When Arizona Coyotes execs wanted to argue that a new Tempe arena would generate hundreds of millions of dollars in new taxes for the city, they hired consultants Conventions, Sports & Leisure International, who can reliably be counted on to come up with eye-popping numbers, even if they often turn out to be based on things like not understanding the difference between U.S. and Canadian dollars. Now the Grand Canyon Institute, which calls itself “Arizona’s centrist think tank,” has done a more independent analysis of the numbers using actual math, and has determined that, as the Arizona Republic puts it, “The $154 million in new tax revenue that the Coyotes forecasted ‘entirely disappears’ when Wells corrects what he contends are inaccuracies in the team’s earlier analysis.”
The changes included applying certain inflation adjustments and tweaking tax rates that GCI identified as being incorrect. After those adjustments were made, the report found Tempe would ultimately lose $7 million in potential tax revenue over the next 30 years.
Projecting $154 million in new tax revenue when it would actually be a $7 million loss is quite the math error, and is worth diving into the report’s technical appendix to see WTF exactly CSL did here. It gets a bit, uh, technical, but the main points are: CSL applied an economic multiplier (for how money gets respent more than once in a geographic area) for the entire Phoenix metro area and applied it as if it were only for Tempe; failed to account for $47 million in lost taxes that would have gone to the city treasury if locals spent their money elsewhere in Tempe, but which would now be siphoned off to help pay for the arena; and used the wrong multiplier for hotel spending. Here’s a nifty, if wonky, chart:
The upshot: “When these changes are made the project instead of having a gain in nominal dollars of $136 million comes out as a negative $7 million.”
But that’s not all! The GCI study also found that projections of an arena hosting 45 non-hockey events a year “may be optimistic” and would likely cannibalize concerts from Phoenix’s and Glendale’s arenas — which admittedly doesn’t hurt Tempe, but it would mean the overall Phoenix area would be largely just shuffling around the same spending while taking on a half-billion dollars in arena expenses. And it projected that Tempe would do slightly better, tax-wise, by building the same mixed-use project the Coyotes have planned for around the arena, but no arena itself.
Coyotes attorney Nick Wood responded to the report by calling it “silly,” while team CEO Xavier Gutierrez declared, “we feel incredibly confident in [CSL’s] analysis,” though the Republic doesn’t indicate if he did so while keeping a straight face.
While it’s probably a bit much to hope for this to shift the arena debate beyond a boilerplate “experts disagree on the economic impact,” the timing really couldn’t be worse for Coyotes owner Alex Meruelo, what with early voting starting tomorrow for the May 16 vote on approving the arena. Early polling shows … hmm, no early polling? That’s fine, polls are garbage anyway, we’ll just have to wait till May 16 to find out whose argument wins the day, the team of actual economists or the clown car full of paid consultants whose record of having to walk back their predictions is now nearing a perfect 100%.
With Old Town Scottsdale, Mesa Riverview, Tempe Marketplace and Mill Avenue all in close proximity, all this can do is shift spending around. Tempe would gain far more revenue by getting the homeless off the sidewalk along Mill Avenue and the gang bangers out of Arizona Mills. As for the hockey arena, whether it’s 27 years or 2,700 years, hockey has never been a net revenue producer in the Sonoran Desert.
As for being bad news for the invisible man, Meaningless Meruelo, he turned off his invisibility device and was all smiles foe a photo op around Tempe over the weekend. Meanwhile the real Coyotes owner showed up in Tempe last week and desperately raced from microphone to microphone begging Tempe voters to approve the Coyotes development. The giveaway as to who the real owner is that the real owner kept repeating “I’m not going to tip my hand as to what I’ll do if these props fail, that could be taken as a threat, I wouldn’t do that.’ No mention of what Alex Meruelo will do. Based on Richard Burke’s tenure with the Coyotes, and Steve Ellman, Jerry Moyes, Jerry Reinsdorf, Anthony LeBlanc, Matthew Hulsizer, Greg Jamison and Andrew Barroway, it’s time for Alex Meruelo to permanently dissappear from the Coyotes. Although not as permanently as George Gosbee.
That’s my new go to:
Instead of “It wasn’t me!”
Now it’s “Oh, That’s silly!”
Today is the day for the Tempe Entertainment District debate between the TempeWins and Tempe1st groups.
You can submit your questions now to have them considered for this debate.
Email questions to:
TED@tempe.gov
-or-
tseely@arizonarepublic.com
Forgot to add, that you can watch the debate – live – on Tempe’s website.
It will be from 6:00 p.m. to 7:00 p.m. Arizona (i.e., Pacific) time.
https://tempe.granicus.com/MediaPlayer.php?publish_id=5
Those organization names seem a bit Judean People’s Front/People’s Front of Judea. Which one is on which side?
Tempe1st opposes the TED.
TempeWins is for the arena.
The existing Glendale arena will have an advantage when booking those other acts because it doesn’t have a hockey team hogging 45 to 50 prime dates.
Excellent point!
It also doesn’t have airplane engines screaming overhead…. what, they are trying to recreate that special Shea Stadium atmosphere???
The airplane noise might be exaggerated. Allstate Arena (Rosemont) sits at the end of one of O’Hare’s runways. Occasionally you feel the rumble, but a good rock and roll sound system easily overcomes it.
The Rosemont Horizon was built with a wood roof to muffle the airplane noise. Unfortunately the roof collapsed killing 5 workers. Planes landing 400 feet overhead cause a variety of complications.
You’ve obviously never been to Glendale or the aging arena.
I have. And the aging Glendale arena is newer than 18 current NHL arenas.
It’s the nicest hockey arena I’ve been to, and I’ve seen a few. But hey, it’s time to trade in the car since the ashtray’s full.
Remember when cars had ashtrays? What were we thinking? Sure, let’s introduce an open flame into an enclosed space moving at 70 mph.
Who actually wants to drive to Glendale? Forty dates in a year of playing hockey will not work?, they will be out of town every other weekend and play a lot during the week. Kinda sad comment
Clearly a bias article. You’re going to have to explain to me why a economist predicts tempe is going to lose 36 million dollars a year to hotels in the ted, when by your own argument this will shift around spending and (bring people from around the phoenix metro) to this new spot? Not making alot of sense.
I mean, I linked to the economists’ study, and to articles about it. If you want the tl;dr, it’s: The vast majority of tax revenue wouldn’t be new to Tempe, and what is new wouldn’t be enough to make up for what’s siphoned off to help pay for the arena. How’s that?
Ever heard of Scottsdale? Most people with lots of $$$ to spend on entertainment live in Scottsdale and or like Old Town Scottsdale, which is only 4 miles from the TED. Most of the potential business for TED will be siphoned off from historic Mill Avenue. If a Mesa or Phoenix resident isn’t already coming to Mill Avenue, they aren’t likely to visit TED because a hockey team plays there.
Battle of The Analysis Reports!
Tempe Entertainment District:
Seidman Research Institute Study Hits, Misses & Pie in the Sky
https://grandcanyoninstitute.org/research/tempe-entertainment-district/
Let’s remember that the Yotes have the lowest active win percentage of any active NHL team, at .448, and rarely have a playoff run… it begs the question: why are we rewarding a franchise mired in controversy and perpetual mismanagement with little to no accolades or accomplishment?
Wait, so the Coyotes would be deserving of half a billion dollars in public money if only they made the playoffs every now and then?
Tempe does not need what didn’t work on the west side. Instead of more consumerism and merchandising can we just turn the area into a grounding space for human beings to go. A place where you can take off your shoes and walk in grass that isn’t marred by dog feces. Why do we need another hockey arena less than 2 mi from a space where hockey games are already being played. Tempe’s better than that.
you want your taxes quadrupled to pay for the millions to remediate the landfill so you can walk around barefoot?
It isn’t a landfill. It’s one of the city’s maintenance facilities.
It probably wouldn’t be too expensive to move that and it’s probably not the best use of that land, but calling it a landfill shows that the writer believes whatever the Coyotes lobbyists say. It’s like those “paper towns” that map makers used to put on their maps to catch plagiarists.
Tax breaks, economic impacts among points of contention as supporters, opponents debate Tempe’s Coyotes arena deal
To quote:
“One of the more contentious points of discussion centered around dueling studies on the projects’ potential economic impact that were both released this week.
One from the Grand Canyon Institute found that the deal would be a “net drain, not a net gain” for the city. The other, which was conducted by Arizona State University and funded by the Coyotes organization, found that the deal would be even more lucrative for Tempe than previously expected — to the tune of $34 million.
Gutierrez cited ASU’s credibility, while also critiquing GCI’s heavy focus on the arena and music venue portion of the proposal as an incomplete analysis.
“There’s $1.8 million more of investment on our part that were never included in this report by an entity that we hadn’t heard of,” Gutierrez said about GCI’s report. “But we have heard of ASU. We have heard of the W.P. Carey School. We have heard of the Seidman Institute. And their report … shows no tax dollars will be used in order to build any part of this development.”
The opposition countered by saying that, regardless of whether Gutierrez had heard of GCI before its report, the institute is “actually very well-known and well-renowned in Arizona and nationally.” They also pointed out the fact that the ASU study was paid for by the Coyotes and questioned whether its findings were credible for that reason.
“There are many entities within ASU that are for-profit. You tell them what you want the findings to show, and they figure out a way to show what you need,” Penich-Thacker rebutted. “If I’m presented with information that was bought and paid for by the person trying to get me to buy it, I would definitely believe the information that was not purchased by the salesman himself.””
https://www.azcentral.com/story/news/local/tempe/2023/04/18/supporters-opponents-debate-merits-of-tempe-coyotes-arena-deal/70123080007/
Note: Video of the complete debate is at the end of the article.
Universities letting their names get attached to studies for hire would be a good subject of a longer analysis.
Universities want to let their people have a side hustle, because otherwise they may lose those people to another university that pays more and/or allows side hustles. And of course, they don’t want to be seen to be suppressing academic freedom.
But invariably, that means their reputations are going to be tarnished by stuff like this.
I could pitch that story to Global Sport Ma — oh, hmm, maybe not.
Did that go out of business?
No, it’s still going strong. But it’s based at Arizona State.
Whenever the billionaires come looking for money from taxpayers, one should ask why we are subsidizing a business. If it made money, they would pay for it themselves. The same arguments were attempted in Halifax NS by one of your former “hockey team” owners to build a football stadium for 8 dates a year in an economically deprived area of Canada. The numbers didn’t work here and I am sure they won’t work in your town. Do yourselves a favor and just say no to foolish and wasteful use of public money. Let’s stop subsidizing the rich.
From what I understand, the CFL isn’t asking for nearly as much public money from Halifax as the Coyotes expect from Tempe and yet Halifax seems to be a lot more reasonable about it.
https://3downnation.com/2022/07/15/qa-mayor-mike-savage-states-there-is-no-political-appetite-for-a-cfl-specific-stadium-in-halifax/
It’s paywalled, but there is a new AZ Central story with the apparent headline “Tempe-Coyotes deal to bring major economic gains, massive tax revenue for city, ASU study says,” and even without paying for the Republic, I would say that is complete nonsense.
Here’s the report. It’s just an ASU rehash of the garbage CSL analysis above. From last week, so not sure why the Republic is writing about it now.
https://www.documentcloud.org/documents/23787481-asu-report