The Tucson City Council is set to vote Tuesday on a 10-year agreement to lease the Tucson Convention Center arena to a minor league hockey team.
The lease deal is the last of three agreements the Arizona Coyotes need to bring the American Hockey League’s Springfield (Massachusetts) Falcons to Tucson to start the fall season.
City Councilman Steve Kozachik said the city shouldn’t feel pressured to rush into a deal unless there’s a built-in “escape hatch” for city taxpayers.
“We have to have a deal that makes sense for both sides,” he said.
The agreement includes provisions for the city and the downtown redevelopment authority Rio Nuevo to get some taxpayer money back if the team leaves early.
Under the terms, the team could leave town after five years if home-game ticket sales are below 2,500 tickets per game, and giveaway tickets would not count toward the total.
But if the team leaves, it would have to pay back a portion of the $3.2 million in Rio Nuevo money that will pay for arena upgrades needed to get the facility ready for the team by October.
AHL regular-season games attract an average of 5,982 fans per game. The downtown Tucson arena can seat around 7,000 hockey fans.
The team would pay the city $300,000 per year for the license agreement, and the amount would be adjusted for inflation each year.
The city would be responsible for the utility bills; the event staffing, except for game officials; and the infrastructure.
Kozachik, who is a sports event manager and a hockey fan, said the draft deal is the third in three weeks of negotiations between the Coyotes and the city.
Kozachik said he’d like to see a stop-loss provision, so that if the city were to lose money beyond a certain dollar amount, it would be able to pull out of the deal.
Net revenue from the concession sales, parking, advertising and arena-naming rights would be split 50-50 between the team and the city. The team would keep all of the revenue from other merchandise sales, like souvenirs.
The city could collect annual net revenues ranging from $249,270 to $476,445, City Manager Michael Ortega told the Tucson City Council in a memo.
Plus, the city will get 30 reserved seats at home games for free.
The agreement says the team will play at least 29 home games in Tucson but lets it play up to five games in the Phoenix area.
The city and Rio Nuevo would add $3 to the cost of a game ticket in surcharges to help pay for arena improvements and operations. Some of that money would be set aside in a special fund to help pay for arena repairs and upgrades as needed.
The agreement also describes how the team can book dates for the arena while still giving some use of the arena to the University of Arizona club hockey team and to trade shows that use the convention center.
The agreement gives the team exclusive use of some of the arena facilities, which could affect other events like large concerts.