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Posted Apr 1, 2024, 10:00 PM
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AZ legislation could help Coyotes arena financing, bring new soccer stadium to Valley
https://www.bizjournals.com/phoenix/...a-coyotes.html
Quote:
A former Arizona Coyotes executive is endorsing state legislation that he hopes will help a group unconnected to the team build a mixed-use development near Mesa that could include a professional soccer stadium.
If passed, the bill could also help his former employer finance a mixed-use development in Phoenix by cutting the city out of the process.
Nick Sakiewicz, who served as chief business officer of the Coyotes from March 2022 through December 2023, testified last month in front of the Arizona Senate Government Committee in support of a strike-everything amendment to House Bill 2274, introduced by state Sen. Jake Hoffman. A strike-everything amendment replaces the entire text of a previously introduced bill with new language, possibly on a different topic altogether, to circumvent a deadline for the introduction of new legislation.
If enacted, the legislation would change the rules for the establishment of a theme park district, a type of “special taxing district” that can levy sales tax of up to 9% on purchases made within its bounds. A developer can use those proceeds to service construction-related debt.
The bill, which the committee recommended to the full Senate by a 4-2 vote, would allow a county to establish such a district without city government approval. It would also allow more than one theme park district in a county. The bill has not been placed on the Senate floor calendar. If passed by the Senate, the bill would require House approval and sign-off from Gov. Katie Hobbs.
Sakiewicz and the Coyotes each said there is no connection between Sakiewicz's support of the bill and the club's plans to build a mixed-use development, which would include a new arena, in northeast Phoenix.
Could Mesa project lure MLS, NWSL?
Sakiewicz, who currently serves as CEO of the USL Hartford United and a partner in player development firm Global Football Group, identified himself to the committee as co-chair of a consortium – Pinebrook TNAC LLC – planning to build a mixed-use development on roughly 200 acres of unincorporated land outside Mesa that could potentially be anchored by a stadium suitable for professional soccer.
The consortium includes Boston-based private equity investment firm The Pinebrook Group, which are the master developers, as well as TNAC Holdings, which includes Sakiewicz, GFG CEO David Goldstein and former MLB and NHL player agent Terry Bross as investors.
Sakiewicz told Sports Business Journal following his testimony that The Pinebrook Group Managing Partners Malachy Burke and J.B. Gough plan on talking to MLS and the NWSL about the possibility of bringing expansion franchises to the property.
“It's perfect timing for one of those or both of those leagues to land here,” Sakiewicz told the committee.
MLS did not respond to a request for comment on potential expansion to the Phoenix area. An NWSL spokesperson acknowledged the league is working with Inner Circle Sports to sell a 16th expansion franchise that would join the league alongside Boston in 2026 but did not address whether Phoenix is under consideration.
Sakiewicz added that Phoenix Rising, a USL Championship team playing in a temporary facility, could also be a potential tenant or partner, and that the venue could also host international matches. The Rising did not respond to a request for comment.
Sakiewicz noted plans for the site, currently a gravel pit owned by Johnson-Stewart Materials, are still fluid and that the inclusion of a soccer stadium is just one possibility. Other elements under consideration include a 7,000-8,000-seat theater, retail stores, restaurants and housing.
Could the bill benefit the Coyotes?
Sakiewicz is no longer employed by the Coyotes – he left the team in December to go back into soccer – but his support of the bill comes as the NHL franchise pursues a 110-acre tract of land in northeast Phoenix to establish a long-term home in the Valley. An auction notice is expected to be posted this week with a minimum bid of $68.5 million. Based on that timeline, the land would be awarded to the top bidder in June.
The Coyotes have yet to announce details of their plans for the property, which is adjacent to Scottsdale, but accidentally leaked a series of renderings in March via their mobile app, depicting an arena-anchored mixed-use development designed by Gensler.
Coyotes President and CEO Xavier Gutierrez told SBJ the team has have nothing to do with the bill introduced by Hoffman, but the team will explore the establishment of a theme park district if it wins the land auction. He added the mechanism to establish such a district for a sports facility is already on the books – the D-backs spearheaded that legislative effort in 2021. The Coyotes have not assessed whether the proposed changes would make the process easier.
"We have absolutely no connection, nor do we have any interest in being involved, with this legislation,” Gutierrez said.
Under the current law, Maricopa County and the City of Phoenix both would need to be on board with the establishment of the theme park district. If the bill is enacted, only approval from Maricopa County would be required.
This is significant because Phoenix’s lease of the city-owned Footprint Center to the Phoenix Suns prohibits the city from providing any economic assistance to a competing facility. The Suns declined to comment on whether they believe the city’s involvement in the establishment of a theme park district for the Coyotes would violate the lease agreement. Lease language aside, multiple sources suggested Phoenix might be reluctant to sign off on a mechanism that would help the Coyotes finance an entertainment district that has the potential to take away business from its downtown arena.
Outstanding amendment raises questions
Thomas Dorn, a lobbyist for the City of Phoenix, said during the meeting that the city is “neutral” toward the proposed legislation and specifically objected to the language that “removes the city from the decision-making process.” He said the bill was awaiting an amendment that would “strike all the new language that would have removed the city,” at which point the city could support the bill. Such a change would seemingly blunt the bill’s impact.
Dorn, who did not respond to multiple requests for comment, added during the meeting that the amendment would also seek to reduce the population threshold for a city in which a theme park district could be established from 1 million to 500,000. This would ensure Sakiewicz’ group could seek that status if Mesa annexes the land it intends to develop.
The amended language, however, did not arrive in time for the committee to consider it, but Hoffman said he would seek to "amend the bill on the floor" before it comes up for a vote.
Sakiewicz’ support of the legislation wasn’t the only thing that led interested observers to suspect the Coyotes might have something to do with the legislation. Hoffman said he was waiting to receive the amendment language from Mike Williams, who has been a lobbyist for the Coyotes since 2021, according to public records.
Gutierrez said the team hasn’t worked with Williams since December.
“We asked him when we became aware of this [bill] to change his status as representing us as a lobbyist with the Secretary of State,” Gutierrez said.
Williams confirmed that he is no longer working for the Coyotes and said he isn’t connected to the bill, either. Hoffman did not respond to multiple requests for comment.
Could theme park district hurt Coyotes’ prospects?
Gutierrez’ assertion that the team will consider establishing a theme park district to help finance its development adds another wrinkle to an already complex process. While the establishment of a theme park district does not create any citywide or countywide taxes – Gutierrez referred to it as a “voluntary user fee” for those who spend money at the development – using the mechanism to help finance a Coyotes arena could be a touchy political issue.
The D-backs faced limited public backlash when they lobbied for the initial legislation in 2021 but have since decided not to pursue a theme park district to finance improvements to Chase Field.
“We didn't think it was right to put that on our best fans, to have them pay for it,” said D-backs CEO Derrick Hall. “So, we're looking for other methods. Although we were big champions of it to begin with, it's become a non-starter for us.”
The Coyotes’ last attempt to build an entertainment district was defeated soundly in 2022 by voters in nearby Tempe, despite the team agreeing to privately fund the development without raising or adding citywide taxes. Tempe Mayor Corey Woods called it “the best sports deal in Arizona history.” Opponents of the deal, however, railed against incentives and property tax breaks the team would have received.
Without a permanent home in the region, the Coyotes are playing for the second season at Arizona State University’s 5,000-seat Mullet Arena under a venue license agreement that runs until the end of the 2024-25 season and includes an option for the 2025-26 season. Since the Tempe referendum failed, the team has been under immense pressure from the NHL and its players’ union to put forth a plan that would have the team playing in an arena befitting an NHL franchise in a timely manner. Commissioner Gary Bettman has long expressed his desire to keep the Coyotes in the region, but rumors that the team could be relocated reached fever pitch earlier this season.
If built, the Coyotes’ arena would be the third-large indoor entertainment venue in the Phoenix metro area, which has a population just less than 5 million, joining the downtown Footprint Center and Desert Diamond Arena in Glendale.
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