The fate of the Coyotes’ Tempe arena and entertainment district proposal may be entering its home stretch. City staff is expected to present to the Tempe City Council a combination of findings, research and progress made in negotiations with the Coyotes on outstanding issues surrounding the proposal. Council will review that information in executive session on Thursday, before holding a public meeting that same evening.
None of the information that is presented to council by city staff in executive session will be discussed in the open meeting.
Councilmember Randy Keating joined the PHNX Coyotes show on July 27 at Four Peaks Brewing Co. in Tempe to discuss the state of the proposal ahead of that meeting.
“There’s different pain points that each council member brought up to the Coyotes,” Keating said. “They’ve been working with the Coyotes to try and smooth over what are outlying issues.”
Among those issues are noise and traffic concerns from nearby residents, the use of union labor for construction and future employment, the structure of the financing and the well documented disagreement with Sky Harbor International Airport officials.
“From talking to the Mayor and another one of my colleagues, it’s my hope that this is done by, at the very latest, the end of the year,” Keating said. “My preference would be before the holiday season starts, just because it’s hard for the public to participate when they have all sorts of holiday events and things like that and we want to make sure it’s a robust public process. If we have this thing wrapped up by Halloween, I would be thrilled.”
Keating made it clear that it was incumbent upon the Coyotes to address any remaining issues, both with council and with the public, while convincing all stakeholders that this project is the right move for the city.
“That’s something that they need to do because, look, ultimately we’re all politicians up there and no one wants to do something that is wildly unpopular,” Keating said. “The onus will be on the Coyotes to sell it, but I think the structure of the deal as it is now is something that could be sold to the people of Tempe as long as it’s done in a thoughtful way.
“The reason why I think this deal is different is because it’s fan funded, and I really appreciated how the Coyotes came up with that model. When people say, ‘I don’t want to pay for the arena,’ I say, ‘I don’t want to, either.’ The thing is, if you don’t go to a game then none of your money is going to go to fund the remediation of the land to build the arena.”
While the airport remains an issue in the eyes of the Sky Harbor and Phoenix officials — specifically the construction of residential units along the Salt River — Keating said that city staff including council, has a different interpretation of the intergovernmental agreement between Tempe and Phoenix after hearing Coyotes attorney Nick Wood address the issue for the first time at the June 2 meeting.
“I really felt the energy in the room change after the Coyotes had presented, and I think we saw that in public comments as well,” Keating said. “I can tell you anecdotally from the communications we’ve been getting from the city, it went from all negative to probably 50/50 as far as pro or against.”
Here’s what Keating said specifically about the airport issue.
“It’s a complicated issue. Looking at the 1994 intergovernmental agreement, to me, it appears that this is something that we are absolutely allowed to do. I know Phoenix and Sky Harbor have a different understanding of that. I can tell you our legal team is working on it. There’s literally decades of documents that they have to go through and there’s all kinds of other agreements that may conflict. So there’s a large effort going on in the City of Tempe side to see if this is something that we can legally do. Not only that, but to work out something that is mutually beneficial and amicable to all parties; Sky Harbor and Phoenix. No one wants to do this in an ugly way. We’re a region of 20-some municipalities. Everyone is looking to try to solve this in the most amicable way possible and I’m confident that we’ll get that issue resolved.”
There are some who believe that piece is critical for the Coyotes to secure the financing necessary to build the project, including Richard Rodier, an attorney who previously worked for the NHLPA. Rodier was also the lead adviser to Research In Motion CEO Jim Balsillie in the billionaire’s bid to buy the Phoenix Coyotes out of bankruptcy and relocate the team to southern Ontario in 2009.
The Coyotes declined comment on Rodier’s assertion.
On June 2, the Tempe City Council voted 5-2 to approve the RFP and move forward in negotiations with the Coyotes to build a new arena and entertainment district in Tempe. NHL commissioner Gary Bettman endorsed the plan “without reservation,” adding that a 30-year no-relocation agreement would be required to underscore the league’s commitment to the Valley. If the proposal is approved, Bettman also promised that Tempe would host an NHL All-Star Game and an NHL Draft.
On Sept. 2, 2021, the City of Tempe reported that the Coyotes were the only group to submit a proposal in response to its request for proposals for a project incorporating a professional sports franchise and entertainment district for two parcels of city-owned land totaling 46 acres at the northeast corner of Priest Drive and Rio Salado Parkway. The site, which is located on the south bank of the Salt River, previously was used as a sand and gravel mining operation and a dump.
The Coyotes have proposed a $1.7-billion development that includes a hockey arena, hotels, apartments, retail stores and a sports book. The team says that the project would be privately financed, although it hopes to use a portion of city sales tax revenue generated by the development to help pay for $200 million in additional costs.
The Coyotes would need to remove an estimated 1.5 million tons of trash from the site. The team would then need to remediate the site before construction begins at a cost of approximately $70 million. The team would pay $40 million for the east parcel cleanup and commit $8 million toward remediation of the west parcel, with the remaining costs paid through bonds. The bonds would also pay for such infrastructure as electric lines, water lines, sewer lines, roads and a parking garage at the northeast corner of the property that would be owned and operated by the city.
The team says that the project could generate $154 million in new taxes for the city over a 30-year period, with $5.9 billion in direct spending in the city and 6,900 permanent jobs created.
We’re moving forward with the City of Tempe on our proposed arena development project.
Take a look at what we hope to build. pic.twitter.com/7sSZBujGuA
— Arizona Coyotes (@ArizonaCoyotes) June 3, 2022
Keating did not outline any specific schedule of events that will follow Thursday’s meeting, although he did note that the Coyotes and city would both be soliciting public feedback; a process that has already begun.
Keating also underscored the magnitude of this decision in the context of the Coyotes’ stormy history in the Valley.
“Nobody wants a repeat of the past in this deal,” he said. “Everyone that is going to either vote in favor or against this deal is going to have to defend that vote and it’s going to be part of their legacy on the council.
“Everyone has so many eyes on this thing right now that it has to be done in the smartest, most sustainable way to make sure that every party comes out happy and thrilled about the direction we’re going.”