The arena dispute between the Arizona Coyotes and the city of Glendale, Arizona (which owns what’s currently called Gila River Arena, the building the team has played in since the 2003-04 NHL season has taken another twist. In August, Glendale told the Coyotes 2021-22 would be their last season there, serving them a termination notice effective June 30, 2022 and saying the city could make more money from concerts and events without the NHL team. And now, as per reports from Katie Strang of The Athletic and Craig Morgan of PHNX Sports, the city is threatening to speed up that eviction, saying they’ll lock the Coyotes out on Dec. 20 if their unpaid arena charges and tax bills aren’t paid by then:
NEWS: Coyotes may be locked out of Gila River Arena by City of Glendale for unpaid arena charges and delinquent tax bills https://t.co/4e4r3ejdgn
— Katie Strang (@KatieJStrang) December 9, 2021
Meanwhile, I have just confirmed this same news.
The Coyotes have until 5 p.m. on Dec. 20 to pay the outstanding arena invoices and taxes from 2020-21. If they don't they will be locked out of Gila River Arena. https://t.co/qkpffF7VFj— Craig Morgan (@CraigSMorgan) December 9, 2021
As per Strang’s piece, more than $1.3 million in taxes alone is at issue here:
On Dec. 3, the Arizona Department of Revenue filed a tax lien notice in Maricopa County against IceArizona Hockey LLC, the company that owns the Coyotes, for more than $1.3 million in unpaid state and city taxes. The City of Glendale, which has been locked in a lengthy dispute with the Coyotes over delinquent bills, has already notified ASM, the Gila River Arena management company, and Coyotes team president and CEO Xavier Gutierrez of the cancellation of the Coyotes’ business license.
The City of Glendale is owed approximately $250,000 in unpaid city taxes, according to a letter from City Manager Kevin Phelps to Gutierrez, and the remaining amount is owed to the state. The state tax lien notice, obtained via a public records request, asserts that the Coyotes owe taxes dating back to June 2020.
The Coyotes, according to the notice sent to ASM and to the team, will have until 5 p.m. MST on Dec. 20 to pay the outstanding arena invoices from the 2020-21 season, as well as the outstanding tax bill. If they do not settle up the remaining debt by that time, the City of Glendale has instructed ASM to deny team employees access to the arena and the offices within the arena used as administrative space. Arena vendors would also be locked out.
Strang also wrote a long investigative piece on the team in February, titled “Dysfunction in the desert: Finger-pointing, fear and financial woes roil the Coyotes organization.” That piece included discussions of unpaid vendors and vendors pushed to accept minimal amounts of what they were owed:
The team’s relationships with corporate partners, vendors and suppliers eroded as Meruelo Group executives applied what appeared to be a specific strategy: call up the partner, vendor or supplier, and ask that entity to “work with them.” This was often the starting point of a process in which Meruelo’s associates would haggle over line items in invoices or portions of a contract; it was also not uncommon for Meruelo associates to use the threat of litigation as leverage to get out of paying outstanding invoices or to make payments at drastically reduced costs. Over the course of reporting this story, The Athletic identified and spoke with eight vendors with whom the Coyotes had outstanding or past due balances or negotiated their debt to a lower amount.
“They default on a bill and then chisel you down to what you accept and then they pay you,” said one vendor.
Meanwhile, there have been some reports about potential destinations elsewhere for the Coyotes, including Forbes SportsMoney managing editor Mike Ozanian and contributor Eric Macramalla combining for a piece last week saying that a banking source indicates the team is for sale and may move to Houston (a long-discussed relocation venue for the NHL). The Coyotes denied that report, as did NHL commissioner Gary Bettman. But there’s certainly a need for them to find a place to play beyond next summer. And there now are questions about where they’ll be playing after Dec. 20, and that’s a giant potential problem for the league as well as the team.
Update: Here’s the Coyotes’ response, claiming “human error”:
"We will make sure that by tomorrow morning, the Arizona Coyotes are current on all of our bills and owe no state or local taxes whatsoever. And we will take immediate steps to ensure that nothing like this can ever possibly happen again."
— José M. Romero (@RomeroJoseM) December 9, 2021
And, as per ESPN’s Kristen Shilton, the Coyotes did actually “come current on all bills and tax liabilities” Thursday. But there are still plenty of questions ahead about their future.
