What Tempe voters need to know about Props. 301, 302, 303: Coyotes arena and entertainment district
All eyes are on Tempe for the next month. Voters there are preparing to cast their ballots in a special election on three propositions that will decide the future of its last major piece of prized real estate — a 46-acre tract of land on the northwestern edge of the city within just 2 miles of Phoenix Sky Harbor Airport. Here's a closer look at the arguments for and against Propositions 301, 302 and 303.
The arguments for Propositions 301, 302 and 303
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The Arizona Coyotes and their owner’s development company are proposing a $2.1 billion deal that includes the construction of a new arena, along with high-end retail, upscale restaurants, boutique hotels and over 1,900 luxury residential units in Tempe.
Former Tempe City Council member and resident Pam Goronkin believes it will benefit the city and at little risk.
“The Coyotes are going to build this arena with their own money, not Tempe taxpayer dollars. I say that’s a big win," said Goronkin.
Goronkin, who served on the council from 2002 to 2006, is also a past president of the Downtown Tempe Authority. She feels it will complete the area that’s been in transition since the opening of Tempe Town Lake in 1999.
“I see it as a great addition, a great compliment to the downtown. I think it will really bring people together to have a home team to root for in the Coyotes. It will be a fantastic addition to what we have started and want to complete around Tempe Town Lake," Goronkin said.
Current Councilman Joel Navarro, who helped to negotiate the proposal with the team, says it’s an opportunity for Tempe to stand out.
“We want to be able to do our thing. We want to be able to maximize our opportunities within our city, and obviously this piece of ground where the Coyotes are planning to put this entertainment district is the best possible use of this property. It is a trash site. It is a dump right now,” Navarro said.
Navarro says revitalizing the site comes at little risk for the city’s 180,000 residents.
“It has to be dealt with in the future. And the fact that an NHL team is offering to do that for us, bonded out, not to any taxpayers in the city of Tempe, but just people who use the arena, I think it’s a big deal–it’s a great deal for us,” said Navarro.
The Coyotes say their proposal includes hundreds of thousands of square feet, filled with upscale retail and dining, a music venue, nearly 2,000 residential units, more than 500 hotel rooms, in addition to that16,000-seat home for the hockey team.
Coyotes Team President and CEO Xavier Gutierrez says they’ve thought of everything.
“It’s more than just a sports arena. You’re talking about an entire district, an urban redevelopment project, anchored by a sports arena. It’ll have hotels. It’ll have — and I hate to use LA references where I come from but — the Rodeo Drive of Arizona with high end shops and high dining that Tempe deserves and Tempe has been yearning for.”
The Coyotes, mostly under previous ownership groups, had an acrimonious relationship with the city of Glendale, which kicked them out of their arena after 19 seasons last year. They’re playing at least three seasons at Arizona State University's new 5,000 seat hockey arena on campus while they seek a permanent home.
“Obviously we have made a very significant commitment to be here on a temporary basis, to build what would be the first privately funded, sports and entertainment district in the history of Arizona.”
Things got so bad in Glendale that the Coyotes were accused of not paying rent at the city-owned facility.
Gutierrez says the club, whose majority owner is billionaire real estate, banking, media, restaurant and casino mogul Alex Meruelo, was stuck in an untenable position in the West Valley and that they’ve followed all the rules.
“We are a business, led by someone who has been in business for more than 40 years, that in up and down cycles has never had a business in bankruptcy, has never had a property come back and we’re in highly regulated businesses.”
Councilman Navarro says he has no compunctions about doing business with the Coyotes.
“It took a long time for this to happen. We got to a place now where I unequivocally say, this by far is a game changer, and I know other cities are going to model after this,” Navarro said.
Regardless of the upcoming vote, there’s one major obstruction that could render the results meaningless. The city of Phoenix is suing Tempe for violating a 1994 intergovernmental agreement over the residential component of the Coyotes project, claiming it’s too close to the nearby runway at Sky Harbor Airport.
“Yeah, you know that’s unfortunate. We want to be a partner with Sky Harbor and with Phoenix. We want to be able to champion a lot of this stuff. I think this is a regional thing having the Coyotes in town.”
The intergovernmental border battle echoes a legal fight from over 20 years ago. The Arizona Cardinals wanted to build their own stadium nearby, but at Phoenix’s urging, the Federal Aviation Administration said it was too close to Sky Harbor.
For former Councilwoman Goronkin, it smells of sour grapes.
“I think that they don’t want the competition for their own entertainment district in their downtown. I think they even have a site they would prefer for the Coyotes to build,” said Goronkin.
In response to the legal filing, the Coyotes and the firm they hired to develop the project, Bluebird LLC, are preparing to countersue the city of Phoenix. The hockey club filed a $2.3 billion notice of claim this month seeking damages for alleged breach of the intergovernmental agreement for not allowing the residential component.
Gutierriez says there’s no deal if there’s no housing.
“The risk is on us as a private developer. We’re the ones who are going to buy that land and hand over a $40 million non-refundable deposit the day we put a shovel in the ground. So, even if you’re concerned we’re gonna walk away, the city is $40 million richer. We’re not going to walk away because this is the project we wanted to build," said Gutierriez.
The arguments against Propositions 301, 302 and 303
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Tempe voters will see three propositions in a special election that concludes on May 17. The first is Proposition 301, which amends the city’s general plan for use of the property. The second, 302, allows for its rezoning. And the third, 303, gives the Arizona Coyotes the right to develop the 46-acre site for a new arena, an entertainment district, two boutique-style hotels and nearly 2,000 residential units.
Dawn Penich-Thacker has helped amplify the voices against the $2.1 billion project.
“It doesn’t address any of the challenges and priorities that we as residents have," Penich-Thacker said.
Penich-Thacker, a Tempe resident and communications executive, is opposed to handing over the land to the hockey club’s billionaire owner, Alex Meruelo.
“We are just worried about quality of life for our neighbors. We’re worried about transparency and accountability of our tax dollars and that’s why we’re speaking out. Because of course, they have endless promises and how much we’re gonna get from this and how great this is for us, but at the end of the day they came here to make money," said Penich-Thacker.
Lauren Kuby left the Tempe council last year. After serving two terms, she was familiar with the long negotiations with the Coyotes that resulted in next month’s propositions.
She says the team’s promise of private financing only goes so far.
“They’re maliciously misrepresenting the truth, shall we say. They’re saying it’s privately financed–they’re referring to the actual arena itself. But within and underneath the arena, you need all that infrastructure, right? And so, there are going to be taxes, hotel taxes, bed taxes, sales taxes going to pay for the infrastructure,” said Kuby.
Kuby, Senior Global Futures Scientist at ASU, says that residents will also pay, in the form of tax breaks for the developers.
“City taxpayers, the public, are going to be responsible for $740 million. A big chunk of that is that once the buildings are built, then they have relief of property taxes for up to 30 years, so that’s $500 million in itself. The other $240 million is the infrastructure to build the district," said Kuby.
Gayle Shanks is also a longtime resident and owner and co-founder of Changing Hands Bookstore, which has been in Tempe for nearly 50 years. She says she felt left in the dark.
“I didn’t find out that this whole project was even in the works for three-and-a-half years, and once I did find out, there were no public meetings," said Shanks.
Shanks says there are better uses for the city-owned compost yard near Rio Salado Parkway and Priest Drive.
“Honestly when I think about that property, the last piece of property we have left in Tempe, I want it to be something that brings the community together. I have never seen a more divisive issue,” Shanks said.
As for the benefit of possibly bringing more business to her bookshop?
“Oh, no. I mean I have been told that before. We had two Super Bowls in Tempe while I had my business downtown — we essentially went out of business for two-and-a-half weeks. It brought not one extra customer to my store. It brought not one extra customer to our store. It brought congestion and parking issues,” said Shanks.
Community activist May Tiwamangkala has other concerns. She says the promise of “Arizona’s Rodeo Drive” and million-dollar condos will only widen the wealth gap, especially in a college town like Tempe.
“The development would harm students and people on fixed incomes and people who are on low income or working class, just because when we see a lot of luxury entities coming up, housing prices increase,” Tiwamangkala said.
She’s also worried about the sportsbook gambling licenses that will also come along with the team.
“When you market it towards college students that are vulnerable with their finances that could create a huge crisis for our culture around ASU,” said Tiwamangkala.
And then there’s the issue of the residential part of the development being too close to Sky Harbor’s east runway — a very real danger, says Kuby.
“So, 2,000 units of luxury housing, I’ve heard the possibility of million-dollar condos? And imagine that at the top of that apartment building, 400 feet above — will be airplane wheels — I mean it is that close–and it is directly over the flight path," Kuby said.
In fact, the city of Phoenix is suing Tempe for violating an intergovernmental agreement over the residential component of the Coyotes project, claiming it’s too close to the runway. In response, the Coyotes and the firm they hired to develop the project, Bluebird LLC, are preparing to countersue, filing a $2.3 billion notice of claim this month seeking damages for alleged breach of that agreement.
It’s similar to an issue that sank the Cardinals’ plans to build a football stadium in Tempe more than 20 years ago and could render next month’s vote moot, no matter which way residents decide.
EDITOR'S NOTE: This story has been updated to correct the spelling of Gayle Shanks' name and Lauren Kuby's title at ASU.