Let’s get this out of the way right off the bat: The Arizona Coyotes‘ proposed arena site is not in Scottsdale. It’s right next to Scottsdale, but it’s not in Scottsdale — much like the Oakland A’s proposed stadium site is on what’s called the Las Vegas Strip, but not actually within the city limits.
Still, just like when Las Vegas Mayor Carolyn Goodman said she thought the A’s should stay in Oakland, when the mayor of Scottsdale says that he doesn’t want a Coyotes arena on his doorstep, that’s not exactly a great way to create momentum for the Coyotes’ arena campaign:
The prospect of a rookie developer attempting to buy Arizona State Trust Land with absolutely no infrastructure on the Phoenix side of the 101/Scottsdale Road intersection at the doorstep of Scottsdale is not feasible, or welcome…
I admire the hockey sport, Arizona Coyotes community involvement and phenomenal youth clubs at the Scottsdale Ice Den. But I along with City of Scottsdale staff will continue to monitor any actions that occur, and negative repercussions for Scottsdale. As it stands today, the fantasy hockey project must move west, away from Scottsdale.
Mayor David Ortega’s specific beef is about water and sewer lines, which he said he has no intention of providing from Scottsdale, and wants extended from Phoenix to the west instead. (He did say Phoenix Mayor Kate Gallego “confirmed that all utilities must be extended from 56th Street,” which isn’t exactly clear about whether Gallego is offering to foot the roughly $100 million bill for that, or is just acknowledging that whoever gets the land would need to pay for it.) Ortega also complained that “the dream Coyote retail components sit too close to the retail lions of Scottsdale,” implying that he thinks it would just cannibalize economic activity from his city.
Again, none of this is a death knell for the Coyotes project, as Ortega’s approval isn’t needed. But as we just saw in Kansas City, development subsidy plans are most likely to fail when all the “growth coalition” ducks aren’t in a row, so starting off with one elected official loudly proclaiming that the arena should stay offa his lawn is definitely not what Coyotes owner Alex Meruelo would want.
For now, Meruelo needs to focus on winning a public auction for the land he wants — currently set for June 27 — and then getting both Phoenix and Maricopa County to sign off on the creation of what Arizona calls a “theme park district” within which a tax surcharge would be levied on sales or business income and then kicked back to pay off construction bonds. This isn’t a TIF, because it’d be a new tax on top of the development paying normal taxes to the city and county, but it’s also not quite like a tax just on tickets where the money mostly comes out of a team owner’s pockets because economics; I’m currently engaged in a lengthy email exchange with a couple of economists about how exactly to figure out what should count as the public cost, but since we don’t know the projected total amount of the tax surcharge it’s a bit premature anyway.
If Meruelo doesn’t get what he wants, team CEO Xavier Gutierrez has warned, “the NHL has made it very clear” that “we would have to look at other markets,” which is not what commissioner Gary Bettman has been saying out loud, but sure, rattle that move threat saber. It doesn’t sound like at least one local elected is impressed, but maybe you’ll have better luck finding Phoenix or Maricopa County officials who are more admiring of the hockey sport.
While people have been waiting for the Coyotes to move for a long time, eventually they have to do something if they don’t get an arena deal done. There are 2 arenas in the Valley that refuse to let them in. Voters in one city has already told them they don’t want them, in the aftermath another city (Mesa) said “meh” when they were rumored to be interested in going there, and now the Mayor of another city has said he doesn’t even want them near his border. Eventually they are going to have to say “clearly people here don’t care”
Mayor Ortega said the Coyotes proposed retail development would cannibalize Scottsdale retail, what about Desert Ridge, City North, Scottsdale 101 and Kierland? What about adding a third arena competing with the Footprint Center? Phoenix has even more to lose from the Coyotes fantasy hockey development.
The site is at a prime corner of Scottsdale Road and Loop 101. Unfortunately 1,000 acres to the north and west are unimproved state trust land. Huge developments are underway on both the northeast and southeast corners of Scottsdale Road and Loop 101.
“But I along with City of Scottsdale staff will continue to monitor any actions that occur, and negative repercussions for Scottsdale. As it stands today, the fantasy hockey project must move west, away from Scottsdale.” sounds like a litigation threat to me. Way to go Scottsdale and Grayhawk Community Association.
Interesting.
A question for someone who has a better understanding of Arizona municipal/state laws than I do (which would be almost everyone):
If the land is adjacent to Scottsdale and the ASLT has designated it as surplus to requirements, can Ortega and the Scottsdale council simply buy it (through auction or otherwise) and incorporate the new land into their city limits?
In my general district, municipalities often get sweetheart deals on raw land if they can show they need it and have a plan to develop it (IE: it is necessary as ‘growth is limited by present borders/limits’)
The 100 acre parcel the Coyotes want is surrounded by 1,000 acres of unimproved desert. The land isn’t surplus, unless you consider all Arizona State Trust land surplus. There are plenty of smaller parcels and land already in private ownership ready for development with infrastructure already in place. Hopefully the Land Department will come to their senses and find a reason to cancel this auction.
Thanks. So our man Alex wants to occupy the middle of this developable land and draw a district around it in which all future development will pay him? Or does he just want to prevent other development without his ok or ???
Either way, it seems his ownership group has little to offer. They really should hit the road. Move, sell and pocket the $250m profit (for doing nothing), whatever. Just go.
For an alleged meritocracy, we sure do reward failure and corruption in this society don’t we?
The boundary between Phoenix and Scottsdale is Scottsdale Road (72ns Street) and development in Phoenix ends around 56th Street. The logical way to develop is to gradually extend infrastructure eastward from 56th Street, which is what Phoenix is doing. Another major factor is water rights, although the Central Arizona Project canal passes through the area, Phoenix and Scottsdale have junior rights to Colorado River water. The main source of water for the Phoenix area is SRP. Obviously Scottsdale isn’t willing to provide any water for a development in Phoenix. Another factor the Coyotes have ignored is flood control. The area around the McDowell Mountains, upstream from the Coyotes proposed development is subject to intense monsoon thunderstorms. There are IGAs involving the Flood Control District of Maricopa County that dictate how development and flood control structures are built to protect existing development including Loop 101 and the CAP canal. The Coyotes seem th have a sense of entitlement, we’re a “major league ” sports team and the rules don’t apply to us. I want a hockey arena where I want it, damn the impacts on everyone else.
Do we know who else would be interested in this parcel of land? I’m curious not just because of the potential competition to Mereulo, but also how other value this land. If no one else bites at the auction, wouldn’t that be kind of a bad sign that this land ain’t all that valuable, or would require a hell of a lot more work than it’s worth?
The site is at a prime corner of Scottsdale Road and Loop 101. Unfortunately 1,000 acres to the north and west are unimproved state trust land. Huge developments are underway on both the northeast and southeast corners of Scottsdale Road and Loop 101.
“But I along with City of Scottsdale staff will continue to monitor any actions that occur, and negative repercussions for Scottsdale. As it stands today, the fantasy hockey project must move west, away from Scottsdale.” sounds like a litigation threat to me. Way to go Scottsdale and Grayhawk Community Association. 28 years of failed hockey in the Sonoran Desert is enough.
I don’t really understand why NHL owners in this situation aren’t more tempted by Quebec City. I get why the league doesn’t want that – they have a collective interest in growing the total fan base for the sport by pursuing their quixotic quest of making hockey popular in the desert rather than having another team in a market where people overwhelmingly already follow hockey. However, from the perspective of an individual owner trying to make as much money as possible, it seems like they would make more from ticket sales, merchandise, etc in a smaller market that just has more hockey fans. Maybe the television contracts are bundled in such a way that being in a large market makes up for that even if no one is actually watching the games? It seems like a Quebec City team could hope to achieve a valuation similar to Winnipeg, which while towards the bottom of the league in valuations is still 50% more than what the Coyotes are worth now.
Quebecor has rights to the arena, and wants to be the owner if a team locates there. So it would work if Meruelo is willing to sell, but otherwise no.
I’ve never been to Quebec City and have nothing against it. But man, I don’t think people realize it’s a tiny market. The entire metro area has like 800k people; even greater Buffalo and Western New York have a couple million. Given how expensive even NHL franchises are these days, that’s a really steep price for a very low and defined ceiling in terms of earning potential. Yes, the floor is exponentially higher than in Phoenix, but they’d face the same issues as Winnipeg in that they literally can’t afford to have a bad stretch in fan interest.
Really, the NHL needs to tell the Maple Leafs to grow up and move another team into southern Ontario. If the NYC area can support 3 NHL clubs, there’s no reason that a second team in the Toronto metro region couldn’t also be successful. To me, it’s felt like the NHL has been leaving money on the table for years by not allowing this to happen.
Yeah, Hamilton would seem natural. (And they kiboshed a sale-move that would have sent the Coyotes there a decade or so ago, IIRC.)
If it’s in Hamilton, the Sabres would complain even more than the Leafs would. They draw quite a bit from that region given the amount of traffic between Hamilton and Toronto.
The guy who founded Blackberry tried to get the Preds or ‘Yotes to Hamilton and the NHL said no in the late aughts. In some ways, the worst thing that happened was the Predators actually took off in Nashville. It vindicated Gary Bettman’s insistence on Sun Belt markets and he still believes that somehow, by miracle or alchemy, the same will happen in Phoenix.
That was Jim Balsillie.
The other owners just don’t want to deal with him. He was sneaky and underhanded. He tried to buy the Penguins and said he’d keep them there, but really planned to move them. Same with the Preds.
Again, Bettman is not an ideal commissioner for a variety of reasons, but the Sun Belt expansion is not “his” strategy.
He works for 32 owners. They could have replaced at any time in the last 30 years if they didn’t like this strategy, But they have not. So clearly, this is what they want and therefore the success or failure of this approach, which has mostly been a success for them, is on them.
But part of Bettman’s job is to take the blame for the owners’ stupidity. Bruins fans, for example, don’t want to think that their owner, Jeremy Jacobs is the problem even though he, and a few other of the more powerful owners, are the real impediments to progress.
Quebec City may be a small metro area, but Quebec outside Montreal and the Atlantic Provinces would primarily follow the Nordiques. The rivalries with Montreal, Boston and probably Ottawa would be instantaneous. The Arizona Coyotes rival Sonora Los Lobos from Hermosillo would be extremely disappointed to lose their hockey rival.
I have always said the real answer to the Coyotes struggle – despite tremendous effort and very bigly genius marketing in the greater Phoenix area – is to place a team in Tucson.
While the size of the market is questionable- a Tucson team could partner with the U of A to build a shared arena like the PNC Arena in Raleigh. The real question is whether a market like Tucson could support NHL level pricing. The nice thing is that most people in the region are an easy drive to campus, but there’s a dearth of corporate support.
As someone who likes Tucson and has confidence they could put together a carnival like atmosphere- I’d be for it. That being said if it’s a choice between Tucson and say Austin, Houston or Salt Lake- it makes way more sense to move out of AZ.
Tucson is the 65th largest media market, right behind Dayton, Ohio. Even if you figured out a way to excite people there about hockey, there just aren’t that many people to watch on TV.
It’s not about the size of the market for us, it’s about the size of subsidy checks from hardworking taxpayers to keep our franchises rolling (and selling at premium prices).
It might be worth noting that, after the Glendale situation started to take on water, so to speak, the Coyotes first plan was to partner with ASU for a new arena in Tempe.
I guess the idea was that the Coyotes would share with ASU basketball and, perhaps, with ASU hockey and other sports.
I’m not sure why that didn’t work but I’m guessing it was because because ASU didn’t really want to pay (even half) for an arena that big. From what I can find, ASU basketball draws fewer than 9k a game. That’s perfectly respectable, but an NHL arena should have at least 16k. Yeah “concerts,” but the area already has other arenas so that wouldn’t justify that size.
And ASU hockey doesn’t even always sell out their new 5,000-seat arena. (That surprised me. I figured they could find a way to paper the numbers and claim sellouts, but according to the data I found on USCHO, they’re doing like 96%.)
ASU wrestling, one of the better teams, draws under 3,000.
Le Nordiques 2.0 would instantly become the team for French-speaking Canada, especially in Quebec and New Brunswick. You can thank the Montreal Canadiens for not being competitive in recent years.
That’s not how people work. People don’t just change their loyalty after a few bad years. Look at the Leafs. For most of their history, they’ve been a terribly run organization and yet they still have no problem selling very expensive tickets.
Nordiques 2.0 would be popular in and around Quebec and could take a bite out of the Habs fanbase if they had more sustained success, but the Habs are still extremely popular. They are important to the identity of French Canada. Despite sucking, they still routinely sellout the largest arena in the league. They’ll have to suck for many more years to begin alienating many fans.
And it is not at all clear that a new team there could create many new fans who are not already watching hockey.
This is right. We’ve discussed this here many times.
Quebec is just a very small market. About the size of Allentown-Bethlehem-Easton, which is a nice AHL market.
Sure, they could probably fill the building – which is more than the Coyotes can claim – but that’s not enough for the other owners to want a team there. (And they certainly can sell merch, but the league already sells a lot of Nordiques merch.)
Pretty much everyone in Quebec that will ever be interested in watching the NHL already does, so there isn’t much opportunity to grow the league’s overall fanbase. Whereas, even a modestly successful franchise in Atlanta or Houston might add several hundred thousand (or million?) new fans that the league can pitch to advertisers and TV partners.
And even in a hockey-mad town, “filling the building” is not assured. Winnipeg’s recent struggles will, no doubt, make the other owners even less likely to gamble on a small market. Hockey is still very popular in Winnipeg, but the economy there is not great at the moment and there is not a great base of deep-pocketed businesses to buy the corporate seats. The team has done a poor job of marketing, so perhaps they can build up their season-ticket base by just making an effort, but it still looks pretty dicey.
However, an argument might be made that Quebec as a province of nearly 8m people – plus the rest of eastern Canada – could support two teams if there are enough people who, for whatever reason, are willing to switch allegiances from the Habs or whatever team they currently support (the Sens or maybe the Bruins).
And there may be reasons why Canadian broadcasters want more content for their French-language channels. I’m nots sure about that. Understanding that market is a full-time job, but it is not my job so I don’t know.
But I suspect that sort of “regional team” logic only really makes sense for football where there aren’t many games and people will travel further a few times a year rather than many times a month. Quebec would be a great place for a new CFL franchise and there are people working on that. (I’d bet an NFL team could even do well there. Football is fairly popular in Quebec.)
I don’t know if that works for the NHL.
So, the best place for another Canadian team would be in Southern Ontario. There are certainly enough people and corporate buyers there to support it. And a lot of people there actively dislike the Leafs because their tickets are outrageously expensive and they have not made a Stanley Cup final since the “original six” era. (Which, for all intents and purposes, means never.)
But that raises the same question about new fans. Is there anybody in southern Ontario who would watch hockey who is not already watching hockey? Would it really do much for their Canadian TV rights package?
I think that’s probably a bigger hang-up for the league than the Leafs. Sure, the Leafs wouldn’t be happy about it, but they’d still be extremely profitable.
The Sabres, on the other hand, might see it as an existential threat.
So maybe a bit west of Hamilton. Kitchener-Waterloo would work better.
Demographics do not favor Atlanta or Houston, but let’s force the NHL there because TV markets. Murica, F$&k Yeah!
In an ever changing world there is something familiar and comforting about the Yotes train wreck.
Sky is blue (eclipse not withstanding), gravity still pulls, and thr Coyotes ownership is a shitshow.
Neil, this is one arena plan I thought you might actually be relatively ok with, because according to their plans, they are buying a piece of empty land, and privately paying for all construction, even the infrastructure, with no public funds going to build the project. Then possibly looking for a tax surcharge of the specific area after its built to help offset some of construction costs, but that isn’t money that would have ever existed if this wasn’t built in the first place, and presumably the city will still get some portion of that, so it will likely be a net gain of some sort. I guess I’m just not seeing the overall downside on this.
“That isn’t money that would have ever existed if this wasn’t built in the first place” is the sticking point. Arizonans would be spending their money somewhere if not at this development, so mostly you’re moving spending around rather than creating it out of whole cloth.
At this point the question becomes: Does that tax surcharge ultimately come out of the developers’ pockets (because they have to lower prices to account for the tax surcharge, or else people won’t buy their tickets/hot dogs/whatever), or does it get passed through to consumers, making this the state using its taxing power to collect money and then hand it over to Meruelo?
That’s not an easy question to answer, and as noted in the above post, I’ve been emailing several economists about it, with no solid resolution so far. There’s still a chance that this would be a relatively okay deal, but right now I don’t think we know enough about the details to say for sure. Which is why this post doesn’t say anything one way or another about whether this would be a good idea — it’s just noting that it’s not off to a great start winning supporters.
As I recall from college econ, that comes down to price elasticity (or inelasticity. I always forget which is which). I can recall drawing a diagram in a blue book in 1994.
Is that right?
Yeah, in part. Also to sunk costs vs. marginal ones, since there are no manufacturing costs to selling more seats for a sporting event. But I took my last econ class a decade before you did, which is why I’m leaning on the actual experts to hopefully come up with a verdict here.
Fair enough, thanks for the reply!
If you look at what happened in Glendale, you wouldn’t see this as a possibly OK deal. Glendale paid for the arena that opened in 2003. Elman was finally able to start construction on Westgate in 2006, when the Cardinals stadium was about to open. Only the first phase of Westgate was ever built, none of the high rise condo towers were ever built, and Westgatewent into foreclosure in 2011. The Coyotes went bankrupt in 2009, losing $30 million plus a year while Glendale was stuck paying all the arena debt. Then Bettman and Daly, the NHL ended up owning the Coyotes after bankruptcy, extorted $25 million from Glendale twice “as insurance the Coyotes stay in Glendale, don’t worry we have a buyer”. After 5 years of searching for a buyer, Bettman found George Gosbee, who ended up jumping off a balcony with a rope around his neck. The next Coyotes owner, Andrew Barroway, beat the crap out of his wife in an Aspen Hotel room. There are plenty of questions about Alex Meruelo and his brothers.
How the Coyotes can service a multi billion dollar debt without any local TV money and attendance anywhere near where it has been for every one of the last 28 seasons is impossible. There are good reasons Mayor Ortega called this a “fantasy hockey development”.
The NHL (the other leagues too) really needs to get away from owners who just want to use their franchises for complicated real estate cons. Unfortunately, it is hard to find billionaires like that.
I’m not sure, but I think maybe Ryan Smith might want an NHL team just for his own vanity and so his family will have even greater stature in Utah.
I’m not sure I’d want to hang out with somebody like that, but if I were a fan of that particular team, I’d much rather have an owner like that than one that just sees hockey as a means to make money off of something other than hockey.
“Then possibly looking for a tax surcharge of the specific area after its built to help offset some of construction costs…”
Why should the city/county/state need to be involved in any way whatsoever in financing the development there? The argument that the “money would never have existed” is nonsense. Should I get a chunk of my property tax refunded, since that tax money would never have existed if it weren’t for my house?
This is valuable land in a desirable area. It will be developed and will generate economic activity (and tax receipts) with no need to subsidise the development in any way.
That’s not the parallel, though. This would be like if you built a house, then the state imposed an additional property tax on top of your regular one, then refunded that amount to you.
There appears to be something happening.
https://www.espn.com/nhl/story/_/id/39915208/coyotes-relocate-salt-lake-city-part-nhl-plan
Without knowing more about these “sources,” it’s hard to guess what is going on here.
I don’t understand why they would leak this if it were not true.
But I don’t know why they would leak it if it is true.
Who benefits from “softening up the ground” for the eventual announcement that the team is moving to Utah? Can Ryan Smith start selling tickets?
There is no reason to think that ratcheting up the relocation threat is somehow going to make anything happen in Arizona.
The leak might make something happen in Utah, though. From the espn article:
“A bill supporting an NHL arena and entertainment district in downtown Salt Lake City advanced through Utah State Senate and has approval from the governor, but has not yet passed. The bill includes a 0.5% sales tax increase to help with funding. That increase would go into effect by Jan. 1.”
I don’t see how that helps Ryan Smith.
If the Coyotes announce they are moving there in a few months with or without an arena deal in place, the legislature will have more leverage to negotiate – or walk away – after they arrive.
Whereas, the politicians may be more inclined to support the tax if they thought the Coyotes’ move to Utah is contingent on this funding.
Feints within feints within feints.
Smith said Utah is “business friendly”. When a billionaire says that, it means that when a billionaire says “Jump”, the state government says “How high would you like me to jump, Your Excellency?”
Big Coyote apparently got to Scottsdale’s mayor.
https://www.azcentral.com/story/news/local/scottsdale-breaking/2024/04/10/scottsdale-mayor-david-ortega-walks-back-criticism-of-coyotes-project/73268369007/
This proposed site is way closer to where I live, but distance is not the reason I don’t go to Coyotes games. It’s because they are worse than bad, they are irrelevant. They have no one worth going to see, have not had anyone worth going to see for years, have no identity or personality. (As evidenced by their billboards, which are Coyotes logo vs. Opponent logo, as if people go to see logos.)
And my team plays here once a year, always at the end of some three games-in-five-nights road trip, where they roll over like dogs and get smacked 7-0 by a franchise that should not even exist.
The Coyotes have a lot of good prospects and will probably get another one in the next draft.
Unlike some other teams that tried to be competitive while rebuilding and did neither, the Coyotes committed to the tank-and-rebuild.
But until they get a new arena somewhere – or at least break ground on one – the uncertainty about their future is going hinder their ability to spend to the cap or attract free agents.
The Coyotes could be heading to Utah as soon as next week. A “daily fantasy” site reported the NHL has prepared 2 sets of schedules for next season, one for Arizona, one for Salt Lake.
https://www.dailyfaceoff.com/news/sources-nhl-drafting-2024-25-schedule-version-with-coyotes-relocated-to-salt-lake-city
FWIW:
https://www.sportsnet.ca/nhl/article/nhl-arizona-coyotes-preparing-for-possible-relocation-to-utah/
I agree that if the Coyotes move to the Maverick Center next season their leverage with Utah for a new arena is greatly reduced. The Delta Center will have the same problem as America West Arena, the sightlines were designed for basketball and thousands of seats will have an obstructed view. The sales tax appears to only include Salt Lake City proper, not even Salt Lake County. A sales tax only in Salt Lake City would raise a miniscule amount of revenue, there is very little retail in Salt Lake City. Salt Lake City (117) is substantially smaller than Glendale, Arizona (90) by 50,000. Why Smith wants an NHL team is a mystery, it will cannibalize his Jazz and soccer teams. Salt Lake is too small to support 2 winter sports, 3 if you count skiing, Denver is the next smallest market with NBA and NHL and is almost twice the size of Salt Lake City. Bettman seems to be grasping at straws to keep from relocating the Coyotes to Canada. Bettman might be desperate to resolve the Coyotes situation this year and avoid the ultimate embarrassment, for 2025-2026 the First Ontario Centre in Hamilton will be fully renovated and ready for an NHL tenant.
SLC’s TV market is bigger than that of several existing NHL teams and it is growing.
They have an owner willing to buy the team and, apparently, build a new arena (with public help). He is motivated to make this a success and, apparently, has the money to do it
The owners want to keep the team in the west for scheduling.
The Delta Center’s official capacity for hockey is 14k. Not ideal, but ok for a temporary home. Better than the sub-5k building they are in.
Hamilton has an arena, but it does not have an owner pushing this hard to get a team and the league would much rather move to an untapped market than take fans from two existing NHL markets.
I suspect the success of the team commercially will depend on their success on the ice. If they win, they will get support, just like Las Vegas. If they suck, they’ll have the same problem as the Coyotes.