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NHL’s Coyotes Clear City Hurdle to Fund $1.7B Arena Project After Tax Flap

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One of the obstacles that Arizona Coyotes collide in their quest to build $1.7 billion arena and the entertainment complex refutes rumors that owner Alex Meruelo does not have the financial means to fund the project privately.

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During a presentation at a meeting of the Tempe, Arizona city council earlier this month, club president Xavier Gutierrez cited letters from Meruelo and the Coyotes bankers, with whom they all did business.

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“It speaks to our ability to implement this proposal,” Gutiérrez said in an interview.

Gutierrez added that Meruelo himself has a banking license, a license to operate radio and television stations, owns two casinos in Nevada and the Coyotes Club.

“These are highly regulated industries,” Gutiérrez said.

“Alex Meruelo has been in business for almost 40 years. Despite numerous economic cycles or recessions, he has never been bankrupt, he has never been bankrupt. He bought companies out of bankruptcy.”

Coyotes were certainly a troubled asset when Meruelo bought them for $300 million in 2019.

The meeting, which continued into the late afternoon, ended with the board voting 5-2 to accept Coyotes’ request for proposals (RFP) to move forward and negotiate a deal that all parties hope will be finalized no later than the end of the year. If that happens, the City Council will once again vote on the parameters of the final agreement, and the Coyotes will target 2025-2026 as the first year in the new arena.

Gutiérrez and company are simultaneously negotiating a deal with Tempe officials and are seeking money from financial institutions to create a debt and equity structure that has yet to be determined to determine how Meruelo will pay for the project. Gutierrez mentioned Citi Bank, Bank of America, PNC and Comerica as possible partners.

The arena and training facility has a budget of $700 million for the first phase of a two-part development.

“There are no club funds. Let’s be clear, this is all Alex Meruelo,” Gutierrez said. “He is in charge of private development. Full responsibility for this. If we continue we will let [Tempe] have a direct connection with all our banks, all our financial institutions. We have nothing to hide. We are completely transparent. We are very confident in the financial resources that Alex Meruelo offers.”

There is public perception that the Coyotes are underfunded and struggling to pay their bills at times, especially after losing what Gutierrez called “tens of millions of dollars” after two seasons hit by COVID-19.

Gutierrez blames this perception on the city of Glendale and sour relationships. But there were other reasons as well.

Like any club in professional sports, the Coyotes are refunding members, sponsors and local media as games have been canceled or rescheduled due to COVID-19. The 56-game 2020–21 season was played to a small capacity at the now vacant Gila River Arena.

For those who chose not to attend games during the pandemic or seek refunds, the Coyotes had to make up those tickets last season, which was played amid contention with Glendale officials and the team cut on the ice to maximize the future of the draft. chooses.

Arizona has 10 options in the upcoming draft July 7-8 in Montreal, including a third overall pick and three in the first round. General manager Bill Armstrong can’t afford to miss any of them.

“Mistakes were made and we acknowledge them,” Gutierrez said. “There was no such thing that we were sitting on some kind of huge balance sheet.”

The most famous “mistake” occurred last December, when Athletic the first informed that the Coyotes owed 17 months of sales taxes to the City of Glendale and the State of Arizona totaling about $1.3 million .

The notice—a letter to the Coyotes that afternoon that appeared in the media—replete with threats to kick the club and all staff out of the arena if the debt was not repaid.

According to Gutierrez, the bill was paid in full the next day.

What happened behind the scenes that caused the confusion remains a matter of speculation. Until now.

As debts and refunds began to pile up after the NHL suspended the 2019-20 season on March 12, the Coyotes stopped making direct payments from their account to pay off monthly tax bills.

According to Gutierrez, the payments were not renewed due to an oversight.

“Our mistake,” Gutierrez said. “But what city doesn’t honestly pick up the phone and say, ‘Hey, it’s been 17 months and you haven’t paid your sales tax?’ Who does that?”

According to Gutierrez, by that time, Glendale had already abandoned the arena lease with the NHL club after the Coyotes refused to sign a 20-year lease extension. The team is set to play at the 5,000-seat arena on the Arizona campus for the next three seasons.

“We have reached the point of no return,” said Kevin Phelps, Glendale city manager. Athletic in August. “No hesitation.”

Commissioner Gary Bettman confirmed Gutierrez’ version of the situation during the press conference at the All-Star Game in Las Vegas. The Coyotes were told to sign a 20-year lease or “walk away,” Bettman said.

In fact, the Coyotes had no future in Glendale. They have played at the State Arena since its $220 million opening in the 2003–04 season and have never made it. A number of owners, including the NHL and Meruelo, could not make ends meet.

“The problem with the Glendale arena situation was that we had nothing,” Gutierrez said. “We didn’t own the parking lot or the billboards. Nothing.”

They were tenants simply paying rent.

“Where was the Grade A office around us?” he asked.

“This sets the stage for your corporate sponsors. Not just the branding guys, but those who buy the suites, the premium seats. West Valley is a thriving community primarily made up of residential, industrial, and logistics businesses. It’s fantastic, but it’s very difficult for an organization like ours.”

In the proposed new location, the Coyotes will have and plan to create this office space around them. The team and their financial partners will own everything in the entertainment district if the deal for the new arena is finalized.

Gutiérrez told Tempe City Council that Meruelo had the funds to fund the project.

Over the next few months, this will all play out.

Click here to read the full article.



Source: sports.yahoo.com

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