Arizona hockey team’s move to Utah may spark bond sales in both places

Bonds

The recently announced sale of the National Hockey League’s Arizona Coyotes and the team’s move to Utah could lead to bond issuances for arena projects in both states. 

Under a plan approved by the NHL Board of Governors last week, the team, which had been unable to secure a permanent arena in Arizona, was sold to the Smith Entertainment Group and relocated to Salt Lake City, while Coyotes’ former owner Alex Meruelo was granted the right to reactivate the franchise if a state-of-the-art hockey arena is constructed within five years.

Ryan Smith, whose company already owns the National Basketball Association’s Utah Jazz, told reporters at an NHL press conference Friday he is seeking to renovate the Delta Center in downtown Salt Lake City to accommodate both sports.  

The owner of Utah’s NHL franchise plans a bond-financed rebuild of the Delta Center arena in Salt Lake City that will improve the sightlines for hockey spectators.

NHLinUtah.com

“We want it all to be together and we want it downtown,” he said, noting the Delta Center “has good bones.”

The as-yet-unnamed former Coyotes will play next season in the Delta Center, but the building’s basketball-first layout means many seats have obstructed views of the hockey ice surface, which is twice as long as a basketball court.

A bill signed into law last month by Utah Gov. Spencer Cox creates a Capital City Revitalization Zone in the downtown area and authorizes bond issuance for arena construction or remodeling to accommodate a NHL team.

The law gives Salt Lake City the option to add up to 0.5% to its 7.75% sales tax for no more than 30 years to fund an arena project and infrastructure within the zone and provides oversight through a Revitalization Zone Committee made up of four state lawmakers and an appointee by the governor.

“It’s going to take the county, it’s going to take the city from a tax standpoint but we’ll generate a lot of revenue,” Smith said. “I think down the road everyone will look back and go ‘wow like at a time when we needed to revitalize and reimagine (downtown Salt Lake City) we invested and it worked out.'” 

Salt Lake City Mayor Erin Mendenhall called the team’s move a defining moment in the city’s trajectory. 

“This is the beginning of a new era that will generate exciting opportunities for our communities, amplify pride and unlock new potential in our downtown core,” she said in a statement.

Meanwhile, Meruelo is pushing ahead to meet the NHL’s deadline to return professional hockey to Arizona, starting with a plan to bid on land in north Phoenix at an Arizona State Land Department June auction.

“My goal will be to build a first-class sports and entertainment district without seeking financial support from the public,” Meruelo said at a separate NHL press conference. “No taxpayer dollars, no tax breaks.” 

But the Arizona Republic reported Friday that Meruelo is looking to build a 17,000-seat arena as part of a theme park district that would allow for the sale of bonds backed by a sales tax surcharge collected in the district to help fund the development under a 2021 state law.

“This is the beginning of a new era that will generate exciting opportunities for our communities, amplify pride and unlock new potential in our downtown core,” Salt Lake City Mayor Erin Mendenhall said in a statement.

City of Salt Lake City

Meruelo Group did not return a call requesting information about the arena plan.

After a troubled stay in Glendale, Arizona, the team relocated to Tempe, where it temporarily played in Arizona State University’s 5,000-seat Mullett Arena since the 2022-23 season as a new, larger facility was sought.

Tempe voters last year rejected Meruelo’s proposed $2.1 billion entertainment district that included a 16,000-seat hockey arena. The financing plan called for as much as $230 million of 30-year bonds to pay for a landfill cleanup.

The Coyotes were launched after the franchise moved from Winnipeg, Canada, in 1996. In 27 seasons in the desert, the team had seven owners, including the NHL itself after one owner put the team into bankruptcy, and only qualified for the playoffs nine times, with only one appearance since 2012.

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