Alex Meruelo walking away from Coyotes ownership

Alex Meruelo is calling it quits. Multiple sources told PHNX Sports that ownership addressed the Coyotes’ staff on Monday and told them they have no plans to pursue further field options.

The decision comes in the wake of the Arizona State Land Department’s decision to cancel an auction on Thursday. Meruelo hoped to win that auction and purchase 95 acres (110 gross acres) of land and build an entertainment district and an arena that would house his hockey team. With indefinite delays and considerable political opposition in their way, they see no viable option that would allow them to reactivate the franchise within the parameters set forth in the team’s $1.2 billion sale to Jazz owners Ryan and Ashley Smith. Will give.

Meruelo agreed to sell the team in late April after securing an exclusive contractual right to reactivate the franchise within five years of the agreement date (the sale closed on June 13), and if a territory was created then triggered an expansion draft. Reactivation would require it to pay $1 billion of the proceeds from the sale (another $200 million was distributed as a transfer fee to other owners).

In a news release announcing the auction’s cancellation, the Department of Lands said it had “recently confirmed that the proposed area use will require a special use permit, and as a result we are requesting that the applicant obtain a special use permit.” Apply for and obtain permission before the auction. This provides certainty to the applicant and ASLD that the applicant can build what it wants to build for its main tenant. We understand the delay in the auction is a disappointment to our applicant and members of the public, but the change in timing is a prudent decision if a special use permit is obtained. ASLD stands ready to work with our applicant to bring the land to auction in the future.

When coyotes first began stalking the State Trust in northeast Phoenix, their assumption was that, given its C-2 designation, it was zoned for a field. An ill-fated, multi-sheet youth hockey complex at the Legacy Sports project next door had the same zoning designation.

The Arizona Republic first noted in December that the land in question may not be zoned for an arena of this scale and PHNX Sports has confirmed this with Phoenix city officials.

“A sports field is not specifically listed as a permitted use in the C-2 zoning district,” said city spokeswoman Telea Galawicz. “A property owner may request an interpretation of zoning so that a specific rationale and assessment can be completed by staff. Only a property owner can request a site-specific interpretation and staff has told Coyotes that we will process an interpretation request, but there is no guarantee that an interpretation will permit a game area.

“Staff have verbally informed the Coyotes that the most frequent use is of a stadium type facility for large public gatherings and that requires a special permit to be approved by the Mayor and City Council through the rezoning process. Another option would be to rezone the site to an appropriate zoning district that allows for field use such as a special permit for the portion of the land that will include the Legacy Sports Project ice hockey and athletic field. The facility is a 3,000-seat facility for volleyball practice facilities, much like football sports complexes and a far cry from the 17,000-seat sports and entertainment venue.

Although the Coyotes had a different interpretation of the wording of the C-2 designations, they had known for some time that they would need a special use permit. What likely motivated the Meruelos to pursue the land despite the zoning issue was timing. Commissioner Gary Bettman gave the team until the end of the 2023–24 season to find a credible solution. A lawyer familiar with the acquisition of the special use permit said it could take eight to 10 months, so Meruelo may have chosen to take the risk of acquiring the land and then sought the permit so he could meet Bateman’s deadline. can do.

But when the auction, originally scheduled for the spring, was moved to the end of June, Bateman contacted Meruelo about selling the team. Between the failed vote for an entertainment district in Tempe and delays in construction plans elsewhere, Bateman had seen a lot. He could not justify the team playing in the 4,600-seat Mullet Arena indefinitely.

“It’s not fair to the Coyotes players,” Bateman said at a press conference to announce the sale on April 19 at the Hyatt Regency Phoenix. “It’s not fair to players from other teams coming in. It’s not a major league facility and the possibility of playing a playoff game or a Stanley Cup Finals there, it wasn’t working so I decided we needed to find a solution.” Is.

While Meruelo had a five-year exclusive rights window to bring NHL hockey back to Phoenix through the expansion process, the main benchmark came at the three-and-a-half-year mark, according to Deputy Commissioner Bill Daly.

“The reactivation notice must be no later than Dec. 31, 2027, and the arena must be 50 percent complete by then,” Daly wrote in an email, adding that Meruelo “must make a significant deposit on the purchase price by then…” So basically. , It’s going to happen over the next three years in which it has to happen.”

Multiple sources confirmed that Meruelo was exploring other options after learning of the zoning issue. The team had a letter of intent at a site in the northwest mesa and another undisclosed location, but neither of those sites was zoned for a zone and changing the zoning would require a public process—which would involve a May include referendum; That process ended Meruelo’s hopes of building an arena in Tempe.

Sources said Meruelos also explored a site on Salt River Pima-Maricopa Indian Community land, but the inability to own the land, the inability to build housing on tribal lands and the inability to build a sportsbook made the revenue model untenable. .

It’s unclear when the NHL will officially announce the decision, but when previously asked what would happen to the market if Meruelo leaves, Daly said, “Arizona becomes like every other potential expansion city. ”

The NHL has repeatedly said it is not in expansion mode, but the Atlanta group has already purchased land, designed an arena and formally requested that the NHL begin the expansion process.

PHNX is aware of at least two groups that are interested in bringing an expansion team back to Arizona, but their interest is on hold until they formally enter the fray and begin the process. And assessing the level of capability will be difficult.

Top photo of Coyotes owner Alex Meruelo via Getty Images

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