The Arizona Coyotes’ proposal to build a $2.1 billion sports-and-entertainment complex that would include a new arena was rejected by voters, casting doubt on whether the National Hockey League team will remain in the Phoenix area.
(Bloomberg) — The Arizona Coyotes’ proposal to build a $2.1 billion sports-and-entertainment complex that would include a new arena was rejected by voters, casting doubt on whether the National Hockey League team will remain in the Phoenix area.
Tempe voters defeated three different propositions that would have allowed the plan to proceed. Nearly 30,000 voters — a turnout of 32.6% — cast ballots before Election Day Tuesday and there were not enough uncounted same-day ballots left to overturn the losing margins, Maricopa County election officials said. Each ballot measure was losing by a margin of at least 3,000 votes on Wednesday morning.
“We are very disappointed Tempe voters did not approve Propositions 301, 302, and 303,” Coyotes Chief Executive Officer Xavier A. Gutierrez said in a statement. “What is next for the franchise will be evaluated by our owners and the National Hockey League over the coming weeks.”
The proposal ran into fierce opposition from critics who said the development would do little to address concerns in the rapidly growing city about increased traffic and the lack of affordable housing. Tempe, part of the sprawling valley that includes Phoenix, is one of the top “boomtowns” in the country, according to SmartAsset, and, like others that swelled during the pandemic, is grappling with the consequences of that growth.
The opposition, led by the Tempe1st super-PAC, contended that the deal represented corporate welfare and would divert resources away from other priorities. “Across the country, you see these do not work well for communities,” Lauren Kuby, who is part of Tempe1st and formerly served as a city council member, said in an interview before the vote.
Kuby’s super-PAC flooded the city’s streets with lawn signs that said “no tax breaks for billionaires” and “no handouts for corrupt billionaires.”
On the other side of the debate, proponents felt the deal was being unfairly characterized to tap into populist anger. “Arizona has an envy problem,” said Dennis Hoffman, director of the Seidman Research Institute at Arizona State University, which was hired by the Coyotes to analyze the proposal. “They’re envious of people that have money. There are some that are envious, or skeptical, of the entire development community.”
The total cost of the project was estimated at $2.1 billion and would have included two hotels, a 3,500-person theater and up to 1,995 residential units. It also would have featured a new arena for the Coyotes, a team owned by the only Hispanic member of the NHL Board of Governors — the real estate and casino magnate Alex Meruelo. The Coyotes currently play at Mullett Arena at Arizona State University, a 5,000 seat facility that also hosts college matches.
A firm owned by Meruelo, Bluebird Development, would have paid the city $50 million for the first and second phase of the project. In turn, the city was planning to provide a property tax abatement on the arena, music venue, practice facility, and team headquarters. In order to improve the brownfield site where it was to be built and construct needed infrastructure, a Tempe taxing district would have been established to sell as much as $229 million of bonds.
The city estimated that the total economic impact of the project over 30 years would have been $13.6 billion. “When people look at this deal and peel back the layers,” Tempe Mayor Corey Woods said in an interview before the vote, “I think they’ll see a deal that brings a tremendous amount of amenities to the city of Tempe while also trying to protect taxpayers.”
Still, economists are often skeptical of such projections and say sports facilities rarely deliver on the benefits promised.
Local voters don’t always get the chance to weigh in directly on such projects, which are often decided by lawmakers locally or at the state level. In 2016, San Diego voters rejected a new stadium for the NFL’s Chargers, and the team now plays in Los Angeles.
A Sports Business Journal analysis in May found that voters have approved 60% of the roughly 50 propositions, initiatives, and referendums that have involved funding or property rezoning requests for major league sports facilities. Even so, the teams often still succeeded in eventually getting public financing even if the proposals initially failed at the ballot box, the analysis found.
(Updates paragraphs five, six and seven to include Lauren Kuby’s affiliation with super-PAC and comments from Dennis Hoffman.)
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