X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

GLENDALE, AZ-Glendale’s $180-million backing for a new Phoenix Coyotes’ arena won’t speed development of the project says the developer, but it does remove the burden of finding financing.

“It doesn’t change anything,” Tim Wright, a senior vice president with Ellman Cos., tells GlobeSt.com. “The city saw some advantages to, I hope, them and us in offering up an alternative in providing the construction financing.”

Glendale is providing $180 million up front for the construction of the 17,500-seat arena at the southeast corner of Glendale Avenue and Loop 101. The original agreement with Coyotes’ owner Steve Ellman called for the city to buy the arena after it was built. As with the original pact, Ellman will pay for any cost of the arena beyond the $180-million mark and will pay the city out of Coyotes’ revenues if the complex’s retail portion fails to generate the projected sales tax revenues.

The city’s financial consultant says Glendale can obtain construction financing for 2% to 5% less than Ellman. That ultimately will save money. Under the new agreement, Ellman agrees to pay Glendale the difference between public and private financing costs of building the arena.

The city financing may only marginally speed the development, Wright says. “It doesn’t change the timing,” he says. “It takes one thing that we were going to have to spend time on…obtaining arena financing…that we don’t’ have to spend time on.”

Ellman must have at least 800,000 sf of retail space open around the arena within six months of its delivery. Construction should start in the fall, with the team prepping to take to the new ice for the start of the 2003 hockey season. At build out, the retail portion will yield more than 1.5 million sf, a hotel and some residential housing, Wright says.As part of the deal, Ellman must purchase a 30-acre chicken and hog farm that is adjacent to the arena parcel. The city wants the Hickman Farm relocated to encourage additional development.

Within the past month, Ellman sold some of his real estate holdings in the Valley and raised more than $55 million in cash. Gone are the Mesa Pavilions, a 706,000-sf power center in Mesa that brought about $31.4 million and Tempe’s 465,000-sf The Groves, which pumped another $23.9 million into the coffer. Price Enterprises, which is the process of merging with San Diego-based Excel Legacy Corp., was the buyer of both retail venues.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.