Coyotes arena primer: Everything you need to know about the upcoming, 95-acre land auction and the subsequent plan

The Arizona State Land Department has officially posted for auction a 95-acre parcel of land (110 gross acres) in northeast Phoenix which the Coyotes hope to purchase. The land would serve as the site of the team’s new arena of about 17,000 seats, as well as an entertainment district that includes shops, restaurants, residences, a theater, an adjacent practice arena/training facility and possibly hotels.

The land department has set the auction date for June 27, with a minimum bid of $68.5 million. At this point, no other party has applied for the parcel, but with the bidding process now open, they could at any point during the time window. Per an Arizona State Land Department spokesperson, the other bidders will not be made public until the day of the auction.

Reports had suggested that the Mayo Clinic, which sits on the opposite (south) side of the Loop 101, was also interested in this parcel of land. But Jennifer Ruble, Vice Chair of Communications for Mayo Clinic in Arizona, said Mayo is not interested in the land, having purchased 228 acres from the state land department in December of 2021.

This will be a live and open, verbal auction, conducted by an auctioneer with bidders holding up paddles, much like you see at a livestock auction. The auction is open to the public and media and will be held at the Arizona State Land Department, 1110 W. Washington St., Phoenix.

According to public records research conducted recently, since 2017, there have been 117 Arizona land auctions and of those, only 26 (22 percent) have involved multiple bids. If Coyotes owner Alex Meruelo wants this land, history suggests that he has a good chance of running unopposed in his bid. If other suitors emerge with a well-hatched plan and the financial wherewithal to challenge him, it’s up to Meruelo to outbid them and win this auction.

This is likely Meruelo’s last chance to keep the Coyotes — and possibly the last chance to keep the Coyotes in Arizona unless another local bidder emerges with a viable arena plan and the financial will to complete the purchase of the team.

With the auction now posted, the Coyotes released previously leaked renderings of the site as well as a video of the project with a cost of more than $3 billion, all of which you can view in this story.

PHNX Sports caught up with Coyotes president and CEO Xavier A. Gutierrez for a wide-ranging interview about the auction and the site plan.

To get the league perspective, PHNX also spoke briefly to NHL commissioner Gary Bettman.  

Finally, there has been some speculation about the Coyotes returning to Desert Diamond Arena (formerly Gila River Arena) in Glendale on an interim basis to avoid playing at least three more full seasons at Mullett Arena. We asked both Gutierrez and Glendale City Manager Kevin Phelps about that possibility.

Here is the video the Coyotes released with a site plan.

Here is the Q&A with Gutierrez and, when relevant, the others mentioned above.

How did the pursuit of this land begin?

Gutierrez: “A month after the Tempe vote [in May], we submitted an application to the Arizona State Land Department for roughly 212 acres of state-owned land on the northwest corner of Scottsdale Road and the 101. It was a property that when we were examining sites was marked as unavailable because there was a lease on it. Shortly after the vote, we met with the State Land Department and asked if there were any potential sites that could fit all of our uses, and we narrowed it to that one very quickly. 

“When we submitted the application, we knew that this type of process to take something to land auctions could last up to 12 to 18 months. It’s really dependent on how fast you get all of your reports done: your survey, your title, infrastructure or environmental impact or what have you. This is raw land. There are no environmental issues, but there is a significant amount of infrastructure in which the project you build has to bear the cost.

“Initially, we were tracking a potential public auction notice in the early part of January. We were tracking towards getting something done in the first quarter, and then the infrastructure costs and the infrastructure requirements came back at a significantly higher number than we had assumed.

“We had assumed, per our civil engineers, that it would be an infrastructure of around $150 million. The number came back at well north of $230 million, and that’s before you buy the land. That’s before you build anything. You would have to assume those costs and so Alex said, ‘That really makes the viability of this project very difficult,’ because again, you still have a land auction and you still have to pay for all the buildings.

“Alex is committing his own money to do all that. He’s not asking for any public dollars to be part of the land purchase or be part of the development or the ongoing operations. So we quickly decided to revise our application. Instead of a roughly 200-acre parcel, we decided to submit a revised application on the southernmost parcel and that’s the process we’ve been in.” 

What did you make of the price set for this parcel?

Gutierrez: “It’s their process. They issue their own appraisal. They hire their own appraiser so the price is the price and that’s the opening bid.

“Alex is very committed to NHL hockey in Arizona. He’s very committed to this project. He is very committed to being the winning bidder because obviously, if there is not a successful or winning bid, then we will have to explore relocation of this franchise. There is no other option that we are exploring at this point.”

You have two other letters of intent on other parcels of land in the Valley, including one in Mesa. Are those still back-up plans?

Gutierrez: “There were multiple sites we were considering but we have now decided to only focus on this one. There is no other option that we are exploring at this point.

“The problem with the other ones was that, No. 1, the zoning was not in place. No. 2, the opportunity to potentially avail ourselves of the amusement park district legislation was not available.”

How will Alex pay for this; where does the money come from?

Gutierrez: “Alex has the assets that he’s designated for this that are very similar to the assets that he had designated for the Tempe project.”

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If you win the bid, do you foresee any potential roadblocks from unions, watchdog groups, citizen groups, etc.?

Gutierrez: “Anybody can always sue you for anything. That is out of our control, but this is an opportunity for us to execute on something without subjecting ourselves to a public referendum. Number one, it’s a public auction. Anybody can show up. There’s no deal we’re making with anybody other than we’re the applicant, we initiated the process, we are a bidder, we will be at the auction whatever day it is. And we are intending to be the winning bid. At that point, if you are the winning bidder, you have to close on the land and move forward.”

Do you have to put down a deposit before the bid?

Gutierrez: “Yes, there is a deposit that you submit shortly before the auction. If you are not the winning bid, it’s refundable. They’ll give you the exact number or percentage as part of the public auction notice. There’s some discretion sometimes in terms of the percentage of the deposit, but I know that will be a public number.”

Are you aware of any other groups, (either privately or publicly) that have expressed interest in that parcel of land?

Gutierrez: “No. I believe you won’t know until the day of the auction when they show up.”

If the Coyotes win the bid how quickly would the land ownership transfer? 

Gutierrez: “The ALSD and the Arizona Land Commissioner have sole discretion to proceed as they like in how to conduct the auction process guided by their regulations and procedures. We had discussed with them the option of a close at some point in the future following the land being awarded. It is our understanding that such a process is sometimes offered to other winning bidders—namely homebuilders. However, we have pivoted from those discussions, and believe the ASLD will proceed with their process to require a close 30 days following the bid being awarded.”

Will this site require an environmental impact study or an archaeological site assessment?

Gutierrez: “All that was done prior to the site being put up for auction. There is a series of things that had to get done even before it goes up for auction. We came up with a lot of work that had to be submitted as the applicant in order to get to an auction. That’s why it typically lasts longer. We spent the money to make sure we could get all of that done and get to an auction.”

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There have been reports (albeit less than knowledgeable reports) that this site is subject to floods. What will be done to mitigate the risk?

Gutierrez: “I don’t even know how to answer that. You do know there’s other development going on in that area, right? We will do what other developers have had to do is the only way to answer that. There’s a process and a solution. It’s that simple. “

In a best-case scenario, how quickly can you get shovels in the ground and what is the timeline for building the arena once shovels hit the ground?

Gutierrez: “What we are tracking is to be in the ground by the second quarter of next year; of 2025. This site still has all the uses we were planning in Tempe. It has an arena, a theater, a practice facility, 1,900 units of housing, it is zoned for two million square feet of commercial, which could be office, retail, all that. But we’re going to focus on building the arena first. We’re going to still build other uses, but the timeline focus is on the arena.

“The goal with the arena would be to try to be done so that we could drop the puck in the fall of 2027. By the way, if our remediation at the Tempe site lasted more than six months — which given that it was one and a half million tons of clean-up in an unlined landfill and in all likelihood was going to take us more than six months of remediation — this would have been the exact same move-in date. If you went from six months to 12 months of remediation at Tempe, that would have taken you to the end of the 2026-27 season, which means you drop the puck in the fall. In this instance, it’s the same timeline.”

What role would the City of Phoenix or even Maricopa County have in approvals after the land is purchased?

Gutierrez: “Nothing for the land or the zoning. It is zoned for the uses and obviously, we’re buying the land. We’re not asking for a development agreement from the city or the county or the state.

“We are going to explore utilizing the amusement park or theme park district legislation that was passed. And at that point, that’s its own sort of process. But that’s not going to impact whether or not we go and try to buy the land or whether or not we can build on it.”

What specifically does the zoning on this property allow? 

Gutierrez: “Everything that the Tempe site allowed and that I mentioned before. And this piece of land has by-right zoning of heights up to 190 feet (about 50 feet more than Tempe allowed). And it has zoning specifically for an indoor hockey arena. The reason for that is because the Legacy Sports Arena project that was going to be built in the northwest part of the I-17 is in the same zoning designation. It’s C-2 zoning and the C-2 zoning designation does also allow hospitality.”

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What improvements will need to be completed (water, sewer, flood control, streets, bus access)? 

Gutierrez: “Everything you mentioned. Again, this is raw land with no infrastructure.”

Are there any GPLETs included in this plan?

Gutierrez: “No.”

Have you been given any indication from the league to say, ‘Go forth with this. We’re not going to oppose this. We’re going to be supportive?’ 

Gutierrez: “I’m not going to speak for Gary Bettman. Gary can speak for himself, but every time we have shared our plans, there has never been any discussion other than ‘Move forward with your plans. We wish you the best of luck. Hopefully it works.’

“We’ve consistently shared with them the plans. We’ve shared with them the process. We’ve shared with them the timeline and we continue to move forward.”

PHNX also reached out to NHL commissioner Gary Bettman. Here is what he said.

Gary Bettman: “Obviously, we want a new arena and we want the team in Arizona. Alex wants to win the auction to make that happen.”

Is there any path for the Coyotes to make peace with NHLPA Executive Director Marty Walsh, who has been a vocal critic of the Coyotes’ continued presence at Mullett Arena, and the length of this process to find a permanent arena solution?

Gutierrez: “As far as Marty, I can tell you we don’t have a meeting schedule. He still hasn’t reached out and we haven’t received any requests for information. But again this is our plan. We’re committed to executing on this plan. We think this is the absolute right approach. It’s land that we can buy at public option. It’s zoned for all of our uses. There is no remediation. Yes, it will require a significant amount of infrastructure that we’ll have to bear but we have a path to move forward.”

“We’re happy to walk through the project with him, and walk through our plan. But this is the plan. This is the option. There is no other place that we can play in Arizona. We could go to Prescott but you understand why that’s not practical. And I hear wild speculation it actually wouldn’t cost that much or take that long to renovate Footprint Center. I’m going to listen to what my general contractor said. They’re saying it’s gonna take you at least two years, and cost you at least how much it cost them to renovate the arena in the previous renovation unless you want to be in a situation where you’re having a minimum of the same number of obstructed seats.”

There has been some speculation that you might reach out to Glendale about returning to Desert Diamond Arena (formerly Gila River Arena) as a temporary solution, or as a hybrid solution with some games played there and some at Mullett Arena — a similar arrangement to when the New York Islanders split games between Nassau Coliseum and Barclay’s Center. Is that a possibility?

Gutierrez: “Again, There is no other place that we can play in Arizona. If there is not a successful or winning bid, then we will have to explore relocation of this franchise.”

PHNX reached out to Glendale City manager Kevin Phelps for his thoughts on the Coyotes returning to Glendale on a temporary basis. Here is what he said.

Phelps: “To the best of my knowledge I’m not aware of any discussions between the Coyotes and the Desert Diamond Arena manager ASM on returning in one form or another to Glendale. From my perspective, the challenge would be the same. The amount of time and cost associated with putting down and maintaining NHL quality ice is significant. This would likely require the arena to block out a significant number of dates needed for other types of revenue generating events like concerts, etc. 

“I know there was skepticism from many in the media (and fans) when I stated that from a financial perspective we would be better off without the team than with. As you know, ASM has reported that fiscal year 2022 had the highest all-time net operating income ever, only to be shattered by more than $10 million in 2023. So from a purely business perspective, I’m guessing it would be a bit challenging to accommodate the Coyotes and continue to maintain the arena’s current financial situation. 

“Also, in [about a] week, I’m getting ready to show the city council and public the final design schematics for the $40 million that will be spent later this summer on the arena. Accommodating dates for the Coyotes during the remodeling would also add complexity to the discussion. But all of that said, if ASM negotiated an agreement with the Coyotes that they felt met the needs of the arena and city, I would rely on their decision.”

PHNX spoke to Phelps last month so the aforementioned meeting with city council has presumably occurred. Phelps also followed up with this.

“I did get a chance to talk to the general manager. The arena has sold off some of their ice-making equipment. It was outdated and eventually going to be illegal to use so I think it’s safe to say that it’s a rumor. He has not heard from the Coyotes about any type of such arrangement.”

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Would Alex Meruelo still want to purchase this land without an arena?

Gutierrez: “We haven’t looked at it without an arena because that’s what the land is zoned for.”

What do you want people to know about this pursuit?

Gutierrez: “It’s privately funded, we’re buying the land, we’re paying for all of the building. I want to be very clear so people understand. Alex is putting up the money to do this. He’s on the hook for it and that is not the case with any other building in the state of Arizona. That somehow got misconstrued even in Tempe. We were paying for it all. 

“In this case, we’re buying the land at an auction. We’re building all the buildings. We’re maintaining all the buildings. We’re not asking for a single dollar from taxpayers to do any of those things. I think it’s very important for people to understand that.”

What toll has this very public saga taken on the organization?

“Listen, it has been difficult. There’s been a lot of noise that has certainly impacted the organization. We’ve tried as much as possible to just stay the course, but it’s hard when you can’t necessarily address a lot of the critique. When we were dealing with the exit from Glendale, we were under an RFP to Tempe. It’s the same thing here. Why are we going to comment on a process when it’s a public auction process that has to play itself out? Why am I going to comment on an auction before there’s a public auction notice? 

“It’s very easy to get distracted by a lot of noise, but we’ve been very focused and committed. There was this narrative that we weren’t doing anything to make this happen, but a month after the Tempe vote, we submitted the application for a project to buy land that was zoned for all of our uses while not subjecting ourselves to a public referendum vote. A month! We were not idle.”

How have you tried to allay the concerns and fears of your own staff and your own team? You know that there’s been some public criticism that Alex hasn’t addressed the team and told them what’s happening.

Gutierrez: “We’ve tried as best as possible to continue to tell people that we are moving forward. As far as criticism,  there are things that people have concerns about and it’s understandable. It’s human nature when you don’t have certainty. Winning the Tempe vote would have been the best thing because we could have then moved forward and allayed all these fears. It didn’t work so we moved on and we did the work. That’s the best thing that we can try to do. 

“Now we’re here where we can be public about the plans, and we can get people excited about this very transformative project. It’s an opportunity to bring another professional sports team back to the city of Phoenix. Just as important, a professional sports team gets to stay in Arizona. But think of the economic impact for the City of Phoenix alone. You’re looking at over 10,000 new jobs, almost $600 million in taxes, and almost a $33 billion economic output. Almost 3 million new visitors. That’s a big deal.”

Top rendering of the Coyotes’ proposed arena and entertainment district in northeast Phoenix courtesy of Arizona Coyotes

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