The future of the Arizona Coyotes in Maricopa County could be decided as soon as Tuesday evening.
By then, voters in the city of Tempe, Ariz., will have cast ballots on whether the Coyotes should move forward with building the mostly privately funded $2.1 million Tempe Entertainment District, which will accommodate a 16,000-seat state-of-the art NHL arena, a hockey practice facility, a 3,00-seat music amphitheater, and thousands of feet of retail, housing and office space. It’s a mail-in-only special election on three propositions related to the proposed entertainment district, and the ballots went out last month.
Maricopa County is counting those ballots, and if the race is close, the counting could continue well into the week before a decision is determined, which is standard for all Arizona elections because of mail-in ballots. The initial results are expected as early as 8:30 p.m. Tuesday MST.
The Tempe City Council must certify the election and formally approve it at a meeting scheduled for June 1. The Council approved the project by a 7-0 vote this past November with a stipulation that it had to be placed on a public ballot.
The Coyotes feel good about the potential outcome.
“I’m very excited about the vote,” general manager Bill Armstrong said Monday after the NHL lottery. “Our organization has done a lot to get out into the community and really get a message across about taking a landfill and making it into a landmark.”
If the Coyotes win the vote, the first phase of the process will be to mitigate the toxic soil on which the district will be built. That alone should take about eight months and would begin this summer. The new facility, located off the 202 freeway at Priest Road, would be projected to open at the start of the 2025-26 season.
The Coyotes are committed to play at least the next two seasons in the 5,000-seat Mullett Arena on the campus of Arizona State. They had a successful, though money-losing, first season at the Mullet where they amassed a surprising 21-15-5 home record. The team went 7-25-9 on the road.
If the team loses the vote, the NHL’s presence in Phoenix is, at best, murky. The Coyotes have no plan B at the moment, so the entire process would have to begin again.
“That’s something I’d not like to contemplate right now,” NHL commissioner Gary Bettman said last month when he was in town to show his support for the project. “It’s our view that we’re hopeful and optimistic it will pass. And if it doesn’t, I’ll be stunned and surprised, and we’ll have to deal with that.”
It’s impossible to get a sense of where the community stands at this point. Even the most important elections in Tempe draw about a 30% turnout of the city’s 90,000 registered voters, so a few thousand people could decide the election. Maricopa County has a population of 4.5 million.
The Coyotes sent players, club officials, politicos and supporters knocking on doors to spread word of the vote.
The project has the support of the current seven Tempe city council members, the current mayor, unions and a long list of local business leaders.
“We see this as the right deal, the right project and we’re the right team,” club president Xavier Gutierrez said at a recent press briefing.
However, the campaigning has been, at times, contentious. Michelle Gardner, a Tempe resident who voted for propositions 301, 302 and 303, said she’s been bombarded with mail paraphernalia and folks knocking on her door from both sides.
“Text messages, mail, phone, the whole thing,” she said in an interview.
There has been some confusion about how it’s going to be paid for. The Coyotes say they will basically be buying the land and paying for the project with private debt and equity. The opposition contends there are too many public subsidies, a distribution of sales tax and user fees generated by entities of the project to pay down bonds for the land cleanup, and an abeyance of property taxes—for 30 years on the arena phase, and eight years on the remaining hotels, offices, restaurants and condos built during the course of the project.
According to public documents outlining the deal, the Coyotes have three years to complete the arena and up to nine years to build out the rest of project in four distinct phases.
“When they pay $54 million [actually $50.4 million] for the land to the city, $40 million of that is projected toward mitigation,” said Charles Siler, a local political consultant, who represents the opposition of mostly small business owners in the community. “Even when they give us money for the land, we’re taking it to remediate it for them.”
According to project documents, upon formal approval of the plans, Coyotes owner Alex Meruelo must make a $40 million non-refundable payment to start the cleanup for the arena section of the project, which will be a cash expense, and another $10.4 million upon implementation of phase three. A tax district will issue $209 million in bonds including principal and interest to finish the mitigation. Those bonds can be broken up into as many as four separate smaller issues and are to be repaid by the sales taxes and user fees generated by the project.
Meruelo then must secure the money privately through debt and equity to begin construction. When he does that, according to a clause in the overall agreement, Tempe will begin selling him the 46 acres of land at roughly $25 per square foot in four different phases at a total of $50.4 million. The arena phase is listed at $12.1 million. Another clause states that the initial $40 million deposit for cleanup will be used as a credit for the overall purchase price of the land.
No bonds will be issued, and no land will be transferred until Meruelo secures the money to begin construction on the project.
“That’s why the deal is written so $600 million of private money must be raised before a single bond is sold,” said former Tempe mayor Hugh Hallman, who was on the committee for the city that spent eight months negotiating the deal with attorneys for the Coyotes. “The first phase of bonds is about $80 million [actually $73.6 million].”
The Coyotes guarantee repayment of the bonds with the project as collateral. “The city is not on the hook for any of this,” Hallman said.
Bettman has cheered on the project, too. “Frankly, I’m having trouble understanding what the downside of it is,” he said.
By the end of next week at the latest, Tempe voters will have rendered their verdict.
