CXLIII - UPDATED 6/3 - Coyotes arena deal takes next step after Tempe council votes to open negotiations

[KevFu]

You're suggesting that two Valley municipalities should fight over who can offer the best deal to build the Coyotes an arena? I would have to seriously question your business acumen here... considering we are on the BOH and all

I wasn't suggesting it at all; I was pleasantly surprised that it almost appeared like Phoenix was suggesting it. Of course, the reality is, they want to lure the Coyotes to PHX because if it's getting built somewhere they want it to be built there; they just don't want to foot the bill.

But we are on BOH, so of course it will be mentioned that no one wants the Coyotes in the entire metro area because it's hockey, it's a desert; and of course I'll have to bust-out the Bow-Tie diagram of the market and say "Glendale is 18.5 miles West from the Downtown Sports district (Suns/DBacks), and the population center of the metro area is actually EAST of Downtown Phoenix.

 

[LPHabsFan]

So with the numbers changing, how much money is the city putting in this "privately funded" district?

 

[1CasualFan]

But we are on BOH, so of course it will be mentioned that no one wants the Coyotes in the entire metro area because it's hockey, it's a desert; and of course I'll have to bust-out the Bow-Tie diagram of the market and say "Glendale is 18.5 miles West from the Downtown Sports district (Suns/DBacks), and the population center of the metro area is actually EAST of Downtown Phoenix.

I'm not that guy.

 

[Llama19]

Arizona Coyotes could build arena in Tempe; city agrees to start negotiations on entertainment district plans

To quote:

"Also, (Phoenix’s aviation director Chad) Makovsky said by allowing apartments to be built within such a close proximity to the airport, Tempe is violating a 1994 agreement between Phoenix and Tempe, but the city of Tempe and the attorney for the Coyotes have a very different interpretation of the agreement. Jean-Jacques Cabou, outside legal counsel for the city of Phoenix said in a letter to Tempe officials that a lawsuit could be filed if Tempe goes through with the development, which he said is in violation of the 1994 Intergovernmental Agreement.

“We understand Tempe’s desire to develop this land east of the airport, and Phoenix Sky Harbor is not in opposition to the Tempe Entertainment District development as a whole. Our concern has been and remains with the proposed residential high rise which would violate the terms of an intergovernmental agreement between Phoenix and Tempe,” Makovsky said in statement. “If the residential building is not removed from the project, it jeopardizes the entire agreement. For nearly three decades this agreement has helped reduce the harmful effects of noise for Tempe residents. We are optimistic we can come to a mutually beneficial solution which will ensure compatible land use in the high-noise areas directly under Sky Harbor’s flight paths.”

Tempe Councilwoman Lauren Kuby, whose term on the council expires at the end of the month, voted against moving the proposal forward. She was joined by Councilwoman Doreen Garlid. Kuby raised several issues with the Coyotes proposal and with the team’s ownership, but she said her biggest sticking point was having apartments on the site and the concerns raised by officials at Sky Harbor.

Kuby would rather have voted Thursday to take housing out of the proposal altogether. But now she worries that City Hall could be caught up in a lengthy and expensive legal fight with the airport and city of Phoenix."

Source: www.bizjournals.com/phoenix/news/2022/06/02/coyotes-tempe-arena-vote.html

 

[Fenway]

 

[MNNumbers]

I'm just glad for the companies that make popcorn, because there is going to be a lot of watching yet before this whole thing is over.

First - Mereulo offers $40M for the sake of soil remediation. He could just as easily drop his request to $160M for the GPLET. Obviously there is a difference between those 2 methods. And, one would hope the city is going to defend their own interests.

Second - There is the whole business with the airport, the FAA, and the city of Phoenix even threatening a lawsuit.

It's not going to be a short process, that's for sure.

 

[Fenway]

​

 

[JimAnchower]

Of those remaining on the council after July 1, was the vote 3-1?

 

[Legion34]

Can someone explain bettmans 30 year no relocation thing?

Does that mean that they are locked in a 30 year lease?
That merulo has to agree to not re locate?

I don’t know what that means a

 

[Yukon Joe]

Can someone explain bettmans 30 year no relocation thing?

Does that mean that they are locked in a 30 year lease?
That merulo has to agree to not re locate?

I don’t know what that means a

Any new owner in the league has to sign a promise or pledge with the league acknowledging they can't move the team for X number of years.

Given the precarious situation of the Yotes Meruelo did not have to sign such a pledge when he bought.

Bettman is saying that if a new arena is built Meruelo will sign one.

This is separate from the arena lease - that agreement will have whatever term is negotiated.

 

[Legion34]

Any new owner in the league has to sign a promise or pledge with the league acknowledging they can't move the team for X number of years.

Given the precarious situation of the Yotes Meruelo did not have to sign such a pledge when he bought.

Bettman is saying that if a new arena is built Meruelo will sign one.

This is separate from the arena lease - that agreement will have whatever term is negotiated.

Ok that makes sense. Basically if this goes through. And the odds are pretty good. Hockey in Arizona is saved

Good for them. As long as it can be viable. There are multiple reports owners are getting. Fed up paying into revenue sharing for them.

Hopefully it works out

 

[Spydey629]

*insert Spanish Inquisition meme*

The Inquisition. What. A. Show…

 

[Devils 3silverones]

Any new owner in the league has to sign a promise or pledge with the league acknowledging they can't move the team for X number of years.

Given the precarious situation of the Yotes Meruelo did not have to sign such a pledge when he bought.

Bettman is saying that if a new arena is built Meruelo will sign one.

This is separate from the arena lease - that agreement will have whatever term is negotiated.

Good afternoon,

To me, this is a huge situation.

30 years... There has to be a ABSOLUTELY cancelation at some point no?

I will obviously deferre to those more in the know than I am.

@Legend @Casual, @aquib @mnumbers

The numbers to me don't make sense.
Please advise..

Have a nice weekend all.

 

[TheLegend]

Good afternoon,

To me, this is a huge situation.

30 years... There has to be a ABSOLUTELY cancelation at some point no?

I will obviously deferre to those more in the know than I am.

@Legend @Casual, @aquib @mnumbers

The numbers to me don't make sense.
Please advise..

Have a nice weekend all.

Don’t have all the numbers yet.

It’s apparent Meruelo is cutting the need for bonds. In the public eye, bonds are like waving a red hankie in front of a bull.

But the money has to come from somewhere else and in listening to Nick Woods it appears it’s going to be the GPLETs and TPT end.

Biggest plus right now though is we’ve moved to a phase where those details become more public. You had the feeling the Coyotes have been wanting to take airport authority and all their “concerns” on in public and they finally were able to. Up until yesterday they couldn’t do that. That can also go the other way with Councilwoman Kuby throwing all of her own charts and numbers back at them.

 

[Devils 3silverones]

Don’t have all the numbers yet.

It’s apparent Meruelo is cutting the need for bonds. In the public eye, bonds are like waving a red hankie in front of a bull.

But the money has to come from somewhere else and in listening to Nick Woods it appears it’s going to be the GPLETs and TPT end.

Biggest plus right now though is we’ve moved to a phase where those details become more public. You had the feeling the Coyotes have been wanting to take airport authority and all their “concerns” on in public and they finally were able to. Up until yesterday they couldn’t do that. That can also go the other way with Councilwoman Kuby throwing all of her own charts and numbers back at them.

Thank you. I appreciate your info.
The charts are a "speculation" , to me. I agree. The either way part is the next step.
My feeling is, so far so good.
I do wonder of/if cards in pocket for city of Phoenix and a possible nix for "sour grapes" regarding competeting arena/entertainment etc.

 

[PCSPounder]

We crossed over into the absurd when Sky Harbor posted their economic impact "analysis" - now they've gone to plaid.

Airbus A380: End of a multibillion-dollar dream – DW – 12/16/2021

The last Airbus A380 has been delivered, bringing the program to an end. Once seen as the future of travel, the world's biggest aircraft turned into a flop. But for the plane-maker, it was still worth the effort.

www.dw.com

Dammit, I worked hard to set the appropriate movie reference here. Must you cross the streams?
(I may end up going to Hell for this one)

 

[MNNumbers]

Usually a new owner signs a 7 year no-relocation agreement. This was waved for Meruelo because, as Bettman said (and this was definitely a lawyer thing), "he purchased the original IA company, so the non-relocation clause went with that company, and it is already expired."

Seemingly, there are 2 things here.

1 - the League's requirement. I assume that would be the usual 7 years.
2 - The acutal lease with Tempe. I assume that is going to eb 30 yeatrs, or at least that is what is going to promised.

However, one must remember that the Coyotes had a 30 year lease with Glendale as well, and that was voided when they went into BK.

Note - I am not predicting the same here. I am only reminding everyone of the facts surrounding leases.

 

[Apex Predator]

So the deal goes through and they can’t move for 30 years? So if hypothetically the coyotes still struggle and keep losing money they can’t move them?

 

[JMROWE]

Really it has gotten to this the Coyotes & the NHL. begging Tempe to fund there arena that they will never fill after everyone with half a brain in the state of Arizona including the state of Arizona it self said no & also said don't the door hit you in the ass on the way out .

All Tempe has to is look at the books over the past 27 years of the coyotes to see this is a bad idea all this will do is be a giant white elephant for Tempe & monument of failure of the coyotes in Arizona & so if Tempe is smart they would pass on this & just help them pack the moving trucks bound for Houston after next season .

 

[TheLegend]

Usually a new owner signs a 7 year no-relocation agreement. This was waved for Meruelo because, as Bettman said (and this was definitely a lawyer thing), "he purchased the original IA company, so the non-relocation clause went with that company, and it is already expired."

Seemingly, there are 2 things here.

1 - the League's requirement. I assume that would be the usual 7 years.
2 - The acutal lease with Tempe. I assume that is going to eb 30 yeatrs, or at least that is what is going to promised.

However, one must remember that the Coyotes had a 30 year lease with Glendale as well, and that was voided when they went into BK.

Note - I am not predicting the same here. I am only reminding everyone of the facts surrounding leases.

I wasn’t sure about the 30-year thing.

It appeared on the surface to be the league would impose a 30-year no move document instead of the usual 7-year. This would be separate from the lease.

After all Meruelo wasn’t required to sign a 7-year once he bought the Coyotes.

This could be the league telling Meruelo that “okay, we’ve allowed you a ton of leeway here but you better be sure because you’re stuck with it for the duration.”

 

[TheLegend]

Really it has gotten to this the Coyotes & the NHL. begging Tempe to fund there arena that they will never fill after everyone with half a brain in the state of Arizona including the state of Arizona it self said no & also said don't the door hit you in the ass on the way out .

All Tempe has to is look at the books over the past 27 years of the coyotes to see this is a bad idea all this will do is be a giant white elephant for Tempe & monument of failure of the coyotes in Arizona & so if Tempe is smart they would pass on this & just help them pack the moving trucks bound for Houston after next season .

For the unpteeth time to people who never pay attention…. Tempe isn’t building the arena…. Meruelo is.

And they won’t be looking at just the Coyotes’ books. They’ll be looking at the developer’s (ie: Meruelo’s.)

 

[KevFu]

Usually a new owner signs a 7 year no-relocation agreement. This was waved for Meruelo because, as Bettman said (and this was definitely a lawyer thing), "he purchased the original IA company, so the non-relocation clause went with that company, and it is already expired."

Seemingly, there are 2 things here.

1 - the League's requirement. I assume that would be the usual 7 years.
2 - The acutal lease with Tempe. I assume that is going to eb 30 yeatrs, or at least that is what is going to promised.

However, one must remember that the Coyotes had a 30 year lease with Glendale as well, and that was voided when they went into BK.

Note - I am not predicting the same here. I am only reminding everyone of the facts surrounding leases.

Right. A League "30-year no movement" requirement sounds like a big deal, but really isn't.

Virtually no one leaves before their (first) lease is up, unless it's because the same people who gave the team the lease are the ones who will hold the lease at a new facility. If they do leave before the lease is up, it's a year or two max. With a pretty steep buyout.

The buyouts are steep enough that teams like the Tampa Bay Rays and the New York Islanders under SMG are stuck running out the clock; The Islanders tried to buy their freedom from SMG and were flatly rejected. SMG said they could "buy out" the lease for $30 million, as long as they signed a new one with SMG for the Coliseum through at least the same term. So that wasn't a buyout price, it was a renegotiation price.

The Seattle Supersonics left ONE year early... and it cost them $75 million.

If the Coyotes get a new arena, which they own and operate, they're going to stay in that facility for 30 years unless a catastrophic situation occurs (i.e. building is destroyed by fire/plane crash; or like WW3).

And lots of you pining for the Coyotes to move will freak out about that for a while, but teams with good lease/arena situations are healthy.

 

[KevFu]

So the deal goes through and they can’t move for 30 years? So if hypothetically the coyotes still struggle and keep losing money they can’t move them?

Correct. Which sounds bad when you state the question like that; but your definition of "Struggle" and implication that "losing money" is a debilitating thing are not what the economic reality of pro sports is.

Look at baseball, where the Marlins have a new ballpark, terrible attendance and ownership that doesn't spend to win. They're in zero danger and they're not hurting anyone else in the league at all. The amount of money they get from MLB's National contracts with TV and sponsorship easily covers operations. If they lose money, it's by their own choice to spend more on players than their revenue. Which most teams are totally fine with when they are good, and then they pinch pennies when they are not good.

See: San Jose Sharks losing roughly $20 million over a 10-year period while spending 99.6% of their cap space. If "losing money" was a "problem" they could choose to NOT SIGN that last free agent to a $3 million contract, be $3 million under the cap, and make a profit. But they don't care about "losing money."

The only people who care about low attendance and "losing money" are people who want teams to relocate.

 

[awfulwaffle]

Correct. Which sounds bad when you state the question like that; but your definition of "Struggle" and implication that "losing money" is a debilitating thing are not what the economic reality of pro sports is.

Look at baseball, where the Marlins have a new ballpark, terrible attendance and ownership that doesn't spend to win. They're in zero danger and they're not hurting anyone else in the league at all. The amount of money they get from MLB's National contracts with TV and sponsorship easily covers operations. If they lose money, it's by their own choice to spend more on players than their revenue. Which most teams are totally fine with when they are good, and then they pinch pennies when they are not good.

See: San Jose Sharks losing roughly $20 million over a 10-year period while spending 99.6% of their cap space. If "losing money" was a "problem" they could choose to NOT SIGN that last free agent to a $3 million contract, be $3 million under the cap, and make a profit. But they don't care about "losing money."

The only people who care about low attendance and "losing money" are people who want teams to relocate.

I look at the Coyotes as Muerelo's little toy, and his main money driver is the residential and commercial units he is building in addition to the arena itself. He's expecting to make money off of that development, he just wants to have fun owning a hockey team(and having a gambling license in AZ).

 

[KevFu]

I look at the Coyotes as Muerelo's little toy, and his main money driver is the residential and commercial units he is building in addition to the arena itself. He's expecting to make money off of that development, he just wants to have fun owning a hockey team(and having a gambling license in AZ).

That's a lot better than how most people view it, but not even the whole picture. Every owner buying a sports team in the modern era of sports business (last 25 years or so) GOT RICH ENOUGH to buy a sports team from their primary enterprise. The development is ALSO a secondary business for him.


It's probably longer than 25 years, but John Spano didn't get rich enough to buy a sports team.