Nixed Land Auction Puts Coyotes’ Future in Further Jeopardy

Nixed Land Auction Puts Coyotes’ Future in Further Jeopardy

The Arizona State Land Commission might have put the kibosh on what’s left of the Arizona Coyotes Friday, canceling an upcoming auction for land where the former team’s owners planned to build a $3 billion arena and entertainment complex in anticipation of a reborn franchise.

The auction for 95 acres of land in north Phoenix on the border of north Scottsdale was scheduled for Thursday at the starting price of $68.5 million. The commission said it has determined that owner Alex Meruelo must now seek a Special Use Permit to build an arena on that property, which is already zoned for such a purpose.

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“This unprecedented action seriously jeopardizes the future of NHL hockey returning to the desert,” the Coyotes, who were surprised by the decision, said in a statement.

That’s an understatement. The hockey operations and players were sold to Utah Jazz owner Ryan Smith for $1.2 billion a day after the end of the 2023-24 season and moved to Salt Lake City in a deal that closed June 13. The team has since been rechristened the Utah Hockey Club, for now, and will open play at the Delta Center in October.

Meruelo was paid $1 billion, but retained the trademarks, team name and rights to an expansion franchise if he can build a new arena that would be completed within five years. In that event, he would pay back the $1 billion to the NHL and start from scratch.

In the statement, the Coyotes threatened to explore “all of our legal options given this shortsighted decision by the State.”

But in fact, Meruelo’s option are very limited. He can’t sell his option to anyone else, NHL commissioner Gary Bettman said at a local press conference in April the day after the Coyotes played their final home game in Arizona. And if a series of dates pass without building the arena, Meruelo will lose those rights, and Arizona would be just another city in line for an expansion team.

In the interim since all that transpired, Phoenix mayor Kate Gallego told Meruelo she was not in favor of giving him any tax abatements to build a new facility. In particular, she isn’t interested in another arena in competition with the city-owned Footprint Center in downtown Phoenix, where the basketball Suns and Mercury play.

An insider with knowledge of the situation said he was now unsure what Meruelo and the NHL will do.

But the reality is this: The decision will cause another sizeable delay that could kill the deal completely.

“We understand the delay in an auction is a disappointment for our applicant and members of the public, but the change in timing is the prudent decision,” the commission said in rendering its decision.

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