Coyotes owner announces planned arena site, won’t tell you where it is

Arizona Coyotes owner Anthony LeBlanc made his long-awaited announcement yesterday about new arena plans, and it’s that: He’s picked a site, but he’s not saying where it is. Seriously:

Coyotes president and CEO Anthony LeBlanc said Thursday afternoon that the team has chosen a site for its new arena and is working through the legal documentation of the real estate agreement.

LeBlanc declined to provide any other details, or name the site.

This is officially the weakest non-announcement ever, especially since there’s no way even to know if he’s telling the truth about having settled on a site. (I suppose the people he’s working out the real estate agreement with know, but if he later switches to another site before revealing what it is, how will anyone on the outside tell?) Technically, it’s an announcement in advance of tonight’s NHL draft, which is what LeBlanc promised, but it’s still not much more than waving a piece of paper in the air and claiming it has specifics on it.

It’s still pretty likely that the report from earlier this week is correct and LeBlanc is aiming for a site in Scottsdale that’s part of the Salt River Pima Indian Reservation, but it’s also possible that he isn’t, or that he is but he’ll change his mind later if a better offer comes along. I’ve been saying for a while that LeBlanc’s best leverage here is to get a bidding war going among various Phoenix-area governments, and it sure looks like he’s trying to drag that war out as long as possible.

Coyotes owner may be settling on Scottsdale arena site, who’ll pay for it still TBD

The Arizona Coyotes owners may finally be close to deciding where to try to build a new arena, if not how to pay for it:

The site is on privately-held tribal land at the northeast corner of the Loop 101 and 202, at McKellips and McClintock. It was home to the Scottsdale 6 drive-in for more than 30 years…

An announcement connected to the site could come on Thursday, I’ve been told. The arena would be part of a larger project at the site.

That’s from Brahm Resnik of KPNX, who doesn’t cite his source, though with the NHL draft starting this Friday and Coyotes owner Anthony LeBlanc having said he’ll have an announcement before then, it’s a fair bet he’ll announce something on Thursday, even if it’s only a front-runner in the arena site competition.

The site described is this one, which is actually in Scottsdale, and as you can see from Google Maps is currently a big ol’ pile of nothing. There’s certainly plenty of room for a “larger project” there, but that won’t necessarily help pay the bills for a pricey arena, especially when LeBlanc’s bottom line is he wants to be paid to play anywhere. I’ll be absolutely stunned if there’s no public subsidy demand attached to this, either in cash or tax kickbacks or both, though I won’t be at all surprised if that bit isn’t revealed this week, since “announce where to put it first, explain how to pay for it later” is tried-and-true sports owner strategy.

Coyotes to Glendale: If we can’t run arena, we’ll take our puck and go … somewhere

Arizona Coyotes owner Anthony LeBlanc had already made pretty clear that he doesn’t want to keep the team in its current arena in Glendale without its prior sweetheart management deal, but he hammered in home yesterday by sending an open letter to city manager Kevin Phelps declaring that they’re outtie as soon as they can figure out a place to be outtie to:

Simply put, the Arizona Coyotes have every intention of leaving Glendale as soon as practicable. … By unilaterally breaking a 15-year signed management agreement with the team — a contract the Coyotes would have honored for the length of its term — the Council effectively evicted us from our home. While you claim that the Council has had a change of heart, we have not. As a business responsible for hundreds of employees, and a team, that relies on the support of hundreds of thousands of fans statewide, we simply cannot afford to do business with partners who do not keep their word, or honor their contracts.

Boom! Burn those bridges, Anthony! Except, of course, that the Coyotes don’t actually have another place to go to, so unless they’re going to relocate to the Suns‘ old arena or move in with their friend Oscar, they have to stay in Glendale for the time being, hence that “as soon as practicable” line in LeBlanc’s letter.

Local news coverage had this as LeBlanc declaring that he wouldn’t engage in lease talks with AEG, the arena management giant that recently won the rights to operate the Glendale arena, but realistically he’s going to have to talk to them at some point, since right now the team doesn’t have anywhere to play starting in September 2017, and nobody’s going to build them a new arena by then. LeBlanc keeps saying that he’s going to have an arena announcement real soon now, and maybe that will include a new temporary home, for all we know. If not, he’s painting himself into a potentially ugly corner, but we’ll just have to wait and see.

Glendale council okays AEG arena management deal, hopes this one won’t suck quite as badly

The Glendale city council gave its blessing to the AEG management deal for the Arizona Coyotes‘ arena last night:

The Glendale City Council voted unanimously Tuesday night to approve a $28 million deal with the Los Angeles-bases AEG Facilities to operate the Gila River Arena.

The new deal is an effort to keep the Coyotes in Glendale beyond the 2016-2017 season.

Okay, none of that is exactly right, 12News: Whereas normally a “$28 million deal” means you get paid $28 million, here Glendale will be paying AEG $28 million over five years. Plus it’s not really an effort to keep the Coyotes in Glendale so much as an effort to reduce the fiscal bleeding that was put in place by the Coyotes’ 2013 sweetheart lease for the arena, now canceled. Plus you misspelled “based.”

As discussed here yesterday, the new lease is about $2-3 million a year cheaper for Glendale than the old Coyotes one, though it’s about on par with the temporary management contract the Coyotes signed last summer to tide everyone over until the open bidding was complete. (The Coyotes owners decided not to submit a bid, because screw that competitive-bidding crap.) AEG can renegotiate the lease if the Coyotes move, or opt out of it entirely if the two sides then can’t agree on new terms.

In all, it’s best to look at this as a compromise between putting up with the original Coyotes deal and shutting down the arena entirely: The hockey team is still there for the immediate future, after all, and AEG is really good at booking concerts, so maybe they can make a go of it. If it works out, Glendale saves itself maybe $10 million or so, and ends up with a slightly more viable arena, with or without hockey; if it doesn’t work out, the arena probably still shuts down, but Glendale still saves the $10 million. Unless some future council gets suckered into renegotiating a worse deal just because “we spent all this money on an arena, we don’t want to waste it,” but hopefully by now everyone in Glendale has learned the hard lessons about sunk costs.

Glendale’s new arena lease to require shoveling less money at AEG than city was shoveling at Coyotes

Glendale’s proposed arena lease with AEG is finally out, and ready for the city council to vote on! So who’s paying what to whom?

The city would pay AEG $5.6 million a year; one payment of $2.8 million, then two more payments of $1.4 million each.  The contract is for an initial period of five years with the possibility to renew for five additional years.

Glendale had been paying the Arizona Coyotes between $6.5 million and $8.7 million a year to run the place (the total varied depending on arena revenues), so looks like Glendale saved itself between $900,000 and $3.1 million a year by opening up the arena management contract to competitive bidding. [EDIT: A commenter notes that the city is also giving up about $900,000 a year in naming-rights and Coyotes rent revenues to AEG, so this deal is pretty much a wash with the Coyotes’ current revised stopgap lease, though still a good bit better than the long-term one that Glendale decided to terminate last spring.] Two cheers, Glendale! (The third cheer would have been if the city had included “run the arena ourselves” or “shut the damn place down instead of throwing good money after bad” as potential options, but I suppose those are still possibilities as they consider the AEG offer.)

The full proposed management contract is here; for those wondering what it says about the Coyotes, it hands over to AEG the right and responsibility to “negotiate, enter into, administer, amend and terminate all contracts relating to the use of Arena facilities and services, including the Coyotes Lease,” i.e., “you guys work it out now.” Though there’s also a clause at the very end that AEG can renegotiate the deal (or cancel it if the two sides can’t come to a new agreement) if the Coyotes were to stop playing games in Glendale, which could end up dragging the council back into negotiations if Coyotes owner Anthony LeBlanc gets serious about any of the umpteen arena plans in other towns that he’s pursuing.

All in all, the proposed AEG lease is not as awful as the old Coyotes one, but it’s not great, either — the result you’d expect after spending public money to build an arena that no one really needs for a hockey team that no one really follows and then deciding that it’s too big to fail as a way to get people to shop at the neighboring mall. I still like the idea of taking $5.6 million a year in small bills and having city staffers stand in the mall and hand them out to shoppers, but I know it’s tough for elected officials to think outside the box that way.

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.

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.

Coyotes owner predicts arena announcement “in next couple of weeks,” keeps straight face

Arizona Coyotes CEO Anthony LeBlanc now says that an announcement on a proposed new arena site, which he’d previously indicated could come in May or June, may happen as soon as later this month, maybe:

“I know people feel that I’m kind of nuts on this one,” LeBlanc said at a news conference where he announced the firing of General Manager Don Maloney. “The reality is we do anticipate there will be an announcement on this front in the next couple of weeks.”

Given that all indications are that arena discussions are hitting all sorts of snags — a Phoenix city source told KPNX-TV that the team’s unwillingness to open its books to negotiators “makes it nearly impossible to engage in serious negotiations for a new dual-purpose arena,” while proposals for a tax-increment financing district to kick back sales taxes to the team are stalled in the state legislature, at least for the moment — that timetable does seem kind of nuts, but who knows, maybe talks with one particular prospective host are going really well? We have not much to go on at this point but LeBlanc’s public statements, and since he seems to be following the time-honored approach of changing your numbers every time and giving the media something new to report on, expect a moving target for the foreseeable future.

Coyotes CEO says arena announcement due by May, or June, or sometime

More rumors of the Arizona Coyotes‘ arena plans, this time courtesy of team CEO Anthony LeBlanc while speaking to fans on Saturday:

  • He still expects to make an arena announcement in the next six weeks, but it might be June.
  • On the possibility of staying put in Glendale: “I will never say never, but it’s highly, highly unlikely.”
  • Playing temporarily at LeBlanc called the possibility of playing temporarily at Veterans Memorial Coliseum, where the Suns played until 1992, is “a long shot.”

Apparently either no fans asked LeBlanc about specific locations or whether he’ll be demanding sales-tax kickbacks, or he chose not to answer. This is all part of the standard “get people talking about where the new arena will go, not whether there should be one” campaign, so expect more of this in the next six weeks, or until June, or whenever.