The land auction that the Arizona Coyotes expected to win on Thursday as the first step toward building a new arena has been canceled, according to the Arizona State Land Department.

The news, coming six days before the scheduled auction, severely diminishes owner Alex Meruelo's chances of finding a new site to restart an NHL franchise in Arizona after he sold the team to a Utah group in April. He agreed to a deal with NHL Commissioner Gary Bettman that would allow him to restart the team within five years.

“After careful consideration, the Arizona State Land Department (ASLD) has determined that it is in the best interest of the Trust to cancel the auction and reorder the steps,” the ASLD said in a press release. “The ASLD recently confirmed that the proposed use of the arena requires a special use permit. For this reason, we are requiring the applicant to apply for and obtain a special use permit prior to the auction. This will provide the applicant and the ASLD with certainty that the applicant can build what it intends to build for its primary tenant. It is not uncommon for the ASLD to require applicants to obtain zoning/use permits prior to the auction.

“We understand that the delay of an auction is a disappointment to our applicant and the public, but the change in timing is the Trust’s prudent decision. ASLD remains open to
We are working with our applicant to put the land up for auction in the future if a special use permit is granted.”

The applicant listed in the ASLD is Miracle Development, LLC, the Coyotes' project.

As of Friday, only Miracle Development, LLC, was registered as a bidder for the property at the northwest corner of Loop 101 and Scottsdale Road near Desert Ridge Marketplace, according to PHNX Sports.

The Arizona State Land Department had scheduled an auction for the land in April. Weeks later, it came to light that the NHL franchise's hockey operations, including roster and management, had been sold to a group owned by Utah Jazz owners Ryan and Ashley Smith.

“My family and I are committed to winning this land auction and building a transformative entertainment district that, for the first time in Arizona history, will not require taxpayer dollars,” Coyotes owner Alex Meruelo said in a statement released after the announcement. “We will buy this land, build this facility and complete a project that will cost more than $100 million in infrastructure improvements without burdening the taxpayer.”

“We are excited that the proceeds from our land auction will also generate revenue to fund local education throughout the state of Arizona and support the communities that have been so loyal to the Coyotes for many years,” added Meruelo. “Arizona is our home and an incredible market that the Coyotes are a part of. This district would provide a beautiful home for the Arizona Coyotes for decades to come. Our loyal fans deserve this vibrant gathering place that would serve as a landmark and create lifelong memories.”

Arizona Sports John Gambadoro reported before the ad was published that Meruelo had spoken to potential buyers inside and outside of Arizona to gauge their interest in purchasing the NHL franchise.

A March 14 meeting of the state Department of Lands cleared the auction of that land, according to the agenda, which also lists Coyotes founder Miracle Development LLC. The auction had to be publicly announced at least 10 weeks before it was held.

The Arizona State Land Department's Board of Appeals unanimously approved the 95 acres' appraisal at $68.5 million. Bidding will start at that amount and must be in increments of at least $100,000.

The auction bid included a letter from the City of Phoenix outlining public infrastructure obligations to a potential developer, including land use information and fire, water and traffic recommendations. The estimated cost of these improvements is $80 million, according to the auction announcement.

The Coyotes said in their statement that the facility will include a 17,000-seat arena and a 150,000-square-foot training facility.

There will also be a 3,000-square-foot concert hall, 37,000 square feet of retail space and a multi-purpose party plaza with an oversized screen for viewing events. The district will be covered by a 15,000-square-foot canopy stretching from the arena to the theater.

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