Economic Development

Voters Put Arizona Coyotes' Arena Project on Ice

A good example of why so few stadium deals end up on the ballot.


Voters cross-checked a proposed new stadium for the National Hockey League's Arizona Coyotes on Tuesday, rejecting all three ballot measures connected to the $2.1 billion development scheme.

Tempe, Arizona, residents had been asked whether they'd approve of an arena deal that included about 2,000 apartments and several commercial properties. The Tempe City Council had given preliminary approval for the project earlier this year but wisely handed off the final decision to the electorate. Though ballots are still being counted, the tallied results show an apparent defeat for the project, and the team's owner has conceded defeat, reports The Arizona Republic.

Tuesday's results might finally ice the years-long effort to build the Coyotes yet another taxpayer-funded stadium in the Phoenix area. The team arrived from Winnipeg, Manitoba, in 1996 and took up residence in the America West Arena (now known as the Talking Stick Resort Arena), which the city of Phoenix built in 1990 for $90 million for its professional basketball team, the Phoenix Suns. A few years later, the team and the NHL convinced the nearby city of Glendale, Arizona, to put up $155 million in bonds to build a new arena for the team. The Coyotes moved there in December 2003.

Glendale's experience with the Coyotes was not a pleasant one. After the Coyotes' previous owner put the team into bankruptcy in 2009, Glendale ended up paying the NHL $50 million over two years to keep the team from relocating. During that same period, the city had to lay off city workers, cut services, and raise taxes to close annual budget gaps. A new owner signed a 15-year lease with the city in 2013, but the city council voided that agreement in 2015, leaving the team without a permanent home. After the 2022 season, Glendale unceremoniously evicted the Coyotes, who played the current season in a 5,000-seat arena at Arizona State University.

Team owner Alex Meruelo and the NHL have spent the past few years trying to convince Tempe to finance a new arena for the team. The plan that eventually made it before voters would have cost the public $750 million in tax breaks and deferments. Meruelo backed the campaign for the arena with nearly $700,000 from his company. He also sent a cease-and-desist letter to arena opponents, demanding they stop calling him "corrupt" in campaign ads.

The fact that the opponents of the arena project prevailed despite being wildly outspent—by a margin of 35-1, according to the Republic—shows that voters generally think team owners ought to pay for their sporting palaces. The Tempe project came with all the usual promises about economic growth and new jobs, but people are wising up to the fact that those projections are consistently inaccurate. That's especially true when a team is trying to shift from one part of the Phoenix metro area to another—any "economic growth" generated by the new stadium in Tempe would have been merely redirected from Glendale.

The result also serves as a good reminder about why so few stadium projects go before voters. "Team owners would much rather deal directly with elected officials, who can be more easily, uh, let's go with 'influenced' by dropping a bunch of cash on lobbyists," writes stadium subsidy critic Neil deMause on his Field of Schemes blog.

With the Tempe deal frozen by voters, the future of the Coyotes is very much in doubt. The NHL understandably wants a team in the Phoenix region—one of the biggest media markets in the U.S.—but not enough to ask Meruelo to pay for his own damn stadium.