Arizona Coyotes’ vision: Create a ‘Deer District’ around proposed Tempe arena


The Valley’s National Hockey League franchise has been in search of a long-term arena solution for more than half a decade. That fix may finally be in focus.

The city of Tempe wants a professional sports team to develop 46 acres of city-owned land that is currently a solid waste compost yard into a stadium or arena and an entertainment district, and the Arizona Coyotes are itching to do it.

Tempe issued a request for proposals on July 22, seeking “any professional sports franchise or entity partnered with the franchise” to develop the northeast corner of Priest Drive and Rio Salado Parkway.

This deal isn’t just about a hockey rink. It would involve a huge mixed-use development.

A source with knowledge of the Coyotes thinking but asked for anonymity because of the completive nature of the bid process, told the Business Journal that the team is working on a “multibillion-dollar” proposal.

Two new NHL arenas are under construction now in Seattle and New York, both set to cost around $1 billion.


Privately funded


Arena deals, both locally and across the country, usually get pushback from politicians and citizens because tax dollars are used to build them. But the source said that won’t be the case for the Coyotes proposal. The whole project would be funded privately by team owner Alex Meruelo and his family.

Under the Coyote’s proposal, which is due on Aug. 19, the city of Tempe and its taxpayers will not have any financial responsibility or liability for the arena and surrounding district, the source told the Business Journal.

Meruelo has made his billions in the commercial real estate, hospitality and entertainment sectors. He owns two large hotels and casinos in Las Vegas and Reno, Nevada and the plan would be to create an entertainment district surrounding the arena on that same level. The source compared it to the Deer District in Milwaukee, which got a lot of attention the past few weeks as it was fill with tens of thousands of fans while the Bucks were in the NBA Finals against the Phoenix Suns.

The RFP issued by Tempe calls for a sports stadium or arena and practice facility, 1,000 residential units, 200,000 square feet of retail and restaurant space, and a large, shaded plaza with “numerous amenities.”

By making the district surrounding the arena a place where people will go 365 days a year, rather than just on game days, the team is gambling that the revenue generated from the retail and residential areas would help with paying off the debt the Coyotes and Meruelo would take on. With sports betting now in play in Arizona, it’s also likely that a sportsbook venue would be designed into the new arena.

Meruelo and the Coyotes will have some time to work on the proposal, if their plan is selected by Tempe. The city of Tempe has active operations on the site and said in the RFP that all proposals must allow for the city to relocate those operations to another location, no sooner than June 30, 2024. A new arena on the site may not be operational until 2026 or 2027 at the earliest.


New tax district?


The Coyotes have been in discussions with the city of Tempe for years about moving from Glendale to the East Valley city, but the RFP process is not the end. Not only will the city have to choose the Coyotes plan, but it must also be approved by Tempe City Council.

“Any eventual development agreement that results from any RFP must equate to the best deal possible for Tempe residents,” Tempe said in a statement. “The city exists to serve our residents and we take seriously our obligation to provide a safe, livable community in a fiscally responsible way. Any development agreement consideration process takes place in public at City Council meetings.”

During the 2021 legislative session, Valley attorney Nick Wood pushed for a bill that would allow sports teams to set up a so-called “theme park districts” to help fund stadium construction and renovations. Wood represented the Diamondbacks when discussing the bill at the State Capitol, but Wood has also represented the Coyotes for several years. The source familiar with the Coyotes plans said when the team was originally thinking things up that wasn’t an option, but now that it is, it is something Meruelo will be looking at.

Source: Phoenix Business Journal

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