SBJ/October 15 - 21, 2001/Opinion

What you see not always what you get

The term "clean and lien" is unfamiliar to most people, but last month it was a welcome addition to the vocabulary of those frequenting the intersection of Scottsdale and McDowell roads in Scottsdale, Ariz. That city's directive, ordering the property owner to clean up or face legal action, meant that the piles of tangled debris that for a year had defaced the 42-acre site of what used to be a shopping center would be hauled away. The job has been done, and while it left the place less than spic and span, it at least was an improvement over its former, wrecked state.

But unfortunately for those who live in the area, and for the municipality as a whole, the problem of what to do with the derelict lot didn't leave with the dump trucks. A new arena for the National Hockey League's Phoenix Coyotes was supposed to be built there, but now it won't be, the project lately having been moved to Glendale, another Phoenix suburb.

Putting up something else will require further dealings with Steve Ellman, the man who owns the property as well as the Coyotes. As Scottsdale has found out, those aren't easy.

The Scottsdale arena saga is a strange one, worth recounting as a cautionary tale to other cities mulling similar endeavors. It shows that what you see — or think you see — isn't necessarily what you get.

What Scottsdalers thought they were getting when they okayed the public-finance underpinnings of the project in elections in May and November of 1999 wasn't just an arena but a plan that would bring shops, restaurants, movie theaters and a public ice rink to a site that had been all but abandoned when the local retailing action moved elsewhere. Indeed, recognizing that the prospect of having a hockey stadium plunked down in a busy part of a busy town wouldn't be universally applauded, proponents soft-pedaled that part of the package. Their ad campaign promised "neighborhood revitalization" in the form of a spiffy place where people could recreate happily whether or not they cared about the wintry sport.

But once the votes were in and things got down to cases, the picture changed. The public ice rink was jettisoned early on, and difficulties were reported in finding stores and places of entertainment willing to compete with hockey crowds on 45 to 50 nights a year. The Coyotes' owners wanted out, and real estate developer Ellman scrambled to buy the team to save his investment. He did, but not before various construction and financing deadlines on the project had passed unmet.

Scottsdale City Council elections were held in March 2000 and, partly out of voter exasperation with the arena dickering, candidates critical of the project were elected. That didn't help the negotiations, but neither did the rubble of the site's razed shopping center, which Ellman and his minions left as a kind of hostage.

Resolution, if you can call it that, came last July, when Ellman suddenly announced that he'd gotten a better deal from Glendale. That burg had tried and failed to land the new football stadium the area's citizens had approved for the pro football Arizona Cardinals. To recoup, Glendale offered the entire $180 million it's supposed to take to build the Coyotes' new domicile, exempted the team from property taxes and let it keep all the hockey revenues plus most others generated from the building. In return, Ellman agreed to put up an adjacent multiuse (and taxes-generating) complex much bigger than the one envisioned for Scottsdale.

No Glendale official has publicly admitted to any sense of unease over the deal, either at first or when the new project's groundbreaking was set back from this month to December or January, or when Scottsdale had to threaten the above-mentioned legal action to get Ellman to pick up his mess on its grounds. But that he finally did it doesn't mean his slate is clean.

Frederick C. Klein is a columnist for SportsBusiness Journal.

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