Coyotes owners seeking up to $750m in tax kickbacks from Arizona, definitely think Arizona is stupid

We finally have a dollar figure for how much money in state sales tax kickbacks the Arizona Coyotes are looking for as part of a deal for a new arena, and holy crap:

One proposal floated at the Capitol would allow from $350 million to $750 million to be generated for an arena from sales and excise taxes imposed within a new taxing district. The plan, detailed in a 49-page draft bill obtained by The Republic, also could allow public funds to be used to build a hotel or other commercial real estate within the district, according to those who have examined the proposal…

The team would contribute $100 million to $170 million toward any project, according to Anthony LeBlanc, the team’s president and chief executive. He said the franchise is looking to build on 50 to 60 acres.

Suddenly, all of LeBlanc’s “we’re gonna build a new arena somewhere that’ll make us more money than playing in our already-built arena without that sweet $8-million-a-year subsidy we’ve been getting” talk makes sense: If they’re getting as much as $750 million in state tax money to build an arena, and maybe a whole bunch of commercial and hotel development on 50 acres of surrounding property, the team owners can put it pretty much anywhere and it’ll turn a profit. Hell, it might be a good deal even if nobody goes to Coyotes games, which is probably the business model that LeBlanc is looking at anyway.

Makes sense for the team owners, I should say, not for the state, for which a giant tax-increment financing district makes absolutely zero sense. For, say, Mesa or Glendale to devote tax dollars to a new arena is at least arguable, since they can hope to steal some consumer spending from the next town over. (This figure is usually overblown, but at least it’s non-zero.) For the state of Arizona, though, the benefits are as close to zero as possible: Hardly anybody ever travels to Arizona just to see a Coyotes game, which means any sales tax money that would be siphoned off to the team’s owners would be money that otherwise would be collected somewhere else in the state — in Glendale currently, but scattered all over  the state even in the event that the Coyotes were to leave Arizona entirely and people went back to spending their Coyotes ticket money on whatever they did before the Coyotes arrived.

The tax-subsidy bill is currently stalled in the Arizona legislature as this session runs out the clock, but LeBlanc has vowed to bring it back up in 2017. There may well be an announcement by the Coyotes in coming weeks of a preferred arena site, but make no mistake, that’s going to be the sideshow: Keep your eyes on this TIF district, because when it comes to taxpayer costs, it’s likely to be the main event.


10 comments on “Coyotes owners seeking up to $750m in tax kickbacks from Arizona, definitely think Arizona is stupid

  1. Geez. I don’t even know what to say anymore. Just when you think it couldn’t get any more brazen, here comes another. So the state is going to indebt itself to the tune of 3/4 of a billion dollars for a franchise barely worth a quarter of a billion? The next time some snarky politician have the gall to criticize the social welfare state, throw this malfeasance their way. The amount of sports-related welfare has to be approaching social levels in terms of per-dollar expensed.

    Again, as a small business owner, why can’t I get my losses subsidized? I’m told to either generate more revenue or close my doors. Yet in sports or multi-billion corporations and financial institutions, just pass off the deficits to the public.

  2. This will never happen. Even I dont support this. However, I have no issue with them trying this. Many other different type businesses try the same thing………….with the same failed results.

  3. Have I ever mentioned how much I detest pro sports subsidies? Man, this is about 3 times what that franchise is worth. Just buy the team. Done.

  4. Something else to keep in mind. If the Coyotes have no where to play next Season, maybe they end up in Quebec City or Las Vegas.despite what Bettman ( NHL Commissioner thinks), and the currency issue, I think Quebec City would be perfect. I am an Islander Fan in Mesa, Arizona (the only Hockey fan I’m my office). No one cares about the Coyotes, maybe ending up in a City where they will be appreciated ( Quebec City), would work best.

  5. I have an issue with them trying this if any of them ever talk about tax or policy issues with any credibility in the future.

  6. Every time I think the pro sports welfare train cannot get any more absurd it manages to do so. Agree with Jay above 100%.

    “The next time some snarky politician have the gall to criticize the social welfare state, throw this malfeasance their way. The amount of sports-related welfare has to be approaching social levels in terms of per-dollar expensed.”

    Clearly “socialism” is fine as long as rich people are the ones benefiting from it.

  7. Indeed, Jerry, if these gambits all ended in failure, an NHL (and likely NFL and MLB) franchise would never have arrived in Arizona.

    I’m trying to recall what the Jets were deemed to be worth in 1996 when Shenkarow sold them to Richard Burke & Gluckstern. I have in mind it was around $60m, but am not certain.

    Then Glendale (less than 5 years later) decided to build them an arena worth $185m… so why not try the same prorated gamble again?

    If there’s one thing our present political cycle proves, it’s that there’s stupid people absolutely everywhere….

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