Arizona senators push to give Coyotes, Suns, D-Backs up to $1.1b for new arenas and stadium

Arizona Coyotes owner Anthony LeBlanc may not have any idea where he wants to build a new hockey arena now that Arizona State University pulled out of a planned venue in Tempe, but that’s not going to stop members of the Arizona state senate from pushing legislation to give him $170 million in sales- and hotel-tax kickbacks to help build one. And hey, while we’re at it, let’s make it easier for the Diamondbacks and Phoenix Suns to get state subsidies, too:

The bill would allow creation of “community engagement” districts of up to 30 acres. Within them, up to half of the state’s share of sales taxes generated from retail sales and hotel stays would be dedicated to paying the bond debt for new sports or entertainment facilities. It also would allow an additional 2 percent district sales tax to be applied to all purchases within the district, with those revenues also dedicated to defraying the cost of facility construction.

In the case of the Coyotes, the plan envisions public funding covering 57 percent of a new arena’s cost, with new sales taxes covering $170 million and the host city contributing $55 million. The Coyotes said the team’s portion would be $170 million, amounting to a 43 percent contribution toward the $395 million total cost.

This is a bit of a hybrid bill, combining super-TIFs (where half of existing sales and hotel taxes would be kicked back to pay teams’ construction costs) with a new sales tax surcharge in the area around the new sports venue. The math on how much of a subsidy this amounts to gets dicey — virtually all of a TIF would be cannibalized from sales and hotel tax receipts elsewhere in the state, but a slice of a sales tax surcharge could come out of a team owner’s pockets, depending on how big the surcharge area is — but the vast majority of it would be a straight-up gift to team owners, all to allow cities in one part of Arizona to steal teams from cities in another.

You’ll note that I said “teams,” not just the Coyotes. That’s because the new super-TIF districts could be applied to help build any new sports and entertainment facilities. The only limit is that state money would only be allowed to pay for half of construction costs up to $750 million — meaning that if the Coyotes, Suns, and Diamondbacks all availed themselves of the legislation, as you know they would love to do, Arizona taxpayers could potentially be on the hook for $1.125 billion. (If the Coyotes stick to their $170 million demand, the max would be only $920 million, but as we’ve seen before, sports construction costs only tend to go up, and there’s nothing stopping LeBlanc from revising his ask as time goes on.)

Now, the bill has so far only passed one committee in one branch of the Arizona legislature — Sen. Bob Worsley of Mesa used one of those “gut an unrelated bill and insert your own language” tricks to get it on the agenda of his own transportation and technology committee — and none of the teams involved have identified places where they’d like to build new facilities, or how to pay for their halves. Still, it’s a pretty remarkable response to a “crisis” started by the Coyotes’ need to leave their nearly-new arena in Glendale because … hey, Coyotes ownership, why do you need to leave again?

“It does not work in Glendale,” Ahron Cohen,the team’s general counsel, told the Senate panel. “In 2013, our ownership group bought the team. The previous ownership chose to go out there.”

Oh. Well, if it “doesn’t work,” then it doesn’t work. I thought you were going to say something about how you couldn’t bear to be forced to compete for the rights to operate the arena instead of just being handed $8 million a year by Glendale in a no-bid contract. Good thing it’s not that, because asking the state of Arizona to pay you a couple hundred mil to get you out of that pickle would be chutzpah in the Nth degree, and only complete morons in state government would actually consider it.


28 comments on “Arizona senators push to give Coyotes, Suns, D-Backs up to $1.1b for new arenas and stadium

  1. Anthony LeBlanc, since 2009, has been studying this market and in 2013, finally cobbled a group together to purchase the team, in Glendale.

    So why is the location not good now?

    Is was, until their arena management contract was cancelled due to a number of non-compliance issues, among other things, in a report released by Glendale.

    http://www.glendaleaz.com/auditor/documents/ArenaContractComplianceReview2015.pdf

    Now, all of the State Legislative representatives, and any other city personnel that would want to do business with them, should read it before making any financial decisions with this group again.

  2. All teams ? There’s a Phoenix MLS bid planning a privately funded stadium. Guess what would happen if they got in line for that hand out. Probably the same thing that happen in Florida.

    • Presumably this just sets up the funding structure, and the state legislature would still need to approve setting up the TIF districts on a stadium-by-stadium basis. That said, signing the check and then waiting to fill out who it’s going to is never the smartest policy.

      • Turns out the lead investor has an agreement to put stadium on tribal land. So a TIF. wouldn’t apply. WOW these guys didn’t have any problems getting a deal done with Native Americans wonder why Coyote couldn’t get deal done ?

  3. Good work, as always, Neil!

    I agree with KT, there are a lot of morons (or sellouts) in the AZ State Legislature…as elsewhere, I’m sure. So, it’s important that we call them out by name.

    In this case, Bob Worsley, so called “Republican” senator from Mesa, AZ, is leading the charge to give away our tax money to a millionaire: Will the Coyotes finally get their free lunch? Bob Worsley is a moron, along with 4 of the 5 other people on his AZ Senate “Transportation and Technology” committee. More analysis: http://wp.me/p7hU3T-qH

  4. Is the bill restricted to the regular season and playoffs of tier 1 professional sports? Because, don’t forget, there are 15 spring training teams there too – plus an unknown number of minor league and college teams.

  5. Cohen is incorrect. It wasn’t “the previous owner” who chose to go there. The previous owner was the NHL, who took the club over from Jerry Moyes (who placed it into bankruptcy), who ended up owning the club as part of “other deals” with Steve Ellman (at least, this is what he said to the bankruptcy court… that he had, more or less, come to own the club accidentally).

    It was Ellman’s decision in 2001 to accept an offer from the dimwits on Glendale council of a free arena in the west valley that put the NHL onto this track. As I recall, he had a deal more or less in place in Scottsdale for an arena, but that deal would have required him to put up (some) money.

    In came the Glendale city council to, um, save him from that horrible fate.

    So it was at least three owners ago, assuming you don’t want to pin any of this onto Burke and Gluckstern (?), who moved the club to America West in the first place.

    • Very true. Ellman was and still remains a supreme idiot. He had a deal with Scottsdale to build the arena on McDowell/Scottsdale, a prime piece of property minutes from Phoenix, Mesa, and Salt-River Pima. What does Ellman do? He demands Scottsdale foot the entire bill. They told him to kick rocks and made a deal with ASU. Now that area is thriving and Ellman has been long removed from anything significant regarding the Coyotes.

  6. SB 1149, which would provide funds for new Coyotes arena, explained

    http://arizonasports.com/story/1024619/sb-1149-which-would-provide-funds-for-new-coyotes-arena-explained/

    But the best part from the article is:

    “According to the Coyotes, once the arena is built their annual cost to maintain it will be around $24.4 million, which is among the highest for comparable NHL teams.”

    So, that is up $9.4 million from the arena management contract of $15 million a year they had with Glendale.

    Hold onto your wallets!

    • Exactly. Of course, this could all be cover for another attempt to get Glendale (or someone else…) to pay them $18-20m to run GRA under the guise of “saving money” over market rate.

      I don’t expect that to work… but then, would anyone in their right mind have made any of the agreements Glendale has with the NHL or the Coyotes?

  7. Every time I think the politicians of a state, or county, or city have finally wised up to billionaire team owners wanting free public money I am proven wrong. It is so discouraging.

  8. How many times can this team be saved? It almost went to Portland 3-4 years ago. Portland offers more than Phx or Seattle, it currently is a 1 team sports town thus less competition for the sports dollar plus it has a state of the art facility. Portland is a good hockey town from what I read.

  9. Is it wrong for people in Atlanta to take joy-absolute joy- in the fact that the Falcons lost the Super Bowl? Yeah, it was probably the Patriot’s doing, but can we at least hope in some small part that karma played a role?

  10. As sad a sport as hockey is, I have to say that a “hockey crisis” in the middle of a freakin’ desert is a stroke of genius in the stadium cash extortion game… a game I love to play!

    • ‘Course I should have added that such a “crisis” only works when you have a whole buncha pols who are either idiots or bought and paid for. And fortunately that pretty much covers 98% of them.

  11. Taxpayer money: Education funding or new Coyotes arena?
    Why is there a Senate bill to help Coyotes build new arena but no effort to increase educational funding?

    http://www.12news.com/news/local/valley/taxpayer-money-education-funding-or-new-coyotes-arena/408769625

  12. Fits perfectly with Worsley’s bleed the beast mentality: no tax increases for education, roads, bridges, etc.; but it is OK to give away tax dollars to the filthy rich in order to decrease government.

    • True Jerry. But why do voters simply accept this? I’ve heard far too often that “you can’t do anything”… well, that’s certainly true if you don’t try. But if the people who are ultimately paying for these facilities/subsidies were more active in their opposition, I wonder if they would go through?

      Politicians don’t listen to a few angry voices. But they do take notice when hundreds of thousands take to the streets, or start withholding partial tax payments etc.

      • The one’s who vote, agree with him. Voter turnout among the young and Mexican-Americans is low and it is reflected in the makeup of Mesa politicians — white Mormon men with a fetish for rich folk. This is a problem in other parts of AZ too. It is all about registering and then going to vote.

        I suspect this proposal will die as the state is getting hungry for funds and any carve-out will make it worse. Sales taxes are a big part of the AZ budget, so there is no way to avoid that, and property taxes are low, but if you don’t pay, an investor can swoop in and buy up your tax lien and slap a debt with interest on your property and then, after a time, turn you out.

        Worsley is a founder of SkyMall.

  13. A few more articles to digest on Worsley’s shenanigans:

    http://www.scottsdalecitizen.com/2017/02/15/roberts-a-225-million-subsidy-for-coyotes-really/

    http://www.eastvalleytribune.com/local/mesa/state-senator-wife-raising-funds-for-concert-hall-next-to/article_8ed73d5e-d558-11e2-b86d-0019bb2963f4.html

    Also, this article by Representative Anthony Kern on the procedural trick to move the bill between committees:

    https://arizonadailyindependent.com/2017/02/14/kern-warns-of-procedural-tricks-regarding-taxpayer-funded-arena/

  14. This action should be blessed by the good people of this great state,and have a proposition written and lets let the people speak!

  15. Could Hockey Return To Downtown Phoenix? Council OKs Closer Look

    http://kjzz.org/content/437273/could-hockey-return-downtown-phoenix-council-oks-closer-look

Leave a Reply

Your email address will not be published. Required fields are marked *.
NOTE: Personal attacks on other commenters are not allowed in comments, and will be deleted.

HTML tags are not allowed.

712,896 Spambots Blocked by Simple Comments