With Glendale already having put the Arizona Coyotes on alert that the city won’t be renewing the team’s lease at Gila River Arena after this season, the team’s move-out date may now be coming earlier than expected.
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Glendale threatens to evict Coyotes due to unpaid bills
NHL franchise has Dec. 20 deadline
Posted
The City of Glendale has serious concerns as to whether IceArizona [Coyotes ownership] is a going concern, able to meet its current and future financial obligations.”
With Glendale already having put the Arizona Coyotes on alert that the city won’t be renewing the team’s lease at Gila River Arena after this season, the team’s move-out date may now be coming earlier than expected.
City Manager Kevin Phelps on Wednesday sent a letter to Coyotes team president Xavier Gutierrez informing him that due to outstanding taxes and back rent in excess of $1.3 million — $250,000 of which is owed to the city — the Coyotes will be evicted from Gila River Arena, their home since 2003, by 5 p.m. Monday, Dec. 20.
The Coyotes are currently in last place in the Western Conference’s Central Division, and have a home game scheduled for Dec. 23 against Tampa Bay.
“The City of Glendale has serious concerns as to whether IceArizona [Coyotes ownership] is a going concern, able to meet its current and future financial obligations,” Phelps wrote in the letter dated Dec. 8.
Additionally, the letter says that arena manager ASM Global says there is an unpaid balance from the team for the 2020-2021 season.
The Arizona Department of Revenue on Thursday said it cannot provide comment on taxpayer information.
The city of Glendale owns Gila River Arena, at 9400 W. Maryland Ave., within the Westgate Entertainment District.
“We have already launched an investigation to determine how this could have happened and the initial indications are that it appears to be the result of an unfortunate human error,” the Coyotes said in a statement Wednesday night. “Regardless, we deeply regret the inconvenience this has caused. We will make sure by tomorrow morning, the Arizona Coyotes are current on all of our bills and owe no state or local taxes whatsoever. And we will take immediate steps to ensure nothing like this can ever possibly happen again.”
The city back in August, about two months before the start of the current season, announced that it would not renew its lease on Gila River Arena with the team beyond 2021-22. Phelps noted at the time that the city had interest in pursuing a long-term deal in the “15- to 18-year” range, and claimed that the Coyotes were interested only in shorter terms.
“So I was very clear,” Phelps told the Glendale Independent in August. “I had a phone conversation Dec. 29 [2020] with the leadership of the Coyotes and that issue came up, and the question was ‘If we’re not able to reach a long-term deal, are you saying that we would have to be out of the arena on June 30 of ’22?,’ and my response was ‘Yes.’”
In terms of what’s at stake financially, the city of Glendale makes debt payments on more than $120 million still owed on the arena’s original construction investment, and will do so through 2033. The city also has Los Angeles-based ASM Global on a contract to manage Gila River Arena.
According to financial data shared with the Glendale Independent by Lisette Camacho, the city’s Budget and Finance director, in July, the city pays ASM an annual management fee of $5.6 million. Revenue returns to the city from ASM if the arena is profitable, she noted of the profit-sharing arrangement.
Once all revenue and expenses are calculated from Gila River Arena’s lineup of concerts, family shows, private events and hockey events, Glendale over the past four fiscal years has received profit sharing funds of $1,621,508 (2017); $1,621,830 (2018); $1,669,660 (2019); and a COVID-impacted $836,546 (2020).
Phelps explained that when the Coyotes are no longer a Gila River Arena tenant, the city will replace the 41 home hockey nights with a push toward more concerts and similar big events, adding that the NHL has required the arena to hold “200 dates” in order to coordinate their season with each team in the league. That obligation, he explains, has hurt the arena’s ability to schedule other events beyond just the scheduled regular season home games.
He further noted that the city will work with ASM to refurbish the arena for future endeavors.
“It’s our hope to be under construction by the conclusion of the upcoming (2021-22) hockey season,” Phelps said in August.
The Coyotes, meanwhile, are working with the city of Tempe to develop a portion of land there into a new hockey arena and surrounding mixed-use entertainment district. It’s apparent, however, that no facility will be ready in time for hockey by the 2022-23 season, and the team indicated over the summer that it’s interested in staying at Gila River Arena on an interim basis while the Tempe project takes shape.
“We made it very clear to the city of Glendale ... that we were looking forward to extending our lease agreement with them for the next few seasons,” the team said in an August statement. “We have continued our discussions with Glendale in good faith and communicated with officials both verbally and in writing.”
The team also made clear that even if specific arena plans “beyond the 2021-22 season are not yet confirmed,” that the franchise is committed to staying in Arizona, which has been the Coyotes’ home for 26 years.
Steve Stockmar has been with the Independent Newsmedia team since 2017. An NAU alum and Peoria resident, Steve’s community journalism pursuits focus mostly on arts & culture, education, and profiles of neighbors making a difference. In his spare time Steve plays in a vintage baseball league using uniforms and rules from the 1860s, and also acts (badly) in community theater. In addition, he has an unhealthy obsession with baseball and the Chicago Cubs.
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