Coyotes ask Arizona for sales-tax kickbacks to fund new arena, because they think Arizona is stupid

We’ve gotten a hint of how the Arizona Coyotes owners want to finance a new arena, wherever it ends up, and surprise, surprise, it’s not “with that U.S. savings bond we’ve been holding onto for the right moment,” but rather a whole buncha tax subsidies:

There could be a measure introduced at the Arizona Legislature in the coming weeks to create a special taxing district possibly to capture sales tax to finance development of a new arena…
“We have had exploratory conversations with a number of different governmental entities. However, we have not reached any agreements, even in principle, with anyone,” [Coyotes CEO Anthony] LeBlanc said in a statement. “We are also exploring some legislative options. However, nothing has yet been introduced. If anything is introduced, it will be location agnostic, and therefore not focused on any one location or jurisdiction.”

Let’s step back for a moment here to consider how incredibly insane it would be for the state of Arizona to siphon off sales tax money around a new arena and hand it over to the team: Sure, sales tax receipts would go up around an arena, especially if you built the arena in what would otherwise be the middle of the desert. And overall sales tax receipts might even go up in whatever city you built it in, since people would be spending their money there instead of in Glendale now. But state sales tax revenue wouldn’t change one bit, unless the lure of a new hockey arena suddenly got additional people pouring across the New Mexico border to watch Coyotes games, which I don’t think even LeBlanc could pretend with a straight face. And even if the district were to just siphon off local sales taxes (which aren’t that much: 2% in Phoenix, 1.75% in Mesa), the state should have no interest in encouraging cities to steal sales tax revenue from each other and then hand it over to a private sports team.

There’s absolutely no way of knowing how much money is at stake here, since any sales-tax kickback district could be drawn as small or as large as you like, and so encompass any amount of sales tax receipts. But however it works out, the Coyotes are clearly looking for someone else to bail them out of their horrible deal with Glendale where LeBlanc only got a free arena and now wouldn’t get paid to run it as well because he refused to enter into a bidding process to see how much he’d get paid. This can only end stupid.

19 comments on “Coyotes ask Arizona for sales-tax kickbacks to fund new arena, because they think Arizona is stupid

  1. The sales tax he spoke of would go to pay for the arena debt. Not in the pockets of the team. The talked about possible arena at ASU, they ALREADY have a tax district set up. It was set up so ASU could fund the renovation of the football stadium. The tax district could be set up in downtown Phx so its like a user tax. A small area that benefits from the events at an arena pay an additional tax.

    So, if you really had a clue about this, that legislation is aimed at Phoenix only. The other rumored site is on a local reservation. That site would be funded by the tribe. The Salt River Tribe. The one that built the D-Backs and Rockies spring training site. The same tribe that has approached the Suns about building an arena to house them also.

    Another issue you miss totally, no matter where the Coyotes go that is not on Reservation land, they will share the arena with other sport. In Phx with the Suns, Rattlers, Womans WNBA etc. If its at ASU, The arena will house ASU mens and womans basketball,. mens NCAA D-1 hockey, Gymnastics, V-Ball, wrestling, probably USA basketball.

    As happens often, you write a story devoid of ALL the facts.

  2. “The sales tax he spoke of would go to pay for the arena debt. Not in the pockets of the team.”

    I’ll just let that one sit there for a bit.

    As for the rest of the story, the Phoenix Business Journal article I linked to specifies that a sales tax district could be created in either Phoenix or Mesa, not just Phoenix. And Salt River has never said word one about funding an arena, just possibly hosting it.

  3. Mike Sunnocks of the PBJ is one of the most inaccurate reporters in all this.. You have tgo be careful of local reporters in this town. Just last Thursday a 3rd rate hack from a Glendale paper reported his NHL sources inside the NHL said that the NHL would not let the Yotes play on reservation land. Story got some nice play………….for a couple hours when Bettman said the story was………to be nice. Crap.

    The District tax is not a same, or close to the subsidy that they got from Glendale. That was what you were alluding to.

    Where has the Salt River Tribe said they were “Just possibly hosting it?” Are they just “hosting” the D-Backs and Rockies site? When they made the offer to the Suns, was that just them “hosting” them? I dont think so.

    So, in reality the Salt River Tribe has said NOTHING publicly about a possible arena. Not even just “hosting” one.

    If you were to really try to be objective and follow this, there is no doubt the Coyotes have talked with the Tribe. And the talk is 100% the tribe possibly financing it. It is clear as of now, there is NO deal set in stone on any front. The city of Phoenix is 100% going to provide in some way a new arena for the Suns. To have the Yotes as part of that is an added benefit to the city and arena.

    By the way. if this tax would be approved, it doesnt come out of existing taxes. It would be a tax added on to area businesses. Not the entire city or state. Just like ASU is doing right now to fund the football stadium renovation.

    The tax district is also one of the funding methods in Glendale that pay partially for the arena debt to this day. The COG put a separate tax on a shopping center and that separate tax goes to the Arena bond debt..

  4. “The District tax is not a same, or close to the subsidy that they got from Glendale.”

    Well, sure, it can be, if the district is drawn large enough. Which is what I wrote.

    You argue about 20 different things, half of which are contradictory (a sales tax would be “use tax” but also a “tax on area businesses”), so apologies if I can’t keep them all straight. Anyway, I by no means take the PBJ as gospel (even if it does have the best acronym of all time), but I’m still inclined to take it more seriously than a comment-thread assertion cited to “the talk is.”

  5. Also, here’s the part where feel obligated to point out to anyone who’s thinking of jumping in that personal attacks like “if you were to really try to be objective” are off-limits when directed at fellow commenters (I usually give them a pass if directed at me), so everyone be cool, okay?

  6. Here is the OPINION piece that the person talks about, and about Bettman’s denial, maybe because the team is negotiating with TWO AREAS for a possible arena. If he did say it was true, maybe price drops for any arena? Coyotes fans are the most one-sided fans I have ever seen and the fact that this hockey team has costs the city over 150 million and they had no say in anything, it is about time they got rid of them.

  7. I don’t think anyone has spoken more eloquently about the foolhardiness of special tax districts better than John Oliver did last Sunday. Highly recommended viewing.

    And unless you want to buy a new keyboard, please don’t drink coffee while watching this.

  8. While a Coyotes arena in the East Valley has been talked about as a joint venture where ASU’s newly stepped up D1 hockey program would also play, I am not sure ASU’s basketball, gymnastics, volleyball, wrestling, etc. would necessarily move from the current on-campus arena (which is obviously not a new building).

    That, obviously, depends on how far off campus it would be built. Hockey currently plays off campus and I am not sure if the current on-campus arena can be retrofitted for making ice or not, or if that’s a non-starter.

    As for all the other questions about the plan, I have no idea. But a joint venture between the Coyotes and ASU hockey has been floated. (And hopefully would go better than the proposed Cubs-ASU joint baseball venture.)

  9. I believe its pretty clear that any new arena at ASU will be at the site off the current Karsteen Golf Course. ASU has been clear for a couple years they were going to use that for commercial development. There also has been for a long time talk of a major hotel/resort across the street on Rio Salado. There has been revived talks of that lately.

    Just like the State Farms Facilities help with the special tax district to pay for the Football stadium renovation, a new hotel and other commercial development will fund a new ASU basketball/hockey arena. That area is some of the most prime commercial land in the entire valley.

  10. “Coyotes ask Arizona for sales-tax kickbacks to fund new arena, because they think Arizona is stupid”

    Can you really say that’s an unreasonable thing to think? OK, maybe it’s unreasonable to think about all 6.8M people who live in Arizona, but when it comes to the state legislature…well, they sort of have a national reputation to defend.

  11. Im honestly infuriated they can try to again build an arena on public money; they shouldnt be allowed to play in another unless its privately funded, or enough years pass by that both the Suns and their current arena respectively can be defendably replaced.

    Also James, youd have to be crazy to think that development will generate 300 million for the city/state to spend on an arena (if it even ever happens)

  12. Oh boy. This is simply a shifting of dollars and changing its name. Not only this, but people tend to confuse revenue with actual net tax revenue. For instance, the Super Bowl in Santa Clara may have had an economic benefit of $700 million, yet what is the net tax revenue? You know the revenue the city/county/state actually collects? How much of that revenue was originated from the actual event? It is mere hilarity that anyone could think professional sporting franchises enrich the locales that finances their palatial stadiums. It has been proven repeatedly they do the exact opposite. Tell the cities of St. Louis, Columbus, Sunrise (FL), Tampa, New Orleans, Cincinnati, etc. that continuously have budget deficits because they are paying the costs just to maintain the stadium/arena/baseball fields. The only thing a publicly-financed stadium provides is morale for the public and cash for the owners. Still baffled how people cannot understand this blatant welfare grab, yet has no problem calling out those who actually need that kind of assistance.

  13. “…a new hotel and other commercial development will fund a new ASU basketball/hockey arena”

    Yup, sure will. That’s what the folks in Glendale were assured 10 years ago. That’s the beauty of the subsidized-sports business – it doesn’t matter how many times the promises fall short, there’s always another town ready to bite. Sports socialism is just like all socialism – it fails not because the system is bad, it’s because, darn it, they just haven’t done it right yet!

  14. I’d say the arena crows in Arizona needs to contain their appetites.

    Even big-time NCAA hockey schools like Minnesota and Boston College typically play in arenas seating around 10,000 (or smaller). No college hockey team needs a pro-style 18,000 seat arena with luxury boxes and the like. I’m sure Arizona State will be the same. Arizona State basketball has not often been a big draw either.

    Based on lots of other evidence, it is doubtful that the Coyotes are going to be willing to subsidize the operations of college sports (unless they are paid to run the arena as a whole). So I’m not sure where the idea that ASU sharing with a pro team is such a great idea for ASU, unless they want to pay for the “benefit.”

  15. Wow! I don’t know if James is professionally linked to the Coyotes or the arena in some way or if he is just a really enthusiastic fan but I do know the following NHL attendance figures which lists the Coyotes as 29th out of 30 teams in the league, only in front of Carolina (which is another candidate for relocation). There’s only one NHL team in all of New England but Gary Bettman sure loves putting teams in American deserts.

  16. And before someone goes off about the attendance being low because of stadium location, look at their historical performance. The original downtown arena with 16k for hockey and Glendale (starting halfway through ’03-’04) with17k+ have strikingly similar attendance records. If not enough people show up to your burger restaurant, you don’t stay in business.

  17. Mike Sunnocks of the Phoenix Business Journal is a fine journalist — one of the best that has not been run out of town for reporting the facts. The Salt River Tribe is considerably more business savvy than the Arizona Legislature and will turn down any proposal that does not provide a positive income flow to the tribe and its members. You see, the Salt River Tribe represents its people, not outside corporations.

  18. Some replys. Sunnocks has been outright wrong way to many times to be considered legit. He doesnt check sources and runs with falsehoods to many times.

    Next, Attendance is not a valid poiint. It was better when they were downtown. Most of the fans and CDN winter visiters live on the East Side. Moving to an arena in the central or east valley will be an instant boost in both ticket sales and other revenue. A major increase.

    ASU hockey is NOT seeking an 18K arena for its team. The size of the arena ASU builds depends on the tenants. It will be adjusted accordingly.

    ASU already has the tax district set up to fund the $257M renovation of the football stadium that will be complete in 2 years. The “proposed” site of a new arena will be surrounded by even more residential and commercial building than is supporting the football renovations.

    As ALL this relates to the Coyotes. Both Phx and ASU are going to build arenas with OR without the Coyotes. In both cases, having the Coyotes as a part of either of those buildings is a plus. The 3rd option would be on the reservation and that would bear NO tax payer cost as would the one on the ASU site.

    So, Neil………I get you dont like tax payer funded arenas, so why the necessity to branch off and be critical of NON tax payer funded stadiums and arena’s?

  19. Um, you just said that Phoenix and ASU would be building arenas with tax money.