As was reported last week, the Arizona Coyotes and the NHL sent a letter to the State Legislature notifying lawmakers that if they do not agree to provide $225M in taxpayer money for a new hockey arena, they are going to leave Arizona for icier pastures.

The shakedown letter was an astonishing (some would consider desperate) maneuver by the team and the NHL, especially since it exposed the truth that the Arizona Coyotes have been intentionally misleading Glendale taxpayers and elected leaders for over a decade in order to receive unconstitutional subsidies from taxpayers.

This fact was not lost on former Mayor Elaine Scruggs, who penned a scathing letter detailing the history of the Coyotes in Glendale.  Throughout her two page response, Mayor Scruggs cited each broken promise and dishonest claim made by the team as the city poured an estimated $500 million dollars of taxpayer money into the failed endeavor.

For several years, the NHL and Coyotes repeatedly told anyone that would listen that hockey was an economically viable product in Glendale and that the team was not receiving hidden subsidies to cover its operating losses.

The ownership group was well aware of the constitutional, legal, and political issues of a professional sports team receiving direct subsidy payments from taxpayers. In 2010, the Goldwater Institute threatened to sue the city for violating Arizona’s gift clause when it was considering a deal to cover up to $100M in losses if the team didn’t turn a profit. That deal subsequently collapsed.

Three years later a new ownership group came on the scene and negotiated behind closed doors a lucrative 15 year, $225 Million “management agreement” with Glendale.  The team and the city stated publicly that it was a reasonable agreement to operate and manage the taxpayer-financed arena, and was not a clever trick to do an end run around the gift clause.

Now the truth is out. The one-sided agreement was never about managing the arena.  The Coyote’s claims since Glendale lawfully terminated the agreement have been, by their own admission, proven false.  They were not being “evicted” by Glendale or being forced to accept substandard management of the arena. The Coyotes were just mad that they had foolishly violated state law and had the subsidies cut off.

And now the Coyotes and the NHL are pushing Senate Bill 1149, legislation that would give the team 30 acres to develop a taxpayer subsidized arena, hotel, restaurants and bars. They are trying to lure another city into a deal that will keep the subsidies flowing. The Club’s recommendation to taxpayers: you see the Coyotes coming, skate for the exits.

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The Arizona Free Enterprise Club is a free market policy and advocacy group dedicated to promoting a strong and vibrant Arizona economy.
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