PHOENIX — City of Tempe officials are recommending that the City Council move ahead with negotiations on a new arena for the NHL's Arizona Coyotes, despite questions about the team owner's financial ability to pull off the project.
Tempe residents will get their first chance to comment Thursday on the $1.7 billion project - a sports, entertainment and residential district on city land at the west end of Tempe Town Lake.
The council is expected to vote on whether to move ahead or reject the project.
The Coyotes' plan was submitted nine months ago.
Lowest Score for 'Financial Strength'
A city evaluation team, working with consultants, released its recommendation to the council Friday, along with a scorecard rating the developer on six criteria.
The developer, a company called Bluebird LLC, was formed by Coyotes owner Alex Meruelo, who has a reported net worth of $2 billion.
Meruelo's company gets its lowest score, just 80 out of a possible 200 points for "demonstrated financial strength/ability."
"Project design" gets the highest score of 180 out of 200.
Overall, Bluebird got a score of 890 out of a possible 1,200 points.
Seeking $200 Million in Tax Revenue
Bluebird wants to buy 46 acres at the northeast corner of Rio Salado Parkway and Priest Drive, a former city dump that would need environmental remediation.
Meruelo's company wants the city to divert $200 million in projected sales tax revenue from the development to pay for infrastructure at the site.
The team has said the project would be financed by private investors.
Concerns about the project have been raised by:
- Phoenix Sky Harbor Airport officials: mainly about building heights and the site's proximity to runways. The project site would fall under Sky Harbor's flight path. The Federal Aviation Administration would have to consent to any agreement.
- The City of Phoenix: over a proposed 1,000 residential units in high-rise housing. Attorneys for Phoenix warned Tempe in a letter last week that the residential units would violate an almost 30-year-old agreement between the two cities.
- A coalition of residents and businesses, including Changing Hands Bookstore founder Gayle Shanks
Team Was Threatened with Eviction
When Meruelo bought the perennial money-losing Coyotes three years ago, he boasted about his business smarts.
"I have this knack for picking up businesses that are broken, losing money and turning them around," he told reporters.
Meruelo has stakes in casinos, restaurants and other businesses.
The end of the Coyotes' tumultuous tenure in Glendale was marked by the city's threat to lock the team out of the city-owned Gila River Arena late last year, over $1.3 million in unpaid city and state taxes.
The Coyotes blamed "human error" for its failure to pay its taxes on time.
By that time, Glendale had already decided to boot the team out of its hockey home since 2003.
The Coyotes played their last game at Gila River Arena in April.
Team Moving to ASU Campus
The Coyotes have agreed to make their home for the next two or three seasons at a new 5,000-seat arena on the Arizona State University campus.
The arena, built for the ASU's NCAA hockey team, has less than one-third the seating capacity of most NHL venues.
The Tempe City Council will meet at 2 p.m. Thursday at the Council Chambers in downtown Tempe. This will be the first public meeting and vote on the Coyotes' proposal.
In a news release last week, the city said that a "yes" vote to begin negotiations would trigger a process that could take several months and would include "robust public input."
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