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Glendale City Manager: Coyotes Still Haven't Paid Rent for Arena, Remain Skeptical of 'Human Error'

The Arizona Coyotes may have settled the $1.3 million in outstanding arena payments that threatened to lock them out of their own arena by Dec. 20 on Thursday morning, but the franchise's financial woes are far from resolved, the city of Glendale says. Mike Stephens has more.
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The Arizona Coyotes may have settled the $1.3 million in outstanding arena payments that threatened to lock them out of their own arena by Dec. 20 on Thursday morning, but the franchise's financial woes are far from resolved. 

The Coyotes issued an official statement in response to the initial report from The Athletic's Katie Strang on Wednesday evening that detailed the organization's delinquent payments in state and city taxes, explaining that the team had already launched an internal investigation into the matter and that it seemed to be the result of "unfortunate human error." 

Speaking in an exclusive interview with The Hockey News, Glendale City Manager Kevin Phelps insisted that, while he couldn't speak to the internal workings of IceArizona Hockey LLC., the Coyotes' parent company, he remains "highly skeptical" of that reasoning.

"Here in Arizona, all the taxpayers have to pay online," explained Phelps via phone. 

"And so there's a very simple process. You go online, on your account, you plug in the numbers for the taxes that are due, and then there's a gigantic button that says 'REMIT PAYMENT', And that's done monthly. So, every month since June of 2020, somebody has filled that information and admitted the form, but forgot to submit payment along with it." 

"Could it have been human error? Was it impossible that it wasn't? No. Is it likely? I would say that we remain skeptical, especially in light of their past history."

The Coyotes referred to their statement from Wednesday evening in response.

Phelps did confirm that the Coyotes presented two cheques to the city's arena manager on Thursday morning that makes them current on all specific arena expenses mentioned in Wednesday's report: one that covers the costs from the 2020-21 season (that was due Jun. 30 and was nearly six months overdue), and the other that covers game-day expenses up to this point in the season. 

The team is no longer in danger of having no place to play following the Dec. 20 deadline. That is, for now. 

"I'll tell you from my experience," continued Phelps. "I have never seen a department of revenue file a lien without having first sent numerous notices and calls to the taxpayer to get them into compliance."

And the Coyotes' troubles don't stop there.

According to Phelps, the Coyotes have not paid rent on Gila River Arena, as outlined in their building agreement – a revelation that comes roughly five months after the City of Glendale informed the team that it would be opting out of its joint lease in order to pursue other ventures. 

Regardless of whether the team does pay the outstanding rent or not, the Coyotes must find a new home for next season. So far, they have yet to do so. 

Speaking at the NHL's GM meetings in Florida on Thursday evening, commissioner Gary Bettman weighed in on the matter as well, stating that there was "no problem" with the Coyotes arena situation that leaves the franchise he helped install without a home rink for 2022-23.

"Well, I don't know how he defines 'problem,'" Phelps responded to Bettman's comments. 

"What I can say is that I know there has been speculation that our whole objective has been to create leverage on the team so we could cut a better deal on a lease. And it's been one of those things that has been so challenging to refute. Nothing could be further from the truth. It's not about creating leverage. We have decided to move on and into a different direction" 

"We're getting ready to announce publicly a major renovation of the arena. And we think it has a bright future with the Coyotes not part of it."

While the City of Glendale has been at the forefront of the consequences of the Coyotes' outstanding payments, the responsibility to pursue collection actually lies at the state level. What allowed the City to go public with this information on Wednesday evening, then, was the lien notice filed by the department of revenue that made the issue a matter of public record. 

And there was a clear reason for doing so. 

"We felt that it was important to protect the liability to our citizens," explained Phelps.

"That's who the revenue belongs to. It's not my money, obviously. And looking at it, we felt that we needed to reach a point where we got their attention on this matter."  

That objective has certainly been achieved. Yet another chapter in the tale of the Coyotes' troubled existence has been written. And, following the events of the past 24 hours, it may not be finished, either. 

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