CXL - UPDATE 12/9 - Coyotes settle bills after unpaid taxes come to light

[Ernie]

I'm quite sorry. This discussion has compelled me to look more closely into the matter, and I have discovered both that I have had the wrong governmental entity and the incorrect details:

Good on you for correcting yourself and digging up all the details. This is the kind of discussion I'm here for.

 

[Pandemonia]

That's all speculation, too. In fact, all of this is really speculation....except that Meruelo responded to the RFP, and his proposal includes a 200M tax district. That is fact. The rest.......?????

Here's some more 'speculation'. I speculate that.....

I liked your speculation, as just speculation, but those figures on accumulated investment are staggering. No wonder so many people are thinking that the NHL is ready to announce they've had it with Arizona.

 

[gstommylee]

I liked your speculation, as just speculation, but those figures on accumulated investment are staggering. No wonder so many people are thinking that the NHL is ready to announce they've had it with Arizona.

And guess what none of us has actually seen the FULL detail of the proposal yet and also once the city council gets the hands on it, they can easily make changes to the agreement before approving of it.

Can we stop with the jumping to conclusions on what will happen or will not happen.

 

[Pandemonia]

And guess what none of us has actually seen the FULL detail of the proposal yet and also once the city council gets the hands on it, they can easily make changes to the agreement before approving of it.

Can we stop with the jumping to conclusions on what will happen or will not happen.

.

If we did that, eighty percent of the traffic here would disappear. Not sure that would keep the boards viable.

 

[TheLegend]

.

If we did that, eighty percent of the traffic here would disappear. Not sure that would keep the boards viable.

This thread has been a culmination of a jumbo jet filled with highjackers coming from dozens of different causes who all want to argue over steering the plane in their direction.

HFBoards survived quite well enough when this thread was on hiatus for several months. It’ll survive for a couple of months more without everyone wanting their turn in the pilot’s seat.

 

[Pandemonia]

This thread has been a culmination of a jumbo jet filled with highjackers coming from dozens of different causes who all want to argue over steering the plane in their direction.

HFBoards survived quite well enough when this thread was on hiatus for several months. It’ll survive for a couple of months more without everyone wanting their turn in the pilot’s seat.

Wow.

 

[MNNumbers]

Wow.

Legend is just offering his preference for the days when people discussed things like the actual proposal made to Tempe....

Rather than extensive consideration of Houston because some one put out a tweet which (although there is a very slight chance it is true) seems to have been speculation.

And, not only Houston, but many other places as well.

He's from Phoenix, you see. They have suffered for 10 years with every rumor, and people jumping to conclusions. It gets to you....

 

[Pandemonia]

Legend is just offering his preference for the days when people discussed things like the actual proposal made to Tempe....

Rather than extensive consideration of Houston because some one put out a tweet which (although there is a very slight chance it is true) seems to have been speculation.

And, not only Houston, but many other places as well.

He's from Phoenix, you see. They have suffered for 10 years with every rumor, and people jumping to conclusions. It gets to you....

And for how long have you been the mouthpiece for a legend?

 

[TheLegend]

And for how long have you been the mouthpiece for a legend?

MNN is from Minnesota. He’s already experienced losing a franchise once and nearly had the original Jets before they got dropped on Arizona.

Neither one of us needs to speak for each other.

We don’t always agree on some things but but we have a mutual respect for each other in that we both want to know what the actual facts are surrounding the Coyotes. Not the same recycled pontificating that often seems to make it in here.

That’s the real reason why I stepped away from here for 3 1/2 weeks. There was literally nothing to talk about in regards to the status of Meruelo’s proposal until Tempe hired a consultant the end of last month.

The Forbes article was an absolute joke. Two blogging buds sharing a tweet with no secondary confirmation (as a real journalist would have) nor contacting the team for comment before running with it. Not even the Houston media has bothered picking it up. To make it more comical the guy who wrote the article went on TSN1260 the next day and threw his pal (Mike Ozanian) under the bus telling the audience how Ozanian actually knows very little about the NHL and has virtually zero connections within.

Then mysteriously some anonymous guy claiming to be a paralegal signs up for Reddit (with a snarky screen name to boot) to post this long thread on r/Coyotes about all the doom and gloom facing Meruelo’s proposal citing both the Forbes article and the little trope from the FoS as if it’s a couple of smoking guns.

Wow indeed.

 

[gstommylee]

MNN is from Minnesota. He’s already experienced losing a franchise once and nearly had the original Jets before they got dropped on Arizona.

Neither one of us needs to speak for each other.

We don’t always agree on some things but but we have a mutual respect for each other in that we both want to know what the actual facts are surrounding the Coyotes. Not the same recycled pontificating that often seems to make it in here.

That’s the real reason why I stepped away from here for 3 1/2 weeks. There was literally nothing to talk about in regards to the status of Meruelo’s proposal until Tempe hired a consultant the end of last month.

The Forbes article was an absolute joke. Two blogging buds sharing a tweet with no secondary confirmation (as a real journalist would have) nor contacting the team for comment before running with it. Not even the Houston media has bothered picking it up. To make it more comical the guy who wrote the article went on TSN1260 the next day and threw his pal (Mike Ozanian) under the bus telling the audience how Ozanian actually knows very little about the NHL and has virtually zero connections within.

Then mysteriously some anonymous guy claiming to be a paralegal signs up for Reddit (with a snarky screen name to boot) to post this long thread on r/Coyotes about all the doom and gloom facing Meruelo’s proposal citing both the Forbes article and the little trope from the FoS as if it’s a couple of smoking guns.

Wow indeed.

FoS is only trashing it cause of the 200m that guy basically says all arena deals must be 100% private or trash to an extent.

 

[Fenway]

The Tempe proposal has merit but it certainly will not get green-lighted anytime soon.

The issue is NEXT season and the clock is ticking.

 

[voyageur]

That's all speculation, too. In fact, all of this is really speculation....except that Meruelo responded to the RFP, and his proposal includes a 200M tax district. That is fact. The rest.......?????

Here's some more 'speculation'. I speculate that.....
1- The pandemic is about to end because the Omicron is so easily transmissible that everyone will be exposed to it. It's also very mild, so very few will be very sick, and collectively that will cause government's to decide that it's just like the cold or the flu, and it's time to 'just live with it.'

2- I speculate that Tempe works. That would end all of this talk.

3- I speculate that, if not, the Coyote goes to Quebec, because there is no way to get him into Houston at this time, due to Fertitta only offering a low ball price, and the BOG not being willing for that, as much as the BOG would like to be there. No alignment changes, because these things move slowly.

4- Within 5 years, Ottawa goes away because of Melnyk, and by that time, things have moved in Houston, and the Senators move there. At this point, Houston and trade places in the alignment, and it's a nice neat picture.

Here is a spreadsheet with accumulated investment of Coyote ownership. The right column is at 7% interest.

	Yearly	Cumul	w/ inter
Aug 2013, IA purchases team for 170M (never mind the construction of the loans, this was the cost paid to NHL to purchase the team out of league ownership)		170
2013-14: IA admits to 35M losses, including a one time 15M buyout	35	205	216.9
14-15: No buyout, but perhaps larger losses due to cap increase	22	227	254.083
15-16: Barroway purchases. Original IA lease with Glendale cancelled. This costs another 4M. Plus cap increases	28	255	299.8688
16-17. Arena Management contract cancelled. Another 3M in losses. Plus cap increases. Minus 16M expansion fee	17	272	337.8596
17-18. No expansion fee. Cap increases	33	305	394.5098
18-19: Cap increases. Expansion fee from Seattle	15	320	437.1255
19-20: COVID. This is a total guess, but we'll give the team credit	20	340	487.7243
20-21: COVID effects, and we will again give the team credit	20	360	541.865

[TBODY] [/TBODY]

A proposal for an arena, and surrounding development at a price tag of $1.7 billion, to be funded by private investment, with Meruelo's net worth estimated at $2 billion. In a pandemic, with the Goldwater Institute a potential foe, do you give more credibility to this scheme, than any other arena scheme in the history of the Coyotes. Is this the one that finally works? Saves the Coyotes from massive debt, and turns them into a flagship franchise? That's speculation too, it seems. It really sounds like the NHL is casting one last time for the money tree in the Arizona desert.

 

[Fenway]

A proposal for an arena, and surrounding development at a price tag of $1.7 billion, to be funded by private investment, with Murello net worth estimated at $2 billion. In a pandemic, with the Goldwater Institute a potential foe, do you give more credibility to this scheme, than any other arena scheme in the history of the Coyotes. Is this the one that finally works? Saves the Coyotes from massive debt, and turns them into a flagship franchise? That's speculation too, it seems. It really sounds like the NHL is casting one last time for the money tree in the Arizona desert.

The sports betting license is the key - that isn't an option in Texas

 

[voyageur]

The sports betting license is the key - that isn't an option in Texas

I honestly have no idea what kind of revenues sports betting can make. Is it enough to make the team profitable? And how does Meruelo mitigate losing a venue like Glendale financially? Does the NHL have to bribe them to accept the Coyotes as tenants until construction is begun, and I would imagine will take until 2024-25 to complete? What's the end game there? What's Glendale's incentive to be a pawn?

 

[Fenway]

I honestly have no idea what kind of revenues sports betting can make. Is it enough to make the team profitable? And how does Meruelo mitigate losing a venue like Glendale financially? Does the NHL have to bribe them to accept the Coyotes as tenants until construction is begun, and I would imagine will take until 2024-25 to complete? What's the end game there?

What's Glendale's incentive to be a pawn?

Glendale has one priority - preventing a third arena in the market. It doesn't happen often but Chessmaster Bettman doesn't have control of the board.

 

[TheLegend]

The Tempe proposal has merit but it certainly will not get green-lighted anytime soon.

The issue is NEXT season and the clock is ticking.

Maybe not so much. Coyotes CEO Xavier Gutierrez said last week they were close to a solution but weren't ready to announce it. (See below for a hint)

A proposal for an arena, and surrounding development at a price tag of $1.7 billion, to be funded by private investment, with Meruelo's net worth estimated at $2 billion. In a pandemic, with the Goldwater Institute a potential foe, do you give more credibility to this scheme, than any other arena scheme in the history of the Coyotes. Is this the one that finally works? Saves the Coyotes from massive debt, and turns them into a flagship franchise? That's speculation too, it seems. It really sounds like the NHL is casting one last time for the money tree in the Arizona desert.

Goldwater has lost quite a bit of it's luster in AZ the past few years. It went from being the taxpayer's darling, to out of state obstructionist when it was exposed most of it's funding was coming from a small number of out of state interests (ie: "Dark Money".)

Besides..... the Diamondbacks were able to wrestle control of Chase Field (paid for by taxpayers) from Maricopa County and receive a special taxing district from the state (something the Coyotes were going for with the IA/ASU project but ran into all sorts of opposition from same source.) The district is worth nearly $500 million to the DBacks. And not a peep from Goldwater.

Because the wife of the managing controlling partner of the DBacks happens to sit on Goldwater's board of directors.

There is a rumor that Meruelo is close to an arrangement to use Chase Field as a short term solution until the new arena is completed. It would mean opening and closing the season with very long road trips due to season overlaps. And the word is Meruelo has been working with the league on it.

The Coyotes have had a good working relationship with the DBacks over the past several years. The two franchises hold cross promotions with each other during their regular seasons.

However.... this is based upon a rumor. Personally, it's something I'm not going to sweat over since it is what it is. But it's still an interesting angle.



The ultimate issue is still the City of Tempe.... and whether or not they decide to go to the next step once the consultant they hired submits their recommendation(s).

 

[TheLegend]

FoS is only trashing it cause of the 200m that guy basically says all arena deals must be 100% private or trash to an extent.

I use the term FoS (as in "full of....") for a good reason.

 

[TheLegend]

I honestly have no idea what kind of revenues sports betting can make. Is it enough to make the team profitable? And how does Meruelo mitigate losing a venue like Glendale financially? Does the NHL have to bribe them to accept the Coyotes as tenants until construction is begun, and I would imagine will take until 2024-25 to complete? What's the end game there? What's Glendale's incentive to be a pawn?

For the state's take they're estimating $252 million per year at maturity. That's with an 8% tax rate on OTC betting and 10% tax on mobile (which is where most of it is expected).

Not everyone is up to speed yet so the numbers are going to bounce around some.

 

[Ernie]

Legend is just offering his preference for the days when people discussed things like the actual proposal made to Tempe....

I don't disagree with this. I've said quite a few times this relocation discussion should have its own thread. It's a worthwhile discussion but you can't be discussing 8 different things in the same thread.

Perhaps in the CXLI thread the mods can adjust the first post to tell everyone to keep this in context and then create another relocation thread.

 

[MNNumbers]

A proposal for an arena, and surrounding development at a price tag of $1.7 billion, to be funded by private investment, with Meruelo's net worth estimated at $2 billion. In a pandemic, with the Goldwater Institute a potential foe, do you give more credibility to this scheme, than any other arena scheme in the history of the Coyotes. Is this the one that finally works? Saves the Coyotes from massive debt, and turns them into a flagship franchise? That's speculation too, it seems. It really sounds like the NHL is casting one last time for the money tree in the Arizona desert.

I got involved here because I learned a little about what was happening in the BK, and the league itself purchasing the team thereafter. But, especially, the thing that boiled my blood was the way that the NHL and IA handled the Glendale City Council for that 15M/yr lease. They stood right at the edge of ethical violations for a long time (and I am convinced they crossed the line as well), and in the end they thought they had what they wanted.

At that point I was so angry with the NHL and with IA.. So angry. I was so pleased when COG canceled the lease, and happier yet when COG hired someone else to run the arena. I was happy because the ownership of the team deserved what they got for the way they behaved at the beginning.

That is completely different than how I feel about hockey fans in the Phoenix Valley. I've felt bad for them the whole time, because they are connected to the team the same I was to the North Stars (I still think Dallas should be force to change its name, and the team in St Paul should take its rightful name back), and as I am to the Wild (did you see how Brodin and Dumba shut down McDavid last night). That has to really feel bad (for Coyote fans).

I don't really care if the team stays or leaves. They can lose as much money as they want to. It's not my money. The only thing I care about is that no municipality allows themselves to be taken for a ride again.

This proposal.....I'm figuring Meruelo think he can make it work. Maybe he has in mind to take the 200M, and build the arena, and let the rest of the development languish. That would be bad. That is specifically the reason I think that Tempe shouldn't gift him a penny. I don't know the tax laws in AZ, but I would write the deal from Tempe's perspective that the arena be build on private investment, and the 200M come back to the Bluebird organization later, AFTER the development is making money for Tempe.

Do I think fans will fill the new arena? No. Do I think there will ever be a fan base in Phoenix like the one in Mpls/ St Paul? No. But that's a different discussion.

 

[aqib]

That completely depends on availability of property for said arena, correct? I mean, when you think about it, it has taken a long time for Meruelo to find a city who had a parcel that would accommodate an arena.

So, that becomes part of the cost.

Now I haven't been to Houston since 2002 (I was there for a work project) so I don't know what the development landscape is like but given the growth of the city I imagine it could support 2 arenas a whole lot better than Phoenix can support 3. Minneapolis-St Paul has pulled it off and Houston has more people. If he is relying on private investors why wouldn't they consider Houston if they were willing to consider Tempe (assuming the are investing for return and out a sense of Arizona pride)?

 

[MNNumbers]

Now I haven't been to Houston since 2002 (I was there for a work project) so I don't know what the development landscape is like but given the growth of the city I imagine it could support 2 arenas a whole lot better than Phoenix can support 3. Minneapolis-St Paul has pulled it off and Houston has more people. If he is relying on private investors why wouldn't they consider Houston if they were willing to consider Tempe (assuming the are investing for return and out a sense of Arizona pride)?

I suppose that....

1- They have considered Houston.
2- The league doesn't want them to move to another market until they have exhausted all opportunities in Phoenix. This is clearly a good strategy by the league. You don't want cities thinking you might leave, or you'll never get any help in any form.
3- I think it's worthwhile to assume that in Tempe, there are certain advantages that may not be seen in Houston. Among these might be:
a) Free land (the site is available, and they don't need to buy it)
b) The city might offer tax incentives (200M please?)
c) Staying in Arizona allows you to keep the sportsbook license, since that is lost if you go to Texas.

 

[aqib]

This thread has been a culmination of a jumbo jet filled with highjackers coming from dozens of different causes who all want to argue over steering the plane in their direction.

HFBoards survived quite well enough when this thread was on hiatus for several months. It’ll survive for a couple of months more without everyone wanting their turn in the pilot’s seat.

To be fair the business board is pretty quiet when there isn't an arena/relocation possibility to toss around. Otherwise its just people throwing up "will Atlanta ever get another chance" (no) or "will there be an MLSE divorce" (also no).

 

[aqib]

I suppose that....

1- They have considered Houston.
2- The league doesn't want them to move to another market until they have exhausted all opportunities in Phoenix. This is clearly a good strategy by the league. You don't want cities thinking you might leave, or you'll never get any help in any form.
3- I think it's worthwhile to assume that in Tempe, there are certain advantages that may not be seen in Houston. Among these might be:
a) Free land (the site is available, and they don't need to buy it)
b) The city might offer tax incentives (200M please?)
c) Staying in Arizona allows you to keep the sportsbook license, since that is lost if you go to Texas.

Well when it comes the free land, they have remediate it so its not really "free" because you have to pay that portion. I agree with $200 million but again Houston is a bigger wealthier city so it may still be a better ROI. I know there is at least one person on this board who lives there so maybe he can comment on land prices. Again without knowing the cost of remediation we can't say if free land + $200 million in incentives makes up for whatever it would cost to buy land in Houston and the ROI on a Houston development.

Now when it comes to the sportsbook, I have wondered for a while if there will be enough sportsbook business once the novelty wears off to support multiple sports books. We saw with the expansion of casinos outside of Vegas and Atlantic City that the market was saturated very quickly and once the novelty wore off a lot of casinos struggled.

 

[aqib]

I use the term FoS (as in "full of....") for a good reason.

I agree with this. The guy basically carved out a living bashing every sports deal ever and never factors in local dynamics. I got into it with him when Missouri was trying to keep the Rams and showed that the annual bond payments in what the state offered (it was like $12 million) was very small in terms of the states budget (like over $30 billion) and would have been covered by just income tax on Rams players. He argued that people spending money elsewhere would result in jobs generating income taxes. People going out to dinner and movies isn't going to generate that much payroll.

On your other point about Forbes being trash. I agree with that as well. Once the old man died it went downhill.