City of Glendale and
Arizona Coyotes
Fact Sheet
Recently the City of Glendale has received a number of inquiries from elected officials, private citizens and media about its current lease
agreement with the Arizona Coyotes. To assist in answering these inquiries, the city has compiled the following information. Included is a
brief synopsis of the 13-year history of the Gila River Arena, financial and operational details of the current Coyotes lease and an analysis
of West Valley market demographics.
History / Timeline:
• The Gila River Arena was built specifically for the Coyotes in 2003.
• The city invested approximately $160 million to construct the arena plus an additional $26 million for surrounding
infrastructure improvements.
• Through 2033, annual debt payments to repay the arena bonds are approximately $13 million per year.
• Excluding the initial construction cost and the continued $13 million per year in annual debt payments, the city has invested
approximately $45 million to cover arena operating losses since its opening in 2003.
• The outstanding principal taxpayer debt for the arena is currently $144.9 million. It is scheduled to be paid off in 2033. When
combined with outstanding interest costs, the city will make $223.6 million in payments over the remaining 17 years of
bond maturity.
• In May 2009, the previous owners of the Coyotes filed for bankruptcy and the NHL took control of the franchise. To help ensure
that the NHL would not relocate the team to an out-of-state market, the city paid the NHL $50 million as team operating
subsidies (approximately $43.6 million net of operating revenues). These subsidies covered arena and team-operating costs
for the 2010–11, 2011–12, and 2012–13 hockey seasons.
• In 2013 the NHL approved the sale of the team to a new ownership group (IceArizona).
• In 2013 the city entered into a 15-year facility management agreement with the new ownership group to manage the arena.
The agreement called for the team to receive $15 million per year (less certain revenue offsets) to manage and operate the
arena on the city’s behalf.
• Arena expenses incurred by the city over the 2013–14 and 2014–15 seasons exceeded revenues by $19 million
(total for both years).
• In 2015 the management agreement with the team was terminated. The city immediately negotiated new two-year contracts
with the ownership group. They allowed the Coyotes to continue to play in the arena and for IceArizona to manage the arena.
The contracts also allowed the city to select a new arena manager starting July 2016.
• In 2016 the city terminated the arena management portion of the lease agreement with the team and after a competitive
process selected AEG Facilities to take over arena management on the city’s behalf. The agreement pays AEG $5.6 million per
year. This amount is offset by a profit-sharing component following the attainment of certain benchmarks.
• In the summer of 2016, AEG commenced discussions with the team about the city’s desire to enter into a long-term
lease with the team.
• Although a longer term lease was discussed, in July 2016 the team agreed to a lease contract modification that provides
the team the option to extend the term of their existing lease on a year-to-year basis and under the same financial and
operational conditions.
• On January 1, 2017 the lease between the Coyotes and the arena (AEG) was extended through the 2017–2018 season.
Brent Stoddard
Public Affairs Director
[email protected]
(623) 930-2078
Current Arena Lease Agreement:
An analysis by consultants of current market NHL arena management leases indicates that the current lease agreement with the Coyotes is
considered one of the most favorable lease agreements of all 30 NHL teams. The terms of the current agreement are:
• Team pays $500,000 to the arena annually for use of the facility. The lease includes:
– Use of the arena for all practices (unless there is an event booked by arena management) and games including
pre-season and all playoff games. By way of notation, the use of the arena as the primary practice facility is unique to
the Coyotes. The vast majority of NHL teams own and operate separate team practice facilities. Cost to operate these
facilities are significant and are absorbed within their operating budgets.
– Control over locker rooms, retail stores, storage areas, suites and concession / catering space.
– Dedicated corporate office space in the facility totaling 11,900 sq. ft. which saves the team an estimated $253,470
per year (estimated fair market value for replacement space).
• Team retains the following revenue sources:
– 100% of hockey event parking (estimated value is $1.4 million per year).
– 100% of hockey merchandise sales (proprietary information – data not available).
– 100% of hockey concessions (proprietary information – data not available).
– 80% of naming rights (estimated value is $1.7 million per year).
– 100% of ticket surcharges for hockey events – the team has full control over setting this rate
(estimated value is $2.3 million per year).
• The city is responsible for:
– Minimum of $500,000 per year for capital improvements/repairs until 2020, then $1 million per year thereafter.
In Fiscal Year 2016–17, the city invested an additional $1 million for capital improvements/repairs over and
above the contractually obligated amount.
– All facility operating costs including non-security personnel, utilities, maintenance, repairs, insurance etc.
– Continued debt service payments on the facility, averaging over $13 million per year, through 2033.
West Valley Demographics and Future Growth:
The greater Phoenix metropolitan area (Valley) has 4,574,351 residents (source: U.S. Census data) and is currently the 11th largest (out of 30) in the
NHL and 12th largest overall market in the U.S. The Valley is one of only 14 markets that support Major League Baseball, NFL, NBA and NHL franchises.
The Gila River Arena is located just off the Loop 101 freeway, minutes from the I-10 freeway. There are 1,531,130 residents who live within 30
minutes of the arena during a typical afternoon inbound commute. This number increases to 2,293,144 residing within 45 minutes and 3,033,049
within a 60-minute afternoon commute (source: Maricopa Association of Governments).
35-year population growth projections (2015 – 2050) for the Valley predict the West Valley will grow at almost double the rate for the East Valley
and City of Phoenix areas (source: Maricopa Association of Governments). Projections predict population growth for the West Valley region will be
almost equal to the combined population growth of both the City of Phoenix and East Valley areas.
To accommodate existing needs and future growth, the metropolitan area continues to invest significant resources into the transportation system.
A number of large regional transportation projects are planned for the West Valley to improve drive times between the East and West Valleys
including significant investments in the I-10 / Loop 101 system. Additionally, construction recently began to construct a new Loop 202 / I-10
bypass route (South Mountain Freeway) which the state believes will significantly improve connectivity between the West Valley and East Valley
areas. This project is scheduled to be completed by 2019.