Tempe, Arizona, voters nix hockey arena development

Tempe voters rejected a $2.1 billion proposed entertainment district that included a hockey arena for the Arizona Coyotes and relied on bond financing to clean up a landfill on the site of the development. 

A three-part proposition the Tempe City Council required the team to place on the ballot lost with each measure getting only 43% or 44% of Tuesday's vote, according to the city.

"This is why we as a city council were determined to put these matters before voters so they could have their say, " Tempe Mayor Corey Woods said in a statement.

City of Tempe

Xavier A. Gutierrez, president and CEO of the team, which is currently playing in Arizona State University's 5,000-seat Mullett Arena, said the next step for the franchise will be evaluated by Coyotes' owners and the National Hockey League over the coming weeks.

The team's 27-year history in Arizona has been marked by ownership turmoil, arena uncertainties and losses — of both hockey games and money.

The pivot to Tempe came after the city of Glendale refused to renew the Coyotes' lease on their previous arena home.

In Tempe, the mostly privately financed mixed-use development on 46 acres of city-owned land was to include a 16,000-seat arena, a practice facility, two hotels, 350,000 square feet of office space, up to 1,995 residential units, a 3,000-seat music venue, and 300,000 square feet of retail space.

To initiate the site's transformation from a "landfill into a landmark," Tempe would have created a community facilities district to issue $210 million to $230 million of 30-year bonds to fund the removal of 1.5 million tons of garbage and hazardous waste, and to pay for public infrastructure.

The bonds would be paid with a portion of sales, property, and hotel tax revenue generated by the development, as well as a surcharge the developer would impose on all sales and taxable activities within the project.

A statement from the Tempe City Council said an opportunity for public input will be offered this fall "to begin creating a path forward for this important property."

Nearby Phoenix sued Tempe in March over the development's residential component, claiming it would be built under a Sky Harbor International Airport flight path in violation of an agreement.

"The outcome of the election does not change Tempe's obligations contained in the 1994 agreement," the Phoenix Aviation Department said in a statement, adding it hopes Tempe "will now take the necessary actions to resolve this dispute." 

The lawsuit and a subsequent formal notice of claim against Phoenix by the Tempe project developer, for $2.3 billion in damages, were disclosed in the preliminary official statement for a $96.5 million City of Phoenix Civic Improvement Corporation senior lien airport revenue refunding bond issue priced Tuesday by Barclays Capital.

Ahead of the deal, Moody's Investors Service upgraded the rating on the airport's senior-lien bonds to Aa2 from Aa3 and also lifted the A1 rating on junior-lien bonds to Aa3, citing Sky Harbor's improved air travel passenger base and Phoenix's growing and diversified economy.