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Coyotes look to new East Valley home, face some hurdles

The Arizona Coyotes hope to become the next professional sports team to make the East Valley their full-time home after announcing ambitious plans to build a $400 million arena and a separate practice facility in Tempe.

The new arena would serve as the centerpiece of the new Arizona State University Athletic Facilities District. It would be on the northwest corner of East Rio Salado Parkway and McClintock Drive, the present location of the back nine holes of ASU's Karsten Golf Course and across from Tempe Marketplace.

But a number of obstacles must be removed before construction can begin as early as late next summer, not the least of which is paying for a glittering new facility billed as a major destination.

The Coyotes are pledging to pay close to half the cost. They will be seeking approval from the Arizona Legislature and Gov. Doug Ducey for a package of tax rebates to finance the remaining $200 million.

Although details of such a plan are a bit hazy, the rebates would amount a percentage of new tax revenues generated by the arena, a proposed hotel where visiting teams would stay, and a mixed-use development.

"There's always some form of public involvement" required to build professional sports facilities, said Anthony LeBlanc, the Coyotes president and CEO. "This is a project that pays for itself."

LeBlanc and Coyotes owner Andrew Barroway said at a press conference that they are not expecting a free arena from taxpayers and that they are taking a substantial risk by putting up about half the money to build the new facility.

"We are going to build it so it is a destination," Barroway said, with other forms of entertainment beyond hockey, including restaurants and clubs. "Not only are we going to make it first class; we're going to make it cool."

The facility would include a 16,000-seat arena where the Coyotes would play and a separate, 4,000-seat practice facility that would be used by the Coyotes and the ASU hockey team.

After a long series of financial struggles at Glendale's Gila River Arena, which has included bankruptcy and operation by the National Hockey League, the Coyotes believe they could at least break even at an East Valley arena closer to their fan base.

The Arizona Cardinals football team played at ASU's Sun Devil Stadium from 1988 to 2005 before moving to University of Phoenix Stadium in Glendale, next door to Gila River Arena. The Cardinals still practice at a training facility in Tempe, at Warner Road and Hardy.

Three Major League Baseball teams also have a strong presence in the East Valley, even if their full-time headquarters are elsewhere. The Chicago Cubs and Oakland Athletics train each spring in Mesa and the Los Angeles Angels of Anaheim train in Tempe. Beyond Cactus League games, their practice facilities are used for instructional leagues and rehabilitation of injured players.

"I can't tell you how many times I have been told, 'If your stadium was closer to my house, I would be a season-ticket holder,'" Barroway said. "If we do everything right and this works out perfectly, we can break even and have a winning team."

He declined to reveal how much money the team is losing in its West Valley location, which can be an hour's drive from much of the East Valley. Losses in the past have been in the tens of millions of dollars, with fans saying they have trouble driving to Gila River Arena through heavy traffic for weeknight games.

Barroway said the deal with ASU and Catellus Development Corp. would likely include a long-term lease of the new arena and other property, but details have not been determined.

LeBlanc said, "It's a simple, empirical fact that the majority of our fans are on the east side."

The Coyotes announced they have entered into an "exclusive negotiating agreement" with Catellus. The arena and hotel would sit on 58 acres of the 330-acre district. The agreement sets a June 30, 2017, deadline to create an overall budget, design and operational plan.

LeBlanc said he would like to see construction start by the end of summer 2017, with the Coyotes inaugurating their new arena in the 2019-2020 season.

Greg Weaver, executive vice president of Catellus, said many details should be worked out during the next six months. No decision has been reached on when the Karsten course would close or what chain would build the hotel.

Weaver said that Catellus specializes in such private-public projects and that he is excited about the possibilities of a major university partnering with a professional sports team. The Coyotes arena would serve as an anchor for the development, he said.

"This is the center of it all. It's pretty fabulous," Weaver said, citing ASU, Tempe Town Lake, Metro light rail and close proximity to Sky Harbor International Airport as critical design elements. "It has wonderful attributes to make a world-class project."

Tempe Mayor Mark Mitchell said he needs to learn more about the project before deciding whether he supports it.

"It could be big for Tempe and the southeast Valley if it were to happen," Mitchell said. "It's so preliminary, it's hard to say what's going to happen."

LeBlanc said the plan grew from a conversation he had with Ray Anderson, ASU vice president for university athletics and athletic director. The original discussion centered on building a 4,000-seat arena for the hockey team and a 100-200 seat practice facility.

Anderson confirmed the university's support for the arena proposal in an interview with a sports web site.

When Glendale terminated the Coyotes long-term lease, deciding it was a bad deal for taxpayers, the two parties put their idea "on steroids," LeBlanc said. "Some people once said this was a silver lining. This is a gold lining."

- Reach Jim Walsh at 480-898-5639 or at [email protected].

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