Coyotes’ arena denied by voters, franchise’s future in Arizona looks uncertain

Tempe voters rejected a bid on Tuesday by the Arizona Coyotes and the city of Tempe to build a new arena complex near Priest Drive and Rio Salado Parkway, an ominous sign for the future of the franchise in the state.

“We are very disappointed Tempe voters did not approve Propositions 301, 302, and 303,” Coyotes president and CEO Xavier Gutierrez said in a statement. “As Tempe mayor Corey Woods said, it was the best sports deal in Arizona history. The Coyotes wish to thank everyone who supported our efforts and voted yes. So many community leaders stepped up and became our advocates and for that we are truly grateful.

“We also wish to thank the countless volunteers who worked so hard to try and make the Tempe Entertainment District a reality and the Tempe City Council for their support as well. While we wanted a different outcome, we remain grateful to all those who volunteered their time and talent. What is next for the franchise will be evaluated by our owners and the National Hockey League over the coming weeks.”

Nearly 30,000 voters — a turnout of 32.6% — submitted ballots for Prop 301, Prop 302 and Prop 303.

As of the initial returns at 8 p.m. Tuesday, Prop 301 and 302 had “no” votes leading 56% to 44% “yes” votes.

“No” votes led Prop 303 at 57% to 43%.

All three propositions had to pass for the arena plan to go through.

The Tempe vote to approve a new Coyotes arena fell far behind, and president and CEO Xavier Gutierrez said what's next for the franchise has yet to be evaluated, putting the team's future in Arizona in jeopardy. pic.twitter.com/tCe57LhM7v

— Arizona Sports (@AZSports) May 17, 2023

The $2.1 billion project will create a 16,000-seat arena, practice rink, 300,000 square feet of upscale retail, 1,600 apartments, two hotels and a theater at Priest Drive and Rio Salado Parkway.

The land sits on a former landfill, and the Coyotes and proponents of the plan, which includes several former Tempe mayors, have promoted their role as turning it from “landfill to landmark” without taking public tax dollars from Tempe residents.

Opponents at Tempe First warn of Coyotes owner Alex Meruelo’s departure from the team’s old home in Glendale, where the team at one point got behind in outstanding tax debts. The organization also fears that the Coyotes and developers will take massive tax breaks and the city losing funding on the project that could be spent elsewhere.

In November, the city approved bringing the plans to voters with three propositions: 301, 302 and 303. Ballots for the registered city of Tempe voters were mail-in only and had to be returned by May 16.

Prop 301 amended the general plan for the land. Prop 302 rezoned the land for the development and 303 allowed the city to enter an agreement with Bluebird Development.

In March, the City of Phoenix aviation department filed legal action against the city of Tempe for the planned residential development that is a part of the new entertainment district with the new arena for the Coyotes.

The formal complaint in Maricopa County Superior Court finds Phoenix, the owners and operators of Phoenix Sky Harbor International Airport, suing Tempe for a breach of contract, “asking the court to rescind Tempe’s recent zoning and land use changes and prohibit future residential uses in an area that the Federal Aviation Administration says is incompatible with residential development.”

The legal action regards the more than 1.2 square-mile area that is exposed to noise levels of a high degree from the nearby airport. Both cities agreed in the 1990s to keep planes away from homes in one of the airport’s flight paths due to safety and noise, which Phoenix says is an agreement Tempe breaks with the plan to put residential units in the path.

The Coyotes along with their development firm, Bluebird Development, responded in April with a $2.3 billion claim against the city of Phoenix for damages caused by Phoenix’s legal filing on March 27.

A public relations firm on behalf of the Coyotes and their developers said that the legal response is for Phoenix breaking its word and deciding “to undermine a plan to convert a hazardous unlined Tempe-owned landfill into a new sports and entertainment district next to Tempe Town Lake.”

Opponents have questioned the validity of the former landfill being “hazardous.”

The NHL team played its first season at Arizona State’s 5,000-seat Mullett Arena, by far the NHL’s smallest arena. The Coyotes and ASU have a deal for the pro team to play two more years at the arena with an option for 2025-26.

The Coyotes have been searching for a permanent home since the city of Glendale pulled out of a multimillion-dollar lease at Gila River Arena. Arizona had been playing on an annual lease until Glendale said it would not be renewed for the 2022-23 season.

The Coyotes began play in the state in the 1996-97 season after relocating from Winnipeg, Manitoba, where they were known as the Jets.

After making the NHL playoffs in eight of their first 15 seasons in the Valley, the franchise has made only one playoff appearance in the past 11 seasons.

Off the ice, the franchise has faced financial issues for decades, including a bankruptcy filing by former owners in 2009. After the NHL controlled the franchise for several years, hedge-fund manager Andrew Barroway purchased a controlling interest in 2014.

Billionaire Alex Meruelo purchased controlling interest in 2019 and became sole owner in 2023 when Barroway was banned indefinitely from the league after he was charged with felony strangulation and assault in Aspen, Colo.

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