Tax breaks, economic impacts among points of contention as supporters, opponents debate Tempe's Coyotes arena deal

Groups supporting and opposing Tempe's $2.1 billion deal with the Arizona Coyotes sparred over the merits of the deal during a debate on Tuesday night, squaring off on topics such as the deal's economic impacts and benefits for Tempe to the tax breaks that the Coyotes are slated to receive.

The back-and-forth grew pointed at times, with Tempe City Council member and paramedic Joel Navarro showing his frustration over claims that the 46-acre project site isn't currently a safety hazard, and opposition leader Dawn Penich-Thacker redoubling her attack on Coyotes owner Alex Meruelo as a "corrupt billionaire."

At its core, the messages of both sides were clear: The opposition wants to "start fresh" with a new project idea for the site, while Coyotes arena supporters want the public to "vote yes" and insist that the deal is a slam-dunk opportunity for Tempe that won't arise again.

Supporters called it the best sports franchise deal for taxpayers in Arizona history, and detractors painted the project as too good to be true and a giveaway.

Overall, the exchanges were polite and substantive in a debate free of name-calling or hostility. The Arizona Republic sponsored and moderated the debate.

The Coyotes project in question would involve building a professional hockey arena, nearly 2,000 apartments and an entertainment district on 46 acres of city-owned land west of Town Lake. It won't happen unless a majority of Tempe voters check "yes" on three ballot initiatives — Propositions 301, 302 and 303 — on Election Day, May 16.

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Early ballots will start being mailed out on Wednesday. Tuesday's debate aimed at getting residents the answers they need in order to make an informed decision at the polls.

The campaigns for and against the deal have been intense, marked by threats of lawsuits and name calling, which have helped gin up public interest and have made this deal one of the most controversial ballot measures in Tempe's recent history.

For Tuesday's debate, Navarro and Coyotes CEO Xavier Gutierrez spoke in support of the deal.

They drove home the argument that no other developer has followed through on plans to develop the project site, which has previously housed a landfill and requires millions of dollars in cleanup. Supporters also emphasized that under the Coyotes proposal, the team would be on the hook to pay that bill, meaning Tempe would have zero liability and would stand to gain millions in new revenue as a result.

“I want to be very clear. There are no tax dollars, there are no general fund dollars, there are no dollars other than ours that go into this project. This project is going to generate revenue that then will take on the debt that is necessary to clean up this landfill,” Gutierrez said. “Those are going to be private bonds whose sole guarantee is our land that we're buying and our real estate that we're building.”

The opposition was represented by Penich-Thacker, a communications professional, and the founder and owner of Changing Hands Bookstore, Gayle Shanks.

They argued that the deal isn't worth the roughly $100 million in property tax breaks that it's slated to receive and that Tempe should "go back to the drawing board" in order to find a project that wouldn't require those types of subsidies. The two opponents of the deal also contend that it doesn't help Tempe address its "real needs," such as homelessness and education.

“If something sounds too good to be true, it probably is,” Penich-Thacker said. “This is not the right project. We know that we will develop this land and we have an opportunity to do that with a better deal by saying no to this one and going back to the drawing board.”

One of the more contentious points of discussion centered around dueling studies on the projects' potential economic impact that were both released this week.

One from the Grand Canyon Institute found that the deal would be a "net drain, not a net gain" for the city. The other, which was conducted by Arizona State University and funded by the Coyotes organization, found that the deal would be even more lucrative for Tempe than previously expected — to the tune of $34 million.

Gutierrez cited ASU's credibility, while also critiquing GCI's heavy focus on the arena and music venue portion of the proposal as an incomplete analysis.

“There's $1.8 million more of investment on our part that were never included in this report by an entity that we hadn't heard of,” Gutierrez said about GCI’s report. “But we have heard of ASU. We have heard of the W.P. Carey School. We have heard of the Seidman Institute. And their report ... shows no tax dollars will be used in order to build any part of this development.”

The opposition countered by saying that, regardless of whether Gutierrez had heard of GCI before its report, the institute is "actually very well-known and well-renowned in Arizona and nationally." They also pointed out the fact that the ASU study was paid for by the Coyotes and questioned whether its findings were credible for that reason.

“There are many entities within ASU that are for-profit. You tell them what you want the findings to show, and they figure out a way to show what you need,” Penich-Thacker rebutted. “If I'm presented with information that was bought and paid for by the person trying to get me to buy it, I would definitely believe the information that was not purchased by the salesman himself.”

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The integrity of Meruelo, the Coyotes owner, also came up. The opposition has plastered Tempe with signs for months claiming he is "corrupt" and even prompted a cease and desist letter from the team's organization.

One of the claims made by Penich-Thacker concerned a property in Miami that she said Meruelo owned, but let rot to the point that the city had to demolish it. Gutierrez countered she was referring to a different man than the Coyotes owner.

"I appreciate that you're actually talking about facts. And I'll start by stating one: You have the wrong Meruelo in Miami. That is not Alex Meruelo. So, perhaps you can do your research a little bit better," he said.

The Arizona Republic has not been able to verify either claim.

Overshadowing the entire proposal was the role played by Phoenix Sky Harbor International Airport, which sued Tempe over approving housing on the site, about 2 miles from the nearest runway. The Coyotes have since countersued Phoenix.

Opponents of the Coyotes deal said the legal morass would tie Tempe up in costly lawsuits for years. Gutierrez countered that the developers would indemnify the city and future residents and said Phoenix has routinely tried to bully its neighbor.

Another key point of contention was the condition of the land, parts of which have long been a disused landfill. Both sides have made inaccurate or unverified claims about the site throughout the campaign.

Opponents claimed that it only houses a compost yard and not a genuine landfill. The Republic's review of technical soil sample reports shows the site contains household trash and debris.

On the flip side, Coyotes supporters have overplayed the contamination of the site. They have called it a "toxic" landfill. The Republic reviewed three reports, but none in the last decade found dangerous levels of toxic materials on that site.

Those waters were made less muddy during the debate when Republic reporter and moderator Taylor Seely clarified that the site has been a landfill, and Navarro confirmed that the city does not know if the land is actually toxic after months of the Coyotes claiming that it is.

"We know it's a landfill. It's designated as a landfill. We don't know the toxicity of that landfill," said Navarro, whose statement is backed up by the soil studies reviewed by The Republic. "Over 70 years, I have no idea who put what in that landfill. And the thing is, you guys cannot be for certain saying that it's not toxic."

The Republic will be fact-checking the claims made by either side in a future article.

You can watch complete footage of the debate below.

This article originally appeared on Arizona Republic: Supporters, opponents debate merits of Tempe's Coyotes arena deal