PHOENIX — For the Arizona Coyotes, this is their last battle.
An auction will take place on June 27 at which the club can purchase a 95-acre parcel of untreated Arizona State Trust land in North Phoenix on which the Coyotes can build a state-of-the-art arena; the starting appraisal value for the site is $68.5 million.
More from Sportico.com
The Arizona State Land Department Board of Appeals approved the auction for the sale of the land, which under established law now requires public notice ten to fifteen weeks before the actual online auction is held.
Any person or entity can bid on the land, and if Coyotes owner Alex Meruelo is outbid, the club’s three-year quest to stay in Maricopa County will come to an end.
“If we are not the winning bidder, we would most likely have to consider a franchise relocation,” Xavier Gutierrez, the club’s president, said recently in a telephone interview. “This would be our only option.”
There are willing takers for the franchise. NBA’s Utah Jazz owner Ryan Smith asked the NHL earlier this year to begin an expansion process in a quest to bring a team to Salt Lake City.
Whether Meruelo would retain ownership of the team if it relocates remains to be seen. According to sources, the Coyotes are worth $675 million Sportico‘s own ratings, by far the lowest of the NHL’s current 32 teams.
“We haven’t gotten that far yet,” Gutierrez added. “This is the only option for us to build a house. There is no other place we can go.”
The NHL and commissioner Gary Bettman plan to wait until the auction ends before making any firm decisions.
“There is no decision to be made at this time regarding Arizona,” NHL deputy commissioner Bill Daly said in late March after general manager meetings in Florida. “We’re happy with where we are, and that’s for sure [Meruelo]’s intention to proceed with the auction.’
The land in question is centrally located in North Phoenix, bordering North Scottsdale, Arizona, near the 101 Freeway. It is a huge rural parcel of vacant land in an area not far from shopping centers and residential properties; it is a short drive from TPC Scottsdale Golf Course, home to the Waste Management Phoenix Open every February.
The Coyotes have a multi-use plan with homes, stores, an arena, a training center and a theater that could ultimately cost $3 billion and be built over several years. The 17,000-seat arena and training facility is expected to be built within three years at a cost of approximately $1 billion and ready for the 2027-2028 season.
That means the team would have to play three more seasons in the 4,600-seat Mullett Arena on the campus of Arizona State University in Tempe, Ariz., about 23 miles away down a busy corridor. They have a loan deal to play there next season, and options for the next two. It’s likely the team will play the 2024-2025 season in Tempe regardless of what happens with the auction, Daly said, adding, “It’s getting late” to have a contingency plan, and he said the Coyotes will likely could not be moved earlier. to next season.
The team loses “a substantial” amount of money playing in the Mullet each season, Gutierrez said. However, he refused to put a solid figure on it Sportico We’re told these losses are in the mid to high eight-figure range.
The increasingly bankrupt franchise has lost money every season since relocating from Winnipeg in 1996. The Coyotes played their first seven seasons at what is now Footprint Center in downtown Phoenix before moving to an arena in Glendale. where they played until 2022. They left that building due to a rental dispute.
The new lot is zoned for an arena and there is no legal conflict with the city of Phoenix building a competing building for Footprint, home of the NBA Suns and WNBA Mercury, Gutierrez said.
In Tempe, the players — using makeshift locker rooms outside the main building that cost the Coyotes $30 million to build, and practicing at a nearby facility in Scottsdale called the Ice Den — are not happy with the poor conditions at the Mullett.
The NHL Players Association declined to comment on the latest developments, although union president Marty Walsh recently said publicly that he is not happy with the situation.
“There are a lot of questions,” Walsh said. “So you can talk about buying land in Arizona, and it could be 10 years before you break ground. As far as I’m concerned, that’s unacceptable for the players on that team, and it should be unacceptable for the league.”
The Coyotes had hoped to stay in Tempe.
Last year they partnered with the city of Tempe to secure a plot of land to develop a similar concept. The $2.1 billion project had to go to a series of referendums after approval by the city council. But last May, Tempe voters rejected those three referendums by about 3,500 votes each, after the campaign cost the club millions of dollars.
In that case, the Coyotes would have had to develop the land, which is a federal superfund site, and raise that money through a public bond issue, repaid through usage fees on tickets, concessions and purchases throughout the complex. In return, the Coyotes would receive the land.
That process would have taken at least six months. Almost a year after those elections, the country still lies fallow, just as it has for decades. Tempe residents are currently voting on an overall city development plan.
In this case, there would be no public vote and the Coyotes are not seeking public funds. But winning the auction is only the first of many grueling steps.
The Coyotes must purchase what Gutierrez called the “raw land,” obtain the permits and equip it with infrastructure such as roads, a cement foundation, water and electricity at their own cost of $100 million to get it ready for construction of the arena complex.
“But guess what? It increases the value of all the land around it,” he said.
Then there is the financing. They are already going to a number of banks to look for investors in what will be an equity-debt relationship to build the project.
What that mix will be is up to the lender, Gutierrez said.
“Alex and I have already had discussions with eight of his banks, and they are all very interested,” he said.
Add in the three years to build it and another three seasons of huge losses at the Mullett, and it’s not a pretty picture.
But Meruelo paid $420 million to buy the franchise in 2019 and has spent many millions of dollars on top of that to keep the team afloat and try to build an arena. He is clearly determined to keep the Coyotes in Phoenix, Gutierrez said.
“Alex has demonstrated significant financial commitment,” Gutierrez said. “We are on the hook.”
Bettman said during the GM meetings that the NHL is still committed to the Phoenix region for the long term.
“We would have preferred to be in a new arena right now, but there are certain things that can’t be controlled,” Bettman said. “We believe Arizona, and especially the greater Phoenix area, is a good NHL market. It’s a place we want to be.”
Next: The Coyotes must win the auction. If not, the NHL’s 27-season run in the Valley will eventually be over.
Sportico’s Kurt Badenhausen contributed to this story.
The best of Sportico.com