The City of Glendale is threatening to lock the Arizona Coyotes out of Gila River Arena due to delinquent tax bills and unpaid arena charges, The Athletic has learned.
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.
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The Coyotes provided a statement to The Athletic late Wednesday night that reads: "We have already launched an investigation to determine how this could have happened and initial indications are that it appears to be the result of an unfortunate human error. Regardless, we deeply regret the inconvenience this has caused. 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."
In a letter from ASM to the Coyotes obtained by The Athletic via an open records request, the Coyotes have submitted checks to ASM totaling $999,000 as of Thursday, with $2.7 million still outstanding from the 2021-22 season.
Earlier Thursday, the team told The Athletic it has made payments for state and city taxes and outstanding arena charges. In response to a request for confirmation that the state and city tax bills were paid, a spokesperson for the Arizona Department of Revenue told The Athletic that policy prohibits the department from providing information about a taxpayer.
(The Coyotes have previously explained late signing bonus payments to players as "process failures" due to personnel transitions and stressed the need to "course correct" its business arrangements when asked about failures to pay outstanding balances to vendors and independent contractors).
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.
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Arizona's first home game following the Dec. 20 deadline is Dec. 23 against the Tampa Bay Lightning.
The Coyotes have the right to an informal hearing on the matter should they file a written request within 10 days.
Phelps, the City of Glendale manager, said he called NHL commissioner Gary Bettman on Wednesday to inform him about the situation. A league spokesperson did not immediately respond to an email requesting comment.
Back in August, the City of Glendale informed the team it would opt out of its joint lease agreement for Gila River Arena, essentially forcing the Coyotes to vacate the arena by June 30 of next year, making the 2021-22 season the club’s final one at the facility.
That termination notice followed several months of negotiations between the city and the team on the terms of a lease extension and potential renovations to the arena. Public records revealed that the impasse followed multiple notices of outstanding and delinquent balances owed by the Coyotes as part of the lease agreement.
While some observers felt the city's stance was a leverage play to bring the Coyotes back to the negotiating table, the city has stood firm on cutting ties with the team.
"We've reached that point of no return," Phelps told The Athletic in August. "There's no wavering."
In September, The Arizona Republic reported the Coyotes proposed a $1.7 billion development in Tempe, Ariz., that would include a hockey arena. The Athletic reached out to the city of Tempe to see if Wednesday's news will have any impact on its evaluation process for development proposals. The city responded: "The City of Tempe's intensive due diligence to evaluate the RFP response is ongoing."
In February, The Athletic published a lengthy story about the Coyotes that detailed an organization rife with internal problems, including a "toxic" workplace environment and a litany of financial issues, among other concerns. Delinquent bills and unpaid debts were a recurring theme, with several vendors complaining they had either not been paid or pressured to accept a significantly reduced portion of what was owed to them for services and/or goods.
(Photo: Christian Petersen / Getty Images)
