Opponents of Tempe Entertainment District Caution Against Going Into Business With Billionaire

GLENDALE, AZ - AUGUST 01: President and CEO, Ahron Cohen, Majority Owner, Chairman & Governor, Alex Meruelo and General Manager, John Chayka of the Arizona Coyotes pose for a photo during a press conference introducing Alex at Gila River Arena on August 1, 2019 in Glendale, Arizona. (Photo by Norm Hall/NHLI via Getty Images)

By Jessica Swarner
April 4, 2023

Glendale Vice Mayor Joyce Clark said the Coyotes never seemed to pay their bills on time. 

This story is part two of a series about the proposed Tempe Entertainment District and the upcoming special election in May. Read part one here.

Last year, the city of Glendale threatened to lock the Arizona Coyotes hockey team out of their arena due to unpaid bills. 

Now, Tempe voters will have the chance next month to weigh in on three proposals that would pave the way for the Coyotes to build a new arena in their city. 

Billionaire Alex Meruelo, who owns the Arizona Coyotes hockey team, wants Tempe residents to allow him to build a $2.1 billion development at the northeast corner of Priest Drive and Rio Salado Parkway.

The project would include a new arena for the Coyotes, who are currently playing in Arizona State University’s Mullett Arena after the team left Glendale’s Desert Diamond Arena (at the time, called Gila River Arena) during last year’s season. The team had played in Glendale since the 2003-04 season. 

A volunteer group of residents called Tempe 1st is protesting the city’s proposal to do business with Meruelo, citing his thorny history in Glendale and the tax breaks he would receive as part of the developer agreement. Glendale officials are also sounding an alarm on the deal. 

What Happened in Glendale

Meruelo is a Cuban American who became the majority owner of the Coyotes in 2019. He is the first Latino majority owner of a team in National Hockey League history.  

Tempe Wins, a group sponsored by the project’s developer Bluebird Development LLC, states on its website that Meruelo has a 40-year history of business success and has never had a business go bankrupt. 

However, since Meruelo has been at the helm of the Coyotes, the team has endured a number of financial issues, including late payments and lawsuits over debts owed. 

Glendale announced in August 2021 it would not renew the team’s lease on the arena, forcing the Coyotes to leave the arena by the end of the 2021-22 season. The city and team had been operating on year-by-year agreements since 2016 as they tried to negotiate a longer-term deal. 

The month before, the city sent a letter obtained by The Athletic to the arena’s management company notifying them the Coyotes owed $1,462,792 to the arena, and more than $300,000 of that was more than four months late. The Coyotes attributed the unpaid bills to “human error” and promised to quickly pay their debts. 

But Glendale Vice Mayor Joyce Clark said the Coyotes never seemed to pay their bills on time. 

“[Meruleo’s] habit in practice with Glendale was they often questioned or disputed charges that Glendale had attributed to the Coyotes,” Clark told The Copper Courier. “And that would usually take months to negotiate, to come to agreement on what they actually owed.” 

Eight vendors that worked with the team told The Athletic the Coyotes failed to pay their bills on time or had negotiated what they owed to a lower amount. For example, Paradigm Ventures Southwest, the team’s private airline charter, sued for breach of contract claiming the team owed them nearly $300,000. A longtime employee also sued the organization for wage theft. 

Meruelo has also been sued for unpaid bills outside of the Coyotes. According to The Athletic, the SLS Las Vegas Resort and Casino he owned was sued by a public relations firm for not paying for the $22,000 worth of work it did. 

A Risky Relationship 

According to the Phoenix Business Journal, a report from financial analytics company Dun and Bradstreet rated the Coyotes as having “high” delinquency and risk scores. Former Tempe City Councilwoman Lauren Kuby shared that report at a council meeting during negotiations last year.

Kuby says now that it doesn’t make sense to her that while a tenant who didn’t pay their bills would be evicted and have the eviction on their record for seven years, she sees the Tempe Entertainment District deal as letting the Coyotes off the hook.  

“They have a terrible credit record, they don’t pay their bills, they don’t pay their rent,” Kuby said. “And the city is offering them this wonderful deal. And it’s just so ironic that the residents get shafted and the billionaire developer gets rewarded.”

Glendale City Manager Kevin Phelps said he felt there was a disconnect between how the city and team did business and set priorities when the Coyotes were in their arena. 

“In my mind, this was never a good match with the current ownership and leadership team with the way that we like to partner with stakeholders and people here in the business community here in Glendale,” he said. 

The Athletic investigation uncovered not only financial difficulties, but also problems within the culture of the Coyotes. The outlet stated many of the 50+ people interviewed for the story described the organization as a “toxic” workplace.

“That floors me that we’d be willing to really invest in a long-term relationship with a notorious out-of-state billionaire sports team owner and casino operator who has a very bad history dealing with our sister cities,” Kuby said. 

Clark cautioned Tempe voters to be aware of how things played out in Glendale when voting this May. 

“The Coyotes have had a very troubled history in Arizona,” she said. “I expect it will continue to be troubled. It just will be troubled with a new partner if the voters of Tempe approve that development.” 

On May 16, a citywide election in Tempe will decide the fate of the Tempe Entertainment District. Voters can vote to approve or block passage of:

  • Proposition 301, which amends the city’s General Plan to allow the land to be reclassified from “commercial” to “mixed-use.” 
  • Proposition 302, which amends the city’s zoning laws to allow for the building of the development. 
  • Proposition 303 authorizes Tempe Mayor Corey Woods to enter into the developer agreement with Bluebird Development LLC, owned by Coyotes owner Alex Meruelo.

For more information on voting, visit here.

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Author

  • Jessica Swarner

    Jessica Swarner is the community editor for The Copper Courier. She is an ASU alumna and previously worked at KTAR News 92.3 FM in Phoenix.

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