Arizona Coyotes Eyeing Land Worth $68.5M For New Arena. Why Does it Cost So Much?

Article originally posted on HERE on March 12, 2024

About 100 acres of state trust land in north Phoenix that the Arizona Coyotes are hoping to buy for their future home is valued at $68.5 million, according to a new appraisal.

The appraisal was filed Thursday with the Arizona State Land Department. It determines the market value of the property on the northwest corner of the Loop 101 freeway and Scottsdale Road as of mid-October, when the land was inspected.

That value is likely to become the starting price if the land is auctioned for sale.

Xavier Gutierrez, president and CEO of the Coyotes, declined to comment on the appraisal. The professional hockey team is under pressure to find a permanent arena home after Tempe voters rejected the Coyotes plans to build an entertainment district there last year.

The appraisal of state land is a significant step in the process to purchase state trust land. Millions of acres of land were given to Arizona in a trust when it became a state and can be sold or leased to fund programs including public education. How the land can be sold is set out by the Arizona Constitution and state law.

Through a law firm and without mentioning hockey, the Coyotes applied in June to buy 200 acres in north Phoenix, just west of the Scottsdale border. That was later pared back to the 95 net acres included in the appraisal. The team is seeking to buy the land through a company called Miracle Development LLC.

The appraisal is likely to be reviewed by the land department Board of Appeals at its next meeting on March 14. If the board approves the appraisal, the land could then go to auction. That would be held after a public notice is issued and advertised for 10 weeks.

The land must be sold to the highest bidder.

How the appraisal determined the value

The appraisal was done for the State Land Department Board of Appeals by Michael H. Clement of Situs Valuation Group in Mesa. Clement is a certified general real estate appraiser who also served on Mesa’s Planning and Zoning Board.

The goal of an appraisal is to determine the “highest and best” use of the property that would generate the highest value, Clement said. That assessment takes into account the zoning — what can be built on the land — as well as market conditions and other factors.

Clement compared six nearby land sales, of private and state trust land, in reaching his recommendation to the Board of Appeals. Those sales ranged in acreage, from 48 acres to 216 acres, and all fronted the Loop 101 freeway. They dated back to Sept. 2018 and as recently as March 2023, the appraisal says.

After adjusting for factors such as parcel size, improvements to the land, buyer motivation and others, Clement used the per-square-foot price of the other sales to set the market value of the land sought by the Coyotes. At $15 to $17 per square foot, the market value range was $62.3 million to $70.6 million.

The appraisal recommends the price at the upper range of that window, at $68.5 million or $16.49 per square foot.

Clement said the appraisal was completed without knowing the applicant nor the intended use of the property. The land department and the attorney on the application would not share that information, which is not unusual and doesn’t affect the appraisal process, according to Clement.

“I still go through the same process,” he said.

“It had no impact, because I had zoning and land use plans, the general plan,” Clement said. “You also can see the nature of trending uses in the area. That’s the magic.”