Will Tempe’s planned entertainment district generate millions? Studies show differing results

Two newly-released studies examine the possible economic impacts if Tempe voters decide on the fate of the proposed Coyotes entertainment district and arena.
Published: Apr. 17, 2023 at 7:27 AM MST|Updated: Apr. 17, 2023 at 6:05 PM MST
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TEMPE, AZ (3TV/CBS 5) -- As voters prepare to decide whether to move forward with a proposed Tempe sports and entertainment district, two newly-released studies examine the possible economic impacts. And the results are very different.

Grand Canyon Institute, a nonprofit organization, released a report on Monday that detailed the potential revenue and economic impact that the proposed Arizona Coyotes arena and entertainment district could have on the city. Regarding the arena specifically, supporters of the district and Bluebird Development have claimed that around 45 events plus hockey games are anticipated. The study found a new arena could “negatively impact the Footprint Center owned by the city of Phoenix and/or Gila River Arena owned by the city of Glendale.” The latter was renamed Desert Diamond Arena last year.

A concern shared by those against the proposed arena in the past has been the tax on city facilities. The study found “for every $2.70 diverted from the city to the community facilities district, the city only receives $1 in new revenue,” due to the cost of overall spending between the entertainment district and the arena. The report also states that researchers believe that the city of Tempe and the developer’s report were based on “highly speculative” numbers.

As for the tax revenue, the report said that any positive impact on the city’s economy is negligible. “GCI’s analysis finds that the project will not generate nearly sufficient additional municipal tax revenue to offset revenue the city has allocated to the CFD,” states the report.

Meanwhile, Arizona State University’s Seidman Research Institute analysts claim that all previous reports on the potential revenue opportunity were “underestimated” and that the arena plan will generate more tax revenue than previously thought. The independent review says the proposed district will generate hundreds of millions for the city, without residents having to pay for it. The Seidman study cites that more revenue will be garnered because the arena will be the first sports venue to pay property taxes in the history of Arizona.

Arizona Coyotes CEO Xavier Gutierrez approved the report and claimed that his research team found the same results as those researchers, that “no public dollars will be used to fund this project.” The Seidman Research Institute’s review was paid for by Tempe Wins, proponents of the entertainment district.

If approved, the entertainment district will be finished in two stages, according to the developer. The first phase will include a new arena, a 3,000 music venue, Coyotes headquarters, and practice area, more than 160,000 square feet of retail space, more than 180,000 square feet of office space, a hotel, apartments and a parking garage with more than 1,000 spaces. Phase two of the project would include more office, retail and living space, including a convention hotel.

Getting the plan approved by voters is only one hurdle, as a dispute between Tempe and Phoenix Sky Harbor International Airport continues. Late last month, the Phoenix Aviation Department filed a complaint against Tempe over the proposed apartments and homes under Sky Harbor’s flight path. Officials say the area is exposed to high noise levels from planes and therefore unsuitable for housing. Pilots have also voiced concerns that new buildings would be high enough to restrict air traffic.

Following Sky Harbor’s lawsuit, the Arizona Coyotes and Bluebird Development filed a countersuit against the City of Phoenix, claiming “sabotage” and “reneging on its public promise not to oppose” the planned district.

Tempe residents will be able to vote on Propositions 301, 302 and 303 beginning on Monday. Find more information about each proposition here.