Suns owner: We want to stay put in renovated NBA-only arena, or else … something

Phoenix Suns owner Robert Sarver said a whole bunch of stuff yesterday to AZcentral:

Suns owner Robert Sarver told azcentral sports Wednesday that it’s “highly unlikely” the Suns will pursue a joint basketball/hockey arena with the Arizona Coyotes…

Sarver said his focus is on an upgrade of Talking Stick Resort Arena.

“This facility was built for basketball,” he said…

Sarver said building a new arena would have “maybe made more sense” four or five years ago when the cost estimate was $450 million to $500 million. The costs now, Sarver said, are “significantly higher.” Thus his focus on upgrading Talking Stick, which soon will be the second-oldest arena in the NBA.

“I think it’s the most economically viable alternative for the city and us,” he said. “I like downtown Phoenix. That’s my first preference. I think the NBA is more of an urban game. That’s our demographic.”

Sarver added that he’d like to say in downtown Phoenix but that, “if we can’t, we’ll explore other options.”

During the news conference Sarver said the Suns “have no choice” but to either modernize Talking Stick Resort Arena or build a new arena.

“Our arena is becoming outdated,” he said. “… We have to have an NBA-quality facility. I know that. The city of Phoenix knows that. Hopefully in the next couple of years we can start construction on something.”

Let’s unpack that: Sarver doesn’t want to build a new arena with the Arizona Coyotes because it’d be too expensive, and also he wants to stay in downtown Phoenix, but if he can’t upgrade his current arena there he’ll have to build a new one elsewhere because they “have no choice.”

That’s a big ball of contradictions, unless you take it as all tactical: Sarver is putting all his cards on a renovation of his current Phoenix arena, and wants to use moving elsewhere as a threat, not an actual option. You’d think he’d at least consider sharing digs with the Coyotes as a way to cut down on competition for concerts and things with another arena, but maybe he doesn’t want to have to partner with a franchise that can’t draw flies, or figures maybe the Coyotes will leave town and he can have a monopoly on the winter sports market, either of which is a reasonable enough gambit.

Sarver still isn’t saying much about how to pay for an arena remodel, just restating the “this place is almost 30 years old, time to send it to the Carrousel” mantra he’s been holding to for the last three years. Either he’s working behind the scenes on a funding plan, or he’s hoping state legislators will do it for him — again, either way, an understandable strategy. But eventually he’s going to have to actually say something concrete, at which point you have to hope Phoenix city officials will say: You said you have no choice but to build an upgraded facility and that you want to stay in Phoenix, so what are you going to do if we don’t give you money for it, hold your breath and turn blue?

Coyotes owner buys out fellow owners, time to pretend this helps build new arena somehow

The Arizona Coyotes‘ mostly silent majority partner, hedge fund manager Andrew Barroway, has bought out the rest of his ownership partners, including the far less silent CEO Anthony LeBlanc, for an undisclosed price. And naturally, somebody thinks that regime change will mean a new life for plans for a new arena:

Sure, okay? KPNX-TV reports that “Phoenix insiders say Suns owner Robert Sarver wants nothing to do with the Coyotes [and] LeBlanc’s departure might change that,” so maybe Barroway is a more personable guy or something, and now arena partnerships will abound! Or at least Barroway will remember to invite his partners to his arena press conference, which would be a start!

The problem remains how to find money to pay for a new arena, when this whole thing started because the Coyotes ownership didn’t want to keep playing in their old new arena unless they were paid a hefty annual fee to do so. Sharing costs between the Suns and Coyotes owners will help some, but then they’ll have to share revenues as well (can’t sell naming rights to a building twice just because two teams play there), so it hardly is a panacea. Maybe it gives some new life to, or at least an excuse for new tweets about, Mayor Greg Stanton’s Rube Goldberg scheme of using tax money to pay for a new arena while pretending not to use tax money to pay for a new arena, but since it’s not like money operates differerently for Barroway than for LeBlanc, I don’t see where this changes much other than the names on the letterhead.

AZ legislators not actually all that stoked about approving $1b-plus in sports subsidies

So it turns out that giving Arizona Coyotes owner Anthony LeBlanc $170 million in state tax breaks to move from one part of the Phoenix area to another and also approving as much as $375 million in tax breaks for any other pro sports team that wanted a new stadium isn’t so popular in the Arizona state legislature after all. Or at least, isn’t quite popular enough to get a majority, probably:

A plan that would provide $225 million in public financing for a new $395 million Arizona Coyotes arena likely does not have the votes to pass the state Senate, key lawmakers told The Arizona Republic/azcentral Thursday.

Sens. Debbie Lesko, R-Peoria, and John Kavanagh, R-Fountain Hills, said they definitely were going to vote against the plan, while Minority Leader Katie Hobbs, D-Phoenix, said there is little support among the chamber’s 13 Democrats. Meanwhile, Senate President Steve Yarbrough, R-Chandler, said he had “serious reservations” about the plan that would allow the National Hockey League team to build an arena in downtown Phoenix or the East Valley.

The utter stupidity of such a plan aside, this points up the political difficulty of getting state support for the subsidy deal: In addition to it becoming a partisan political issue (the sponsor of the bill is a member of the state’s Republican majority), there are regional splits as well, with West Valley legislators of both parties opposing a bill that would likely be used to subsidize a move of the Coyotes out of Glendale, which is in the West Valley. (Peoria is adjacent to Glendale, though Fountain Hills is in the East Valley.) Add in any legislators who are just opposed on the principle that throwing over a billion dollars at your state’s sports teams for no damn reason is a terrible idea — hey, it’s always possible — and the bill is “on life support,” according to the Arizona Republic.

Not that it won’t eventually happen, in some form. (You know how politicians love to haggle.) But it looks like it’s going to take a few more strands of spaghetti thrown at the wall before one of them sticks.

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.

Phoenix mayor explains grooviness of using taxes for Suns-Coyotes arena: It’s cheaper than two arenas!

Phoenix mayor Greg Stanton made his pitch for a new publicly funded arena for the Suns and Coyotes yesterday, and he didn’t provide much more specifics than when he leaked it the day before: He will use tax money, but he won’t raise taxes to pay for it, and he’s for it because he thinks it will bring more spending to downtown Phoenix.

“I as mayor will do everything I can to pursue a course that makes a new facility home to the Suns, the (Phoenix) Mercury and the Coyotes,” Stanton said, noting the WNBA franchise as well. “Building two new sports arenas in our region simply doesn’t make fiscal or common sense.”

He’s right there, as far as it goes: One arena is definitely cheaper than two, albeit a lot more expensive than zero. So does building one new sports arena make fiscal or common sense for Phoenix?

Stanton’s funding plan, based on what little he’s revealed about it, would be a bit of a Rube Goldberg scheme, avoiding new taxes by siphoning every last bit of value out of existing ones. Currently, Phoenix levies hotel and car rental taxes and uses the proceeds to pay off a bunch of past construction projects, including the Suns’ existing arena (opened in 1992), a Sheraton hotel, and other buildings. (Note: This is separate from the county hotel and car rental taxes that pay off the Arizona Cardinals stadium and which were partly ruled unconstitutional in 2014.) The current arena will be paid off in 2022, however, and the hotel plus a downtown biotech building are in the process of being sold off, which would free up those tax revenues to be used for something else.

Great, free money, right? Not exactly. First off, the “something else” could be pretty much anything — in the most extreme example, the city could just cancel the hotel and car rental taxes once the existing arena is paid off, and either leave taxes low as an inducement to visitors or levy new ones to fund other needs. And on top of that, selling the Sheraton to get out from under its debt load isn’t without a cost: The buyer is effectively getting the building for free by paying off $300 million in remaining debt, and the city will lose any future profits it would be getting from the hotel. (The Sheraton currently loses money, but that’s partly because any revenue it brings in goes right back out to help pay off its construction debt.)

In short, then, Stanton is saying that the city’s decision in 1990 to build a new arena for the Suns is an open-ended commitment to keep on building new arenas for the Suns into eternity, while selling off any city assets necessary to make that possible. That’s a legitimate political position, I suppose, but you can see why he chose not to frame it that way. Or to put a price tag on it. Because people are cranky enough about it already.

Phoenix mayor to announce again just how groovy a new Suns-Coyotes arena would be

If there was any doubt about Phoenix Mayor Greg Stanton really wanting to build a new arena for the Suns and Coyotes after the last time he said his city needed one to keep its teams (and also, weirdly, to get the Harlem Globetrotters to appear), it should be dispelled once Stanton gives a speech today about doing just that:

According to sources who have reviewed the mayor’s planned remarks, Stanton will outline his vision for building a new taxpayer-funded arena during his fifth State of the City speech. The mayor is scheduled to speak before a crowd of hundreds of business and political leaders at the Sheraton Grand Phoenix hotel in downtown about noon.

Stanton will use his most visible stage of the year to make it clear that he prefers the arena be a joint-use facility shared by the National Basketball Association and National Hockey League teams, those sources said.

The Arizona Republic’s sources didn’t specify how Stanton would begin to pay for this, though they did indicate that the mayor would promise not to raise taxes to do it. Using existing taxes, such as the hotel and car rental tax that is currently paying off the Suns’ current arena, is another story — as, presumably, would be asking for state sales tax kickbacks to pay for arena construction.

As to whether this will be Coyotes CEO Anthony LeBlanc’s promised arena announcement to come by the end of the month, that’s anybody’s guess, though it sure sounds like he’s still trying to see who’ll provide the most lucrative bid:

At the same event, LeBlanc told The Republic that the deal would have to allow for equally shared revenues, in which each team would keep the revenue they generated and that both franchises would share non-event revenues, such as naming rights and advertising. The Suns currently have control over revenue at Talking Stick Arena.

“The Coyotes have had multiple conversations with the city of Phoenix and we continue to have detailed discussions,” LeBlanc said in an earlier statement. “However, as we’ve consistently stated, we also continue to have discussions with other Valley locations. It would be premature at this point to indicate a selection has been finalized.”

LeBlanc also trotted out the standard talking points from the new-arena playbook to practice them on the assembled pols:

The trick for the Coyotes, of course, is to come up with an arena plan that isn’t just lucrative, but is more lucrative than the deal in Glendale where they were getting a mostly free arena plus more than $6 million a year in operating subsidies to boot. It’s possible, just maybe, if taxpayers handle the construction costs and there are enough new revenues to split with the Suns, that it could work out to the Coyotes’ benefit. But you can see why they’re busily playing three different sites off against each other to get the best deal — when “we need a new arena and for somebody to cover all our operating losses because nobody comes to our games because we’re a hockey team in the freaking desert” is the agenda, you need all the leverage you can get.

So I wouldn’t expect a Coyotes announcement in the next two weeks, really, not when there’s still more hardball to be played. Talking about it incessantly to get people all excited about where an arena will go instead of why the Phoenix area should be building its third arena in 25 years, though? That’ll definitely happen.

Phoenix mayor says city needs “cutting-edge” arena for “concerts, Harlem Globetrotters”

Phoenix mayor Greg Stanton says replacing the Phoenix Suns‘ 25-year-old arena is a priority for his city, because, um, because:

“I know when people think about arenas, they always think about, ‘Well, that’s for the professional sports teams.’ Talking Stick Resort Arena in downtown Phoenix is used almost 200 nights per year.  The vast majority time it’s not for a sporting event — it’s for concerts, it’s for the Harlem Globetrotters when they come to town, it would be for the circus, it would be for ice skating and the skating events…

“You need a cutting-edge, competitive building to host all of sorts of events, including sporting events.”

(By the way, if you want to see just how badly another reporter can misquote a radio interview, compare my transcription above to the terrible one on KTAR News’ site.)

And a new arena would be more “competitive” because what now? Yes, the Suns arena isn’t sized right for hockey (“We won’t make that mistake twice for an arena in downtown Phoenix,” said Stanton), but what could possibly be $500 million in likely construction costs better about a new arena than a not-quite-new one? Especially if the old one is already in use 200 nights a year, so clearly concerts aren’t steering clear of it?

“I’m not just the mayor of the city of Phoenix, I’m a leader in this community. It’s important we don’t lose our major assets to Las Vegas or Canadian cities that would happily snap up the Coyotes or any of our major assets.”

OH MY GOD THE SUNS ARE MOVING TO HALIFAX YOU GUYS!

Stanton did promise “a very intense discussion” and that any arena plan would go before the voters, so clearly he knows this is going to be a long battle, even if he didn’t actually breathe the word “dollars” during his interview. But this is how it begins, not with a bang, but with a torrent of radio word salad.

Suns owner may demand new arena, because all the other kids have one

Every once in a while one of my readers, out of concern that some day I might get my life back, wonders whether this site will soon run out of business once every sports team owner has a new stadium. To which I say: Don’t worry, my friends, Phoenix Suns owner Robert Sarver has my back.

One scenario being talked about — at least in real estate and downtown Phoenix circles — is a new arena being built where the current South Building of the Phoenix Convention Center is on Jefferson and Third streets. That is the oldest convention center building and is a block away from the Suns’ current arena.

US Airways Center — which is being renamed Talking Stick Resort Arena — opened in 1992.

It will soon be the fifth oldest NBA arena after new homes are built for the Golden State Warriors, Milwaukee Bucks and Sacramento Kings.

Sarver actually dropped some hints about this last fall, but it sounds like things have now moved from the “whining about it” stage to the “talking to local business and political leaders about money” stage, so it’s likely things are going to heat up soon.

Note that there’s no talk here of the Suns’ current arena being obsolete or anything — just it’s older than all the other ones, can’t we have a new one too? That’s one of the great things about the stadium and arena game: No matter how many new buildings get built, there’s always another owner waiting to circle around and get back in line. If this latest is any indication, expect the next demands to come from the likes of the Toronto Blue Jays, Jacksonville Jaguars, Detroit Pistons, San Jose Sharks, and Anaheim Ducks. Check back in a year or so to see how this prognostication turned out.

Phoenix’s convention center subsidies may limit ability to provide Suns arena subsidies

Arizona Republic columnist Robert Robb has weighed in on Phoenix’s big investment for both a massive convention center expansion and a city-owned (that’s right, city-owned) hotel, following a Republic story that the 1,000-room Sheraton has lost $28 million since 2008. Noting that Phoenix city officials had assured that the city-owned hotel “would pay for its operations and servicing the debt to build it. No sweat,” Robb reports that the hotel’s ongoing losses, paid back from the city’s Sports Facilities Taxes, may now affect the city’s ability to refurbish or expand the Suns’ basketball arena.

The big Sheraton has been a fiscal disaster — last year’s occupancy rate came to an impressive 51.2% — because the convention center has genuinely flopped. Consultants from Ernst & Young and later HVS had forecast that the hotel would be humming along at 69% occupancy, based on the assumption that the bigger convention center would draw 375,000 convention delegates a year. Last year, the center actually saw 118,332. Oops.

Phoenix Suns owner says “we have to get a new arena built,” because old one is from 1992, already

And I guess that’s about it for this morning … wait, what?!?

“We’re definitely going to have to get a new arena built,” [Phoenix Suns owner Robert] Sarver said. “Our lease runs for another eight years maybe. Between us and the city, we’ve done a good job maintaining it despite its age but it’s starting to run out of gas. It’s like a house. It gets to be 30 years old and then you’ve got a lot of work to do. You can remodel or build a new house.”

You know, when people started asking me, about ten years ago, whether the new stadium game was going to soon run its course, because every team would already have a new building, and I said, “Nah, then the first teams that got new venues will just circle around and get back on line,” I thought I was joking, at least a little bit. But the way things are going — the Suns’ current arena opened in 1992, if you’re counting — it seems like every sports owner in the country is treating 30 years as the maximum shelf life before they can demand a new building, except for those that are using an even shorter timeline.

For reference, teams whose stadiums will turn 30 over the next eight years include the Miami Dolphins, Toronto Blue Jays, Chicago White Sox, Baltimore OriolesMilwaukee BucksDetroit PistonsMinnesota Timberwolves, and Utah Jazz, with the Anaheim Ducks and San Jose Sharks coming up right on their heels. The Dolphins are already renovating their stadium with public help, while the Bucks are angling for a whole new building; anyone care to guess which of the others on this list will be next to hop back on line?