Grand Canyon Institute releases policy analysis of Arizona Coyotes arena
The Grand Canyon Institute released a report on the impacted that a proposed new national hockey league area and residential and entertainment district would have on Tempe. Dave Wells, the Research Director at the Grand Canyon Institute, conducted this study and joined Horizon to discuss the findings.
This independent policy analysis began two months ago, and the report was released Monday. The study considers: how the arena would create challenges for the use of the Footprint Center and Gila River arena, and the economic impact of the arena and music venue.
“You’re looking at new people coming to Tempe who would not have other wise have come to Tempe, or people in Tempe staying in Tempe and spending money in Tempe,” said Wells.
Wells looked at the revenue this would create and compared it to subsidies that the venue would provide to the Coyotes. According to the report, an estimated 90% of arena-goers to be bringing new revenue to Tempe. The other ten percent would be replaced revenue.
“That means that Tempe is going to lose money on that ten percent,” said Wells.
According to Wells, this study looks at numbers in a way that most other studies have not. They are taking into account inflation in a different way.
“If you look at [the other reports’] numbers, they’re what you call nominal numbers, in name only,” said Wells. “What that does is when you look at the effects years from now, it looks like it’s big, compared to now.”
Wells said he used a net present value, with takes accounts the current value of money at a higher weight that the predicted future value.
The study also looked at the how the proposed Tempe Entertainment District with the arena would compare with possible alternative uses for the land.
“We remove the arena, we remove the music venue, we removed half the hotel space and replaced it with- and then about half the retail space – and we replaced it with about 50% more office space and 50% more residences,” said Wells. “When you add of all the prospective tax revenue to Tempe, it came out about the same.”