Craig Harris

The Republic | azcentral.com

NHL commissioner urged lawmakers to pass $225 million in public funding for new arena

Commissioner, Arizona Coyotes said the team will leave if it doesn't get a new Valley arena

The Arizona Coyotes and National Hockey League Commissioner Gary Bettman on Tuesday threatened to move the franchise out of Arizona if the Legislature does not approve $225 million in public financing for a new arena in downtown Phoenix or the East Valley.

Bettman sent a three-page letter to state Senate President Steve Yarbrough and House Speaker J.D. Mesnard encouraging them to push through a public-financing bill that is stalled in the Senate amid a lack of support from lawmakers. The struggling NHL franchise wants out of Glendale, saying it's not economically viable to play there even though that West Valley city financed its 13-year-old Gila River Arena specifically for the Coyotes.

"The Arizona Coyotes must have a new arena location to succeed," Bettman wrote. "The Coyotes cannot and will not remain in Glendale."

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Team owner Andrew Barroway also issued a statement saying Glendale no longer is an option because the team loses tens of millions of dollars playing in Gila River Arena. He added that if the team reaches a point where "there is simply no longer a path forward in Arizona," then "we will work with our partners in the league office and across the NHL to determine our next steps."

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The team is contractually obligated to play in Glendale for one more season. Glendale officials have said they want to keep the franchise in their city.

Yarbrough told The Arizona Republic that Senate Bill 1149, legislation that would provide arena financing, doesn't have the votes to pass. Mesnard, in a statement, agreed.

"While I very much want to see the Coyotes remain in Arizona, what they're asking for is no small thing," Mesnard said. "The NHL first needs to make the case for a state-funded arena to the taxpayers. We're not seeing a lot of enthusiasm that the public wants to foot the bill for a new arena, and until the NHL can win over taxpayers, they’re going to have a tough sell at the Legislature."

Sen. Bob Worsley, R-Mesa, has sponsored a bill that would create a community engagement district of up to 30 acres for an arena. Within the district, up to half of the state's share of sales taxes generated from retail sales and hotel stays would be dedicated to paying the bond debt for an arena. It also would allow an additional 2 percent district sales tax to be applied to all purchases within the district, with those revenues also dedicated to defraying the cost of new facility construction.

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The Coyotes have pledged to pay $170 million toward what is envisioned as a $395 million project. The team also would control the retail development and hotel within the engagement district.

While Bettman told lawmakers in his letter that Gila River Arena is not economically capable of supporting a successful NHL franchise, in 2009 he intervened to keep the team in Glendale. That's when prior owner Jerry Moyes tried to sell the team through a bankruptcy filing, and the new prospective owner wanted to move the team to southern Ontario, Canada.

At the time, Bettman said the team "with new ownership and with the accommodations the city of Glendale is prepared to make, we think can succeed."

Glendale then paid the NHL $50 million in subsidies to cover team operating losses from 2010 to 2013. The city later awarded an annual $15 million arena management fee to the Coyotes. The city terminated that contract in 2015 and later hired another manager to run the arena for roughly one-third the cost.

Without the subsidies, the team says it can no longer play in Glendale.

Reach the reporter at craig.harris@arizonarepublic.com or 602-444-8478.