Arizona Coyotes' new arena plans hinge on buying state land. What to know about the auction
After much anticipation, the auction date for land sought by the Arizona Coyotes has been set.
The team is under pressure from NHL leadership — not to mention their fans — to find a permanent home after a failed bid for a development in Tempe last year.
Owner Alex Meruelo, through a law firm, applied to buy state trust land last June, beginning a process that is nearing conclusion when the land will be sold at auction.
The sale of the roughly 100 acres of desert at the northwest corner of the Loop 101 and Scottsdale Road in Phoenix must follow a specific process because it is state trust land that is sold to fund public education in Arizona.
What's the latest?
The Arizona State Land Department on Thursday set the auction of the land for 11 a.m. June 27.
Ahead of the auction posting publicly, team President and CEO Xavier Gutierrez previewed the team's plans for the land.
Read more about the process to buy state trust land.
What are the Coyotes' plans?
Meruelo wants to build a massive, approximately $3 billion complex, according to Gutierrez. The plans are similar to what Meruelo envisioned in Tempe, before the voters there rejected the proposal last year.
The plans call for a 17,000-seat arena, more than three times the size of the Coyotes’ temporary home at Arizona State University, and a practice facility. There would be a restaurant and retail center, hotel, office space, a 3,500-person theater and 1,900 residential units.
The project also carries a roughly $100 million in infrastructure costs for things like roads and water and sewer lines, in Gutierrez's estimate. The State Land Department estimated the infrastructure cost would be at least $80 million.
What happens next?
The auction notice will be advertised publicly for 10 weeks.
Will the Coyotes win the auction?
Trust land must be sold to the "highest and best" bidder — and it remains to be determined if that will be the Coyotes.
Gutierrez said Meruelo is "fully committed to being the winning bidder.”
But auctions — even at a starting price of eight figures — can be competitive and lead to bidding wars that drive up the final cost. To participate, bidders have to show their financial capabilities by bringing a cashier's check for over $15 million made out to the Arizona State Land Department.
Bidding starts at the appraised value of $68.5 million and goes in increments of $100,000.
What if the Coyotes don't win?
Gutierrez said if Meruelo is not the winner, the franchise may relocate.
"And this is not — we're not threatening — this is just reality, that the NHL has made it very clear that this has to move forward or else we would have to look at other markets," Gutierrez said.
When would the team drop the puck in the new arena?
Construction could begin next year if the team is the winner. The arena would be open by late 2027 ahead of the hockey season, Gutierrez said. He said the team intended to negotiate with Arizona State University to extend its tenure at Mullett Arena until then.
How will the team pay for the development?
Gutierrez said the project would be privately funded, though that rang hollow among some critics.
That's because the team is likely to seek the creation of a special taxing district to help Meruelo finance the massive project. It would need Phoenix and Maricopa County to sign off. Called a theme park district, the area would be overseen by a board that can issue bonds to pay for construction and levy a tax on transactions to repay the bonds.
Gutierrez said the tax is more like a user fee because people choose to come to the district. And he said Meruelo could finance the project without the theme park district designation, which would be considered after the land auction.
But the power to tax transactions is much like the team sought in Tempe, where it also pursued a property tax break.
And importantly, the appetite among local leaders to create a special district for the Coyotes isn't yet clear. Those discussions could factor in Tempe voters' resounding rejection of the team's proposal there last year, and public opposition to taxpayer dollars supporting sports complexes nationally.
Reach reporter Stacey Barchenger at stacey.barchenger@arizonarepublic.com or 480-416-5669.
This article originally appeared on Arizona Republic: Arizona Coyotes new arena: What to know about state land auction
