Mayor, vice mayor offer thoughts on Coyotes’ proposed Tempe arena, entertainment district

Before the special Tempe City Council meeting on June 2, there was genuine concern about the fate of the Coyotes’ proposed arena and entertainment district along the south bank of the Salt River. Some insiders worried that the opposition was too strong, that the issues were too numerous and that the council was lacking the votes necessary to push the project forward.

Privately, Coyotes president and CEO Xavier Gutierrez kept cautioning that the team had yet to present its side of the story. When that opportunity finally came in a marathon council session that stretched deep into the night, the mood and local perception shifted well beyond the scope of the Coyotes’ devoted fan base. There was the sense from multiple council members that the Coyotes had presented their case well and had answered many questions.

When the council voted 5-2 to move forward on negotiations with the team, it was not a sign that the deal was a slam dunk. It just meant that negotiations would begin, but it was also clear that the mood for many had shifted from one of controversy and rancor to one of hope and interest.

As the city and team enter the next phase of this discussion, I caught up with Tempe Mayor Corey Woods and Tempe Vice Mayor Randy Keating to gauge their thoughts on the information presented so far, as well as the road ahead.

What convinced you to move forward with negotiations on the Coyotes’ proposed arena and entertainment district?

Woods: My perspective is that it’s always important to enter into negotiations to see if there is a deal that can be had. That was the first time that that proposal had been presented in public. I had only basically seen it once before so it was only really the second time the council was seeing it and it was the first time that members of our public had an opportunity to see it as well.

From a public transparency standpoint, I really want our residents to have an opportunity to really look at this deal and see what the proposal from the Coyotes is. I felt that if we didn’t move forward with the RFP that evening, that basically would mean our residents would get an hour- or two-hour presentation, and then the proposal would just be gone. They deserve to have their own time with it over the summer, to talk to their friends, talk to their neighbors, look at the details and specifics of the proposal, and frankly, make up their minds about what they think would be best for the city of Tempe moving forward. From my perspective, I want additional opportunities to speak with the Coyotes and their representation, and talk with our staff and talk with our residents to see if I think there’s a good deal that might be able to be reached for both sides of the situation. It never hurts to have a conversation and I thought it was important that we move forward so we can have that important conversation.

Keating: It certainly is a unique proposal. I don’t think anything like this has been done in the nation, to date, so it’s certainly worth exploring. There are definitely pain points which the city and the Coyotes need to work out, and that needs to be a fully transparent and public process. I will say this is intriguing but the city is certainly not interested in giving away the farm.

You have now had the opportunity to hear both sides of the airport issue after Coyotes attorney Nick Wood spoke at the council meeting. What is your sense of the IGA and the legality of residential units in this development?

Woods: I have a different view of the 1994 intergovernmental agreement than Phoenix Sky Harbor. I’ve had an opportunity to read over it myself and kind of do some analysis. Frankly, I’ve just sort of come to a different conclusion about what that IGA actually says, and a subsequent letter that was signed by the two mayors of Phoenix and Tempe at the time. I don’t believe that the multi-family housing is incompatible with what we could do within that area. I believe that single-family housing would be incompatible but not multi-family, especially if that multi-family housing has the right kind of sound mitigation when it comes to roof and building materials, windows and things of that nature.

We have the Hayden Ferry Lakeside condos that are directly adjacent to the Tempe Center for the Arts and right in the same general flight path. Those are million-dollar homes and the people who are there love living over there. There were even a couple of residents from those condos who actually came out during that meeting to speak in favor of moving forward with the RFP. They’re clearly also living in an area with a high amount of air travel, but they feel that it clearly is safe, and that it wouldn’t contribute to any kind of lowering of their property values or lowering of their quality of life. So I just have a feeling that if the Coyotes could actually talk about building something that really would meet the appropriate sound mitigation standards, I think that multi-family housing would be compatible in that area. I know that Sky Harbor has a different opinion, but once again, that’s where formal negotiations and conversations between all of these entities come into play. I think we should be able to sit down and talk about these things, and see if there’s some way that we can come to an agreement.

Keating: Well, it is certainly a lot muddier than the airport would have had us believe prior to that meeting. If the Coyotes are going to move forward with the residential, multi-family housing aspects of this project, they need to make sure that they’re meeting FAA requirements as far as quality of construction and sound dampening. The FAA wants to keep people within the 65-decibel range and lower, so while the FAA has said that this can be built, they’re going to have to strictly follow those regulations and I can tell you the city council expects that much.

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What is your sense of local residents’ sentiments and can their concerns be alleviated?

Woods: I think there clearly needs to be a traffic study done. On game nights, and even on non-game nights, you’re clearly going to have a surge in additional people visiting the area, watching the Coyotes play hockey, but at the same time, even on non-game nights, you’re talking about multi-family housing that would be there permanently. You’re talking about an entertainment district where people are going to be experiencing food and beverage options in that area so I would need to know what the traffic counts are going to look like on game nights and on non-game nights. There are people much smarter than me who do traffic engineering and understand exactly what the traffic counts would be and which direction the traffic would likely be flowing and how people who are coming in from out of town would be able to get off at the 202. One of the things that I personally talked about when I was running for mayor was trying to find a way to ensure that we can alleviate traffic concerns in our community and whatever developments we put in moving forward aren’t going to so negatively impact the quality of life for our residents that it would make the development itself incompatible.

There was a report from Dun & Bradstreet that did not offer a glowing report of Alex Meruelo’s financial situation. Does that concern you and how can you address those concerns with the Coyotes?

Woods: Dun and Bradstreet is definitely a reputable group so when I see a report like that it does raise some eyebrows. But at the same time, I think we have an obligation as a city to sit with the Coyotes and have that conversation about their finances, and get an opportunity to look at their books and their lenders and other items. When their president Xavier Gutierrez got up and spoke that evening, he said very publicly in front of me and the entire council and anyone sitting in the room and anyone watching at home that he’s very willing to open up the books and show everyone the finances to show that they have the ability to make a project of this magnitude actually happen. I absolutely am planning on taking him up on that offer.

The Dun and Bradstreet report is one report, but we have exceptional people on our team at the City of Tempe who do work in finances. We’ve also got other consultants that we’re working with as well who I’m confident, if we get an opportunity to look over all these items, can give myself and the council a formal recommendation about what they think.

Keating: I don’t know enough about the finances to know what’s a concern and what’s not, but what I do know, and what I’m very appreciative of is the Coyotes have said they will open their books to the city. With this vote to move forward with discussions, now we can start looking at the financial aspect to see if this is actually a concern. I have full faith in our city staff to do a diligent job and let us know at the end of the day if this is something that that makes sense or not.

Are you in favor of a labor agreement for this project; one that utilizes union workers?

Woods: I’m very supportive of companies and organizations working with skilled labor and apprenticeship programs. The Coyotes talked about how Alex Meruelo has four or five companies that already do a lot of work with union labor. They’ve got a lot of practical, on-the-ground experience when it comes to working with folks in skilled labor. We have a lot of folks who are electrical workers, pipe fitters, carpenters and workers in the service industry. We have a lot of exceptional people here in the state of Arizona, and in the city of Tempe, that it would be great for the Coyotes to partner with moving forward, should this development agreement actually get approved.

Keating: As I said in my public comments, I strongly feel that there needs to be a project labor agreement in place. This is a $2.1-billion construction project. It’s important to me and I believe our residents that the most skilled workers available work on this project. So project labor agreements, to me, are very important.

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What is your general view of the sports gambling piece of this proposal? The Coyotes have a license and right now will only operate an online app, but if this site is completed, a sports book would be part of it. Do you support that and have you reached out to the tribes for their thoughts, given its impact on them?

Woods: Sports gambling is a legal venture, but at the same time, I would want to make sure that we are talking with our tribal partners about this as well. They are very supportive of us in terms of gaming grants every year in partnership with the City of Tempe and all of the communities, frankly, throughout the state of Arizona. So in terms of us wanting to continue to preserve a good relationship with them, which we absolutely have at the City of Tempe, I would want to make sure to really formally engage them in conversation so they understand exactly what’s contained in this deal because their opinions and their thoughts are extremely valuable to me, and to all members of our city council. If we were able to get to an agreement, I would also want them to be comfortable.

Keating: I would like to get buy in from the local tribes. I know that’s been a concern with some of the council members. I want to make sure that we’re being the best possible partner that we can be to the tribes that surround our city as well. We did have a tribe write in a letter of support so I know that there are discussions going on of how the Coyotes and the tribes can be a partner with the City of Tempe on this, should it move forward. I want to see that process continue. At the end of the day, we need to have something that everyone is happy about with regards to not only the Coyotes arena, but gaming near the Coyotes arena specifically. There’s such a thing as being a good neighbor. There’s certain behaviors that while you’re allowed to do them and have been told you can do them, they still upset those around you. For the Coyotes to make sure they get buy-in from the tribes, I think it would be very helpful for city leaders and for the overall situation. This is a big project and it’s a big deal. We don’t want anyone to feel like they were left out at any stage along the way.

Arizona State University is the largest employer in Tempe. Given ASU’s existing partnership with the Coyotes at the multi-purpose arena, and the men’s and women’s basketball programs’ interest in potentially playing at the new arena, how does ASU factor into all of this?

Keating: The Coyotes and ASU can have a symbiotic relationship in the same way that the City of Tempe and ASU have a symbiotic relationship. I think there is a path for ASU, the City of Tempe and the Coyotes and all the stakeholders all come to an agreement that benefits everybody.

Is there a timeframe in which you would like to see a decision made on this proposal?

Woods: I would really like to have this wrapped up by the fall; really by the end of 2022 at the absolute latest. The reality is, this is obviously a very big project, potentially a game-changing project for the City of Tempe and, I frankly think, the region, but at the same time we also have a ton of other work going on and I have a lot of other priorities, as do the other six members of our council. We want to make sure that the debate and the negotiations aren’t going on for so long that it’s going to detract from other things that we need to do as a city and as a community.

Keating: I would like to see something up for a public vote, certainly before the holiday season, but I would prefer that it happen in the month of October at the latest.

What are the possibilities with such a development?

Woods: I personally don’t allow myself to go to that place because it’s so early in the negotiations that I feel like it’s very important for me to maintain a neutral, impartial position on all of this while I do the kind of due diligence I need to do in my role that I know all the other council members take very seriously as well. We were all tasked with the huge responsibility of vetting these deals. I need to come at the deal with an open mind and quickly get a sense as to what my priorities are and what I’m able to accept or what I would be unwilling or unable to accept, and see if those values align. At the end of the day, if there’s a deal to be had between the Coyotes and the City of Tempe, we would be happy to try to make something like that work, but the terms have to be something that are truly favorable to what we’re trying to accomplish.

Keating: I think it is a very thrilling possibility for the long-term benefits to the city. We don’t know what the future holds, but I do believe that if you build it they will come.

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