The Coyotes will stay in Glendale another year. Can the city persuade the team to stay longer?
Jen Fifield
- The Arizona Coyotes renewed the team's lease at Gila River Arena for another year.
- Glendale wants to find a way to convince the Coyotes to stay in the arena long-term.
- Glendale might be willing to pay for future arena upgrades, if the Coyotes agree to stay.
Putting recent speculation to rest, the Arizona Coyotes announced the team will stay in Arizona, and in Glendale, another year.
The Coyotes renewed its lease at Gila River Arena with arena manager AEG Facilities on Dec. 20, said Rich Nairn, a team spokesman.
That means the team will play at the arena at least through the end of next season.
That's good news for Glendale and the West Valley said Glendale City Manager Kevin Phelps. The 43 home games a year bring patrons to the hotels, restaurants and shops in the city's sports and entertainment district, he said.
But a one-year lease does nothing to secure the team in the city, or the state, for the long term.
The team has looked to Phoenix and the East Valley in recent years, and there is speculation that the franchise will leave the state altogether, perhaps for Houston, if it doesn't get the investment it's looking for.
The lease renewal buys Glendale another year, Phelps said, to think about what the city can do to keep the team in the arena for years to come.
"Our goal will be to find a compelling reason for the Coyotes to stay in Glendale," he said.
What might that look like? Phelps said he's unsure. But he said he does know that the arena could benefit from upgrades, which would help the team bring in more revenue.
If the city gets a longer-term commitment from the Coyotes, Phelps said, the city may be willing to help pay.
Recent rumors of a move
The Coyotes have been on a year-to-year lease with the arena's management company, AEG Facilities, since 2016. The team managed the arena until 2015 when the city ended the team's management agreement.
The lease automatically renews every year on Dec. 31, unless the Coyotes cancel before then.
Coyotes officials have said in recent years that the team wants out of Gila River Arena. A bigger arena with more seating, the officials said, would allow for more ticket revenue.
Rumors about the Coyotes leaving the state altogether, for Houston, peaked last month when the National Hockey League announced that the Coyotes will move to the league's Central Division, from the Pacific Division, in two seasons, for the 2021-22 season.
To quell fans' anxiety, Coyotes President and CEO Ahron Cohen published a letter to fans on Tuesday renewing the team's commitment to the state. It's the team's goal, he wrote, to "achieve a long-term sustainable arena solution here in Arizona."
"Every potential investment opportunity we evaluate and every business deal we consider is predicated on making our franchise successful here in Arizona for decades to come," he wrote. "Arizona is our home. We love it here. And we love playing for you, the very best fans in the NHL."
Glendale needs long-term commitment
Even if the team's heart is set on Arizona, that doesn't mean much for Glendale.
The team announced in 2017 it was moving to Tempe, but that deal fell through. After that, the team considered Mesa.
Phoenix also studied whether Talking Stick Resort Arena, where the Suns play, could be used for hockey.
Even if the team agreed to stay in Glendale long-term, it might be a challenge to convince city taxpayers it's worth it to open their wallets again.
The city borrowed about $180 million to build the arena in 2003 and spent another $45 million to try to keep the team in the arena after the owner filed for bankruptcy and new owners were sought. The city then paid the new ownership $15 million to manage the arena in the first few years. The city is still paying off the arena debt, at about $13 million a year, until 2033.
Phelps said Glendale would need to build a case that shows that, for every dollar the city invests in arena upgrades, there will be a payback.
The city pays AEG $5.6 million annually to manage the arena, which is offset by shared arena revenue.
The city is losing less from the deal in recent years. Its net loss was $4 million two years ago and $3.92 million last year.
Upgrading Gila River Arena
The city has already shown a willingness to invest in the arena.
The city partnered with AEG and the Coyotes this summer to buy a larger video scoreboard for the arena. The city put in $1.55 million.
At the time, Dale Adams, who manages the arena for AEG, said in a statement that it was just the start of enhancements to come.
Also this summer, the city locked in the company as the arena's manager until 2026.
As part of that deal, AEG is upgrading the arena's lighting.
As far as future upgrades, Phelps said the arena could benefit from reconfigured suites, more club areas, enhanced and improved food and beverage service and more stores with merchandise.
"There are a number of things that could be done to help the revenue picture," he said.
Reach reporter Jen Fifield at 602-444-8763 or jen.fifield@azcentral.com. Follow her on Twitter @JenAFifield.
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