Coyotes get developers to drop opposition to tax-kickback plan by promising not to do it again

An Arizona commercial real estate group has dropped its opposition to the Arizona Coyotes‘ demand for $200 million in tax kickbacks for a new arena because, apparently, the team is promising not to do it more than once:

“We were initially opposed,” [NAIOP Arizona president Tim] Lawless said.

But now the group is neutral.

That comes after meetings with Coyotes President, CEO and co-owner Anthony LeBlanc and assurances an arena tax district would not be applied to other projects and sports developments.

I guess technically this means that LeBlanc gave the commercial real estate developers assurances that any authorizing legislation would be narrowly written to just give him a giant whopping tax break, and not all sports team owners, which would have potentially drained an even large share of funds from the state treasury and left existing real estate owners holding more of the bag. That’s not likely to make the owners of the Diamondbacks and Suns happy if they’re hoping to ask for tax kickbacks for their own projects, but LeBlanc can worry about fighting with them later.

Anyway, none of this immediately changes the fact that top state officials sound cool to the LeBlanc plan, and supposed partners Arizona State University still haven’t actually signed on, and so on. But getting one less semi-powerful group hating on him has to be seen as progress of a sort for LeBlanc, anyway.

Top Arizona officials not really into this whole “give Coyotes another $200m in tax money” thing

Let’s check in on how the Arizona Coyotes owners’ proposal for a $400 million Tempe arena, half paid for by tax kickbacks, is going over with the state officials who’d need to approve it:

“I’m a big fan of the Coyotes but I haven’t heard anything about that,” Gov. Ducey told Welch.

“They’ve not talked to you?” Welch asked the governor, who replied, “No.”

Mmhm. Anyone else?

The newly-elected speaker of the House and a senior lawmaker who formerly chaired the House Appropriations Committee said they would be resistant to a TIF or a tax rebate.

“We care about the Coyotes, we also care about the taxpayers of the state,” said Speaker-elect J.D. Mesnard, R-Chandler.

Sen. John Kavanagh, R-Fountain Hills, the former chair of the House Appropriations Committee, said there just isn’t enough money to go around, especially at a time when the public is calling for more money for education.

“They’re not asking for a tax rebate, they’re asking for us to go into a budget deficit or to take on debt to build their private stadium,” Kavanagh said.

I’m going to go out on a limb and classify this as “not well.” While it’s still early and there’s obviously much haggling to go, perhaps this whole “announce an arena plan without telling anyone about it in advance, including the state university that you’re supposed to be partnering with” thing wasn’t the best idea. Though maybe the Coyotes owners are just really committed to transparency and not negotiating behind closed doors, in which case, kudos to them!

Coyotes arena plan continues to look less like a plan than like a way to get media attention

Recent developments in the Arizona Coyotes‘ Tempe arena plan kerfuffle, as I was making my way back yesterday from talking to folks at UConn about stadiums and development and journalism and other matters:

  • The Coyotes, as noted previously, would build the Tempe arena on property controlled by Arizona State University, which would get to use the pro team’s attached 4,000-seat practice facility for its own hockey games. (Don’t click on the link unless you really have to, it launches an awful autoplay ad with audio.) But hockey games only — ASU would still be renovating its own 12,000-seat arena for other sports, leaving the Phoenix area with these two arenas, plus the Suns‘ existing Phoenix arena and maybe the new one that they want to build, plus the Coyotes’ old arena in Glendale, and … you know, one of the things I did in Connecticut was a attend a class that was talking about reducing the environmental impact of new sports venues — you think maybe not building a different one for each and every sports team in a metro area would be a start?
  • Speaking of Glendale, that city just settled a longstanding lawsuit by the Cardinals over the city’s previous promise to build more parking spaces by agreeing to pay $17 million, instead of the $36 million the team was demanding. So that’s either a $19 million savings, or another $17 million down the drain of the old Glendale administration’s money-losing sports spending spree, depending how you want to count.
  • Laurie Roberts of the Arizona Republic wrote a good column (no autoplay ads on this one, yay!) laying out how stupid and awful this whole mess is. Sample: “For a brief shining moment on Monday, I actually thought that the Coyotes honchos had figured out there was a reason why their proposal to high-jack tax revenues to build yet another hockey arena was DOA at the Legislature last spring. Boy, was I ever wrong.”

Roberts also noted that no actual city or state elected officials or ASU administrators were on hand for Monday’s press conference, which is looking more and more like an attempt at jump-starting momentum for this arena project than an actual announcement of anything. And I’ve now written about it four times this week already, so apparently it’s working!

Coyotes owner demands $200m in tax kickbacks for arena, says this isn’t asking for government money

So apparently Arizona Coyotes owner Anthony LeBlanc did say something about how he planned to pay for a new hockey arena in Tempe yesterday. And it was: Give us great gobs of tax money.

The Arizona Coyotes will ask the state Legislature to divert up to $200 million in tax dollars to help pay for the team’s planned $400 million arena in Tempe, Coyotes executives said at a news conference Monday.

The team would contribute the other $200 million to a project that “pays for itself,” said Anthony LeBlanc, the Coyotes’ chief executive officer.

“There’s no question that we’re going to have some form of public-private partnership to make this work,” LeBlanc told reporters.

“That is a very typical model. We are not going in and asking for government to build us an arena.”

The state money would come in the form of rebates to the team on sales tax and other tax revenue generated by the arena.

Well, yes, actually you are asking for government to build you an arena — or to build you half an arena, anyway. There’s a longstanding gambit among sports team owners to consider “tax rebates” as different from straight-up cash, but this is nonsense: Money is money, and if I’m running a business, it doesn’t matter to me whether I get it in the form of a check to the construction company or as a check from the state tax agency that I can then use to pay the construction company. (There’s a reason the term “tax expenditures” exists.)

While “sales tax and other tax revenue generated by the arena” is a bit vague, it seems clear that what LeBlanc is talking about here is tax increment financing, or a TIF; or, really, a STIF in this case, since it would kick back sales taxes from money spent at the arena (and maybe team employee income taxes, too?) instead of the more typical property taxes. I’ve gone on about TIFs before and how they cannibalize money that would otherwise go to the public treasury — Good Jobs First has an excellent primer on them as well — but suffice to say that when you’re talking about state money, they’re especially ludicrous, since there’s no way that the state of Arizona will bring in significantly more sales tax revenue just because the Coyotes move from Glendale to Tempe.

Anyway, this appears to be the opening salvo in LeBlanc reopening the TIF discussion that he started last spring. There’s no reason to assume that this will be the final subsidy figure he arrives at — there’s still the matter of operating and maintenance costs to be decided on, and remember Judith Grant Long‘s figure that the average stadium costs taxpayers 40% more than the announced subsidy figure. But at least we know his initial ransom demands, even if we don’t know what he’s willing to settle for.

Coyotes don’t really have an arena deal in place, everybody stand down

Well, that was yet another Arizona Coyotes anticlimax:

The Coyotes and Arizona State University announced that the Coyotes have entered into an exclusive negotiation agreement with Catellus Development Corp., ASU’s athletic facilities district developer, to work towards the finalization of a new arena and commercial development project within the 330-acre district along Tempe Town Lake. The team would have until June 30, 2017 to review the land and get the political, development, architectural and financial plans required to build it in order.

In other words, Coyotes owner Anthony LeBlanc still has no idea who’s going to pay for a new arena. He does know where he wants to build it — Tempe, not Scottsdale — only four months after saying he knew where he wanted to build it, and has agreed to exclusively talk to that city about building there, at least until he doesn’t.

As for the actual money, here’s what LeBlanc had to say today:

“There will be several tranches of money that will be utilized to build the arena of which the Coyotes will be the largest tranche,” he said. “The Coyotes will be the lead investor in this facility and ASU also has a financial commitment toward the project.

“We’re not looking for general funds from any governmental organization, but we need to form a very strong partnership with the State of Arizona and the City of Tempe. We also have to work with a variety of stakeholder groups such as Goldwater Institute and others so they understand what it is we’re trying to do. These projects have a process.”

Ignore the fancy language like “tranche” and you have: We’re going to put in some money, Arizona State University is going to put in some money, and the city and state will put in some money, but we have to run all this up the flagpole and see who salutes, so go away for now and don’t bother us.

There was talk back in the spring of LeBlanc asking for massive sales tax kickbacks to help fund an arena and surrounding development, but he’s maintained radio silence on this and all other funding questions since then. So, either he’s biding his time and working behind the scenes for subsidies, or he has a secret plan to pay for an arena out of his own pocket but doesn’t want to spoil the surprise. You make the call which seems more likely.

Coyotes schedule East Valley arena announcement for 1 pm ET, no further details available

I have to get on a train in a few hours to go talk in Connecticut tomorrow, so I really don’t have time for this breaking news:

After years of looking for a new home in the desert the Arizona Coyotes will announce Monday afternoon they have completed a deal for a new arena in the East Valley area south and east of Phoenix and Scottsdale that includes Tempe and Mesa, sources close to the deal told ESPN.com Monday.

Further details of a new 16,000-plus seat arena that is expected to be ready for the start of the 2019-20 National Hockey League season will be revealed at a news conference set for 1 p.m. EST.

“The East Valley area south and east of Phoenix and Scottsdale” sounds like it’s not this plan, which is sort of in Scottsdale, though it’s also just barely south and east of Scottsdale, so maybe? Either way, as of just a couple of weeks ago nobody had any idea how to actually pay for that plan yet, so one hopes that somebody at that news conference will ask tough questions about where the money will come from.

I’ll try to post a followup once details are available, though I may be hampered if there’s no WiFi on the train. If necessary, feel free to post updates in comments, and I’ll join back in when I can.

Scottsdale arena funding plan still up in air, Coyotes to cool their heels a few more months

Back in June, Arizona Coyotes owner Anthony LeBlanc met his self-imposed deadline to announce a new arena site by the time of the NHL draft by saying he had chosen a site, but he wasn’t going to tell anyone where it was just yet. Four months later, with LeBlanc’s mystery site still a mystery but the owner again promising more news “soon,” there’s new news, sort of, on one of his rumored favorite sites:

Private developers, in cooperation with the Salt River Pima-Maricopa Indian Community are exploring the idea of building a 20,000-seat multi-purpose event center south of the Scottsdale Pavilions and west of the 101 Freeway that they say could potentially house the Arizona Coyotes or Phoenix Suns, multiple sources told Arizona Sports this week.

One source termed the project “an examination, with nothing concrete set yet,” admitting that an anchor tenant like the Coyotes or Suns would help.

“At this point we are determining whether or not it can be paid off with debt financing,” the source said. “We’re looking at the feasibility of filling it up with event nights. Obviously, a permanent tenant would be helpful, but we have been examining the option even without a permanent tenant.”

In other words: There are people looking into building an arena in Scottsdale, but they haven’t figured out how to pay for it yet. That’s a long way from “soon” — the Arizona Sports source said no decision is expected for another few months — and a pretty big hurdle to clear, even if there’s a mixed-use “sports village” to go along with the arena. And while a source indicated that “we are not asking for any cash” from the public, there’s a long history of developers not counting things like tax breaks, free land, highway improvements, etc., as “cash,” so I wouldn’t necessarily take this person at their word, especially given that they wouldn’t even put their name on the record. (Which goes against the Society of Professional Journalists’ second rule for allowing sources anonymity, if Arizona Sports cares about such things as journalistic ethics.)

Reading between the lines here, it looks pretty certain that LeBlanc has had his eye on the Salt River land all along, but has been waiting out the developers deciding on whether they can actually afford to build a project there without subsidies, or failing that, how to ask for subsidies that don’t look like subsidies. This latest report, if true, would indicate that nothing is going to be decided along those lines until well into 2017, if then, which should make it fun to watch LeBlanc try to redefine the word “soon.”

Three weeks after promised arena announcement, Coyotes owner still hasn’t revealed site

It’s now been three weeks since Arizona Coyotes owner Anthony LeBlanc’s promised announcement of a new arena site for his team, which he met by saying he had one but he wasn’t going to tell anyone where it was yet. Supposedly he was going to tell us all about it once a “real estate agreement” had been worked out, but either the lawyers are still haggling or he was blowing smoke, because there hasn’t been a peep since. Look, here’s an Arena Digest report all about how there’s no news to report!

Tune in next Thursday to see if LeBlanc is still twiddling his thumbs on this. What, you had something better to do this summer?

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.