Just two months after the owner of the Arizona Coyotes sold the team to a Salt Lake City businessman, team officials say the future of hockey in Arizona is in serious jeopardy.
The Arizona State Land Department announced Friday that it has withdrawn from auction a piece of desert land north of Phoenix that hockey team owner Alex Merullo was considering for a new arena.
“It is in the trust's best interests to stop the auction and restart the process,” the department said in a news release.
According to the ministry, the proposed development requires a special use permit, and the ministry is now requiring the applicant, Coyotes, to obtain that permit before purchasing the land.
The NHL franchise had been looking at a site totaling about 100 acres, west of Scottsdale Road in Loop 101, as a possible site for an arena and mixed-use development. The land was put up for auction on June 27, with the opening bid being $68.5 million.
The Coyotes issued a stern statement about the auction being canceled, saying it “seriously jeopardizes the future of NHL hockey returning to the desert.”
The team said it had met all legal obligations and that the cancellation was a “unilateral” move by police in response to the Coyotes' objections.
“Our organization worked in good faith with ASLD and was on track to win next week's auction until ASLD abruptly reversed course today,” the team said in a statement.
The statement said canceling the auction would mean the state would lose “millions, and potentially billions, of dollars that would have gone directly to primary and secondary education.”
“The Arizona Coyotes are exploring all legal options following this shortsighted decision by the state,” the statement said.
City of Phoenix spokeswoman Terea Galaviz said the Bureau of Land Management sought an interpretation of the site's zoning, and the city determined that the existing zoning doesn't allow for a sports arena. Building an arena would require “special permit approval through the rezoning process,” she said. A rezoning is a process that changes the uses allowed on a site and can require several public hearings and take several months.
Galaviz said the Coyotes have not yet submitted a special use permit application, but “we look forward to receiving the application and working with the team through the process.”
A spokesman for the state Land Office had earlier said the team needed city approval to move forward.
“We understand that postponing the auction will be disappointing for the applicant and the public, but the change in timing is a prudent decision for the trust,” a department spokesperson said in a press release. The trust “remains open to working with the applicant to auction the land in the future, if a special use permit is granted.”
Phoenix City Councilman Jim Waring, whose city the proposed arena would be located, said Friday that the Coyotes “should hire a zoning attorney. They don't have one. They should go to the city, make a plan, go through the process and then buy it.”
Staff for Phoenix City Councilman Kevin Robinson, whose 6th District doesn't include the site, slammed the Coyotes' statements and intentions on Twitter.
“You idiots have never worked in good faith. No one trusts you and no one wants to work with you,” Jack Keaney wrote. “Years of misdeeds mean you have to jump through some hoops to earn trust back. And instead you take to Twitter to complain.”
Although the land is in Phoenix, it sits along the border with Scottsdale, whose mayor has also publicly criticized the project.
Scottsdale Mayor David Ortega said Friday that he had previously raised “questionable building permit eligibility” for the site.
“Mr. Meruelo's fantasy hockey proposal was just a smokescreen for Mr. Meruelo, who retired after running the franchise,” Ortega said in a text message. He also criticized Mr. Meruelo's intention to seek a “theme park district” designation as a way to raise development funds. However, Phoenix Mayor Kate Gallego has previously said she has no interest in granting tax incentives like a theme park district.
Merullo sold the team's hockey assets to Utah Jazz owner Ryan Smith in April but retained the Coyotes name and trademark with the intention of adding another team in Arizona. The NHL gave Merullo five years to build an arena suitable for professional hockey in order to get approval to add a team.
Under the agreement, Meruelo can only partner on a maximum of 20% of the project and must retain the majority of his ownership.
NHL Commissioner Gary Bettman said in April that the league would need about 18 months' notice to reinstate franchises and that he would be closely monitoring milestones the project needed to reach, particularly the physical progress of the building. Merullo said at the time that he was committed to winning the auction.
The team has released proposed renderings of an arena and mixed-use district surrounding the new facility, which would include restaurants, retail, a hotel, office space, a 3,500-seat theater and 1,900 residential units.
When the team's move to Salt Lake City was announced, Bettman said it had become clear the Coyotes had been playing at Arizona State University's Mallet Arena for too long for the NHL's preferences.
“It's a good facility for a college rink, but it's not a major league facility,” Bettman said at the time.
The average NHL career lasts four to five years, so Bettman said it's unfair for a pro player to potentially play his entire career on a college field.
Republic reporter Sam Kumac contributed to this article.
This is an evolving story, check back here for updates.
