CXLIV - The Tempe era set to begin as ASU opens Mullett Arena

[Mike Jones]

Mike… with all due respect… Arizona uses this system all over the state and for more than just sports teams. Without it there would be no growth at all. Phoenix would not be the sixth largest metropolitan center in the US today without it.

What we have to be diligent about is making sure these types of transactions don’t get abused.

Cities assess taxes for a reason and when they forgive those taxes for corporations residents have to pick up the tab.

Tempe is heading for a world of pain if they approve these tax breaks for the Coyotes.

 

[TheLegend]

For context, these are property tax abatements being requested, not direct funding such as bonds.
- 30 year property tax exemption on the arena, practice facility and theater.
- 8 year property tax exemption on the hotels, retail, office and residential space.

Per the article: all the other major professional sports arenas in Arizona are tax exempt, including the Footprint Center (NBA arena) in Phoenix as it is owned by a government entity. Also per the article Tempe has been granting 8 year property tax exemptions to other development projects, though no details of how much and how frequently Tempe has been doing so.

Since we’re on this subject… a big chunk of this is falling upon utilizing a GPLET.

As I stated above this system is used all over. This is a link to just what Tempe has issued….

GPLET | City of Tempe, AZ

This page shows properties that are part of the GPLET program in Tempe which stands for Government Property Lease Excise Tax.

www.tempe.gov

 

[TheLegend]

Cities assess taxes for a reason and when they forgive those taxes for corporations residents have to pick up the tab.

Tempe is heading for a world of pain if they approve these tax breaks for the Coyotes.

How would you know? You haven’t seen the final proposal.

 

[Stumbledore]

Since we’re on this subject… a big chunk of this is falling upon utilizing a GPLET.

As I stated above this system is used all over.

You're right, of course.

But because something happens "all over" -- like school shootings, for exampe -- does that mean we shouldn't be concerned about it? That we shouldn't try and stop it?

Calgary has the option to bring this citizen subsidy nonsense to a halt. But I'm not holding my breath because ....... subsidies are happening all over.

 

[Mike Jones]

How would you know? You haven’t seen the final proposal.

I've seen enough that if even a fraction of the proposed deal is accepted the results for Tempe taxpayers will be catastrophic.

 

[mouser]

I've seen enough that if even a fraction of the proposed deal is accepted the results for Tempe taxpayers will be catastrophic.

Are you able to quantify how “catastrophic” it would be for taxpayers?

For perspective, Madison Square Garden has a property tax exemption. United Center in Chicago had a property tax discount/exemption for over two decades.

Both “privately built” arenas.

 

[Mike Jones]

Are you able to quantify how “catastrophic” it would be for taxpayers?

For perspective, Madison Square Garden has a property tax exemption. United Center in Chicago had a property tax discount/exemption for over two decades.

Both “privately built” arenas.

Try substandard emergency services for one thing. Fewer services to people who need it. Less infrastructure construction. A lot goes into a city budget and that stuff is paid for through tax revenue. If you give away too much then you really harm the lives of your residents.

$25 million, for example, can go a long way in a city's annual budget. One thing is that increased tax breaks to businesses adds to the tax burden of residential taxpayers. Most cities have taxed residents way beyond where they should be.

The problem with most arena builds is that promises of things like jobs and development and added tax dollars are help out as carrots for voters. Cities give arenas tax breaks because they think their presence will inspire growth. How often has any of this come to fruition? I think Edmonton is still trying to fill in the blanks around their new arena.

This is all why I say that the Flames have to pay taxes on their arena when it opens. We simply cannot afford to give the rich, whiney owners a break like that.

 

[Chet Manley]

Looks like an excellent place to catch a hockey game.

 

[TheLegend]

You're right, of course.

But because something happens "all over" -- like school shootings, for exampe -- does that mean we shouldn't be concerned about it? That we shouldn't try and stop it?

Calgary has the option to bring this citizen subsidy nonsense to a halt. But I'm not holding my breath because ....... subsidies are happening all over.

I just finished saying the entire proposal should be looked at to be sure the long term benefits justify the risk for the city.

I’m not sold on TED yet. I’m encouraged by what I’ve seen so far. But the last thing I want to see is a repeat of what happened with Westgate. Which was a good concept in itself but it was the wrong people trying to execute it and the Coyotes ended up treading quicksand for the last 13 years because of it.

 

[Stumbledore]

For perspective, Madison Square Garden has a property tax exemption. United Center in Chicago had a property tax discount/exemption for over two decades.

Both “privately built” arenas.

So, you're saying ........ not really privately built?

 

[GhostofTommyBolin]

I'll just leave this here...

As Arizona Coyotes begin Tempe era, where things stand with their proposed new arena

www.azcentral.com/story/sports/2022/10/24/coyotes-prepare-tempe-debut-what-know-new-arena-plans/10536129002/

The $13-billion economic impact over 30 years is laughable. That's $430+ million per year. Just absolutely laughable, and typical when these new arenas are proposed. Normally the numbers are inflated to a degree, but holy smokes, this kind of number is so ballsy to throw out there. Anyone with a calculator can see how ridiculous this is and it makes anyone claiming this to be the case look like a moron.

Plus, $649 million in tax abatements don't really qualify the arena as "privately funded" in my mind.

Selfishly, I hope the arena gets built because I live about 20 minutes away. But I don't have a Tempe address, so this isn't going to affect me in the slightest.

 

[mouser]

Since we’re on this subject… a big chunk of this is falling upon utilizing a GPLET.

As I stated above this system is used all over. This is a link to just what Tempe has issued….

GPLET | City of Tempe, AZ

This page shows properties that are part of the GPLET program in Tempe which stands for Government Property Lease Excise Tax.

www.tempe.gov

Looking through all the leases, nearly every single major development in the Tempe town lake area has a GPLET of some form.

 

[awfulwaffle]

Cities assess taxes for a reason and when they forgive those taxes for corporations residents have to pick up the tab.

Tempe is heading for a world of pain if they approve these tax breaks for the Coyotes.

Great insight, why didn't I think of that, considering they are making so much money off the land already seeing as it's a dump currently.

 

[Tawnos]

The $13-billion economic impact over 30 years is laughable. That's $430+ million per year. Just absolutely laughable, and typical when these new arenas are proposed. Normally the numbers are inflated to a degree, but holy smokes, this kind of number is so ballsy to throw out there. Anyone with a calculator can see how ridiculous this is and it makes anyone claiming this to be the case look like a moron.

Plus, $649 million in tax abatements don't really qualify the arena as "privately funded" in my mind.

Selfishly, I hope the arena gets built because I live about 20 minutes away. But I don't have a Tempe address, so this isn't going to affect me in the slightest.

Well, if there are really 7,000 jobs created as a result, that's half or more of your economic impact already. The arena itself should employ about 1/3 of that. I don't think the number is that far out there, accounting for the normal amount the numbers are always inflated that you point out.

 

[Mike Jones]

Great insight, why didn't I think of that, considering they are making so much money off the land already seeing as it's a dump currently.

Thank you.

You can do a lot with a dump - including turning it into a park or green space.

 

[KevFu]

So question for the people who live in AZ, what makes the Tempe site so much better than the rumored backup plans that its worth going through all the hassle of dealing with airport's shenanigans? Why not just go the path of least resistance?

The market is shaped like a Bow-Tie or hour glass (due to mountains and suburban spawl). Glendale is a bad location because it's on the extreme edge of the market. The other side of the bowtie has to drive through the bottleneck to get to the arena, which is very hard on gameday.

Tempe is the knot of the bowtie, easily accessible by everyone. Hence, worth it.

 

[sh724]

Thank you.

You can do a lot with a dump - including turning it into a park or green space.

Turning it into a park or green space would require $70MM upfront to clean up the dump then however much money it cost to actually put in the park. After which the area would generate minimal new jobs, if any, and zero tax revenues. It would also require ongoing maintenance at the city's expense.

 

[Mike Jones]

Turning it into a park or green space would require $70MM upfront to clean up the dump then however much money it cost to actually put in the park. After which the area would generate minimal new jobs, if any, and zero tax revenues. It would also require ongoing maintenance at the city's expense.

So? It's a park. They're important and environmentally healthy. And taxpayers don't have to suffer because an NHL organization is harming their tax base with demented funding demands.

 

[sh724]

So? It's a park. They're important and environmentally healthy. And taxpayers don't have to suffer because an NHL organization is harming their tax base with demented funding demands.

Tax payers wont suffer by spending $70MM+ in actual cash to turn it into a park vs spending $0 in actual cash to bring in jobs, housing, tourism, etc?

Tax abatements are not the city using actual cash its the city saying we wont charge you taxes for X number of years. The city still gets new tax revenue from other streams related to the project just not directly from Muerello.

The city does nothing they are left maintaining a dump. The city uses the land themselves they are spending $70MM to clean up the dump plus whatever development expenses. The city does a deal with a developer that involves tax abatements and the city gives up a portion of the tax income that they would otherwise not be receiving.

 

[mouser]

Thank you.

You can do a lot with a dump - including turning it into a park or green space.

Tempe already has dozens of acres of park and green space on the town lake. This location is less desirable for a park because it's not actually on the town lake--the dam creating the lake is a few hundred yards to the east. The Tempe RFP does call for greenbelt on the property adjacent to the river bed.

 

[TheLegend]

Looking through all the leases, nearly every single major development in the Tempe town lake area has a GPLET of some form.

Like this one they recently approved.

Tempe approves proposal to create $1.8B resort-style lakeside neighborhood

The Tempe City Council has approved a proposed $1.8 billion project to transform blighted waterfront property into a resort-style neighborhood.

ktar.com

BTW.... This project had ZERO pushback..... from any source I know of.

 

[Mike Jones]

Like this one they recently approved.

Tempe approves proposal to create $1.8B resort-style lakeside neighborhood

The Tempe City Council has approved a proposed $1.8 billion project to transform blighted waterfront property into a resort-style neighborhood.

ktar.com

BTW.... This project had ZERO pushback..... from any source I know of.

If this is an example of Tempe decision making tax paying residents are facing a serious disaster with the whole arena thing.

 

[awfulwaffle]

If this is an example of Tempe decision making tax paying residents are facing a serious disaster with the whole arena thing.

How exactly? Seems like the city is only putting up $25 million, and the whole project is nearly $2 billion. And will generate revenue for the city compared to nothing now.

 

[Llama19]

About that $1.8B project...

$1.8B Tempe Town Lake project at center of lawsuit over the city's affordable housing strategy

Source (Paywall): www.azcentral.com/story/news/local/tempe/2022/08/27/south-pier-tempe-affordable-housing-lawsuit/7845672001/

 

[Mike Jones]

How exactly? Seems like the city is only putting up $25 million, and the whole project is nearly $2 billion. And will generate revenue for the city compared to nothing now.

These projects never work out the way cities hope. These promises are usually made by trained salespeople who care more about their clients than they do about taxpayers.

And it's going to be the tax breaks are going to seriously harm the city when the arena is open.