coyotes’ project in their hands.
Tempe, just east of Phoenix, is a town of 190,000 people in a county of 4.5 million. There are 92,529 registered voters in Tempe, according to Maricopa County Election Department records, and the Coyotes need to win above 50% of the vote for the project to move forward.
In the May 2020 election that seated Tempe Mayor Corey Woods, who presided over the special session, only 30% of registered voters came out to vote, the mayor said. That’s just 27,599 voters.
“I would suspect that an election like this, with a professional sports franchise involved and a subject that has a lot of interest among voters, that we’d have a fairly high turnout,” Woods said. “I’m looking forward to our residents being active participants in this process.”
Still, the city election won’t include voters from nearby Scottsdale, a city of 243,000 that has a big segment of the Coyotes’ fan base, or from Phoenix, home to 1.6 million people.
The NFL’s Chargers were recently in a similar situation. In November 2016 when the team had a proposition for a new stadium on the ballot, the election was restricted to the 1.4 million San Diego city residents, rather than San Diego County’s 3.3 million.
The San Diego measure received just 42.5% of the vote when it needed 66.7%, so the Chargers exercised an option to leave San Diego. The club relocated to Los Angeles after the 2016 season.
But in San Diego, Chargers owner Dean Spanos didn’t run a viable campaign to get word out about the pro stadium vote.
In Arizona, the Coyotes are considering hiring outside politicos. “We’re still determining what that campaign is going to look like,” Gutierrez said. “But I can tell you it’s going to be grounded in this community and making sure that every voter in Tempe knows what this project is about, what this deal is about, and who we are.”
There will likely be some confusion over the fact that the council approved a 30-year property tax abatement on the proposed 16,000-seat arena, practice facility and 3,500-seat theater, and an eight-year abatement on the rest of the project.
Woods said those numbers are consistent with other publicly financed arenas and stadiums in the county, which are also assessed no property taxes. “Right now, you’re talking about a landfill that’s not generating any property tax revenue for the city.”
For Tuesday night’s Tempe City Council meeting, all the big shots came out.
Commissioner Gary Bettman and his deputy, Bill Daly, flew in from New York City and made a hasty return to nearby Sky Harbor Airport for a red-eye flight back as soon as the session concluded with the 7-0 vote at 10:54 p.m. MT.
Coyotes owner Alex Morello made a rare public appearance and stepped forward to address council members as the club made its detailed presentation replete with slides, charts and an animated video of what the completed project might look like.
“I just thought it’s fair for me to come up here and show you some respect,” Morello said. “If you have any questions for me I’d be happy to answer them.”
The council had no questions. All had been answered during the hundreds of hours of negotiations since the council voted 5-2 on June 2 to move forward with the Coyotes’ proposal.
Councilmember Doreen Garlid was one of the dissenting votes in June who flipped on Tuesday night. One of her issues was the financial wherewithal of the Coyotes, who were valued this year at $465 million, last in the NHL, according to Sportico’s recent valuations. After months of poring over the club’s books, she concluded Morello has the money, or at least the access to money, to complete the project.
Bettman concurred.
“It all starts with Alex Morello,” Bettman said. “And he’s going to do what he needs to do to make sure he has the funds for this project. The answer is, you finance it, and you use your own resources, which are substantial.”
That process, along with the campaign, is about to begin.
“This is a major opportunity to go to our financial sources that have already expressed interest and say we’re moving on to the next phase of the journey,” Gutierrez said. “The voters have to validate it, but clearly this is a major opportunity to begin those conversations in earnest.”