The short version
Los Arcos, Scottsdale’s first enclosed mall, opened in 1969 at Scottsdale and McDowell roads and spent the 1990s dying as shopping moved north. In 1996 Steve Ellman bought it, and in 1998, as owner of the Phoenix Coyotes, he proposed rebuilding it around a hockey arena. The council created a special district that could recapture sales taxes from the site to help pay for it.
Opponents forced a referendum and lost it in May 1999, about three to two. That November voters in Scottsdale and two neighbors approved the district’s share of state sales tax. The mall came down in 2000. Then, in April 2001, Ellman took the team to Glendale. The corner sat empty until ASU built SkySong there.
The district
On December 17, 1998 the council adopted Resolution 5209 creating the Los Arcos Multipurpose Facilities District. The NO PUCKS committee gathered signatures, “supported by more than 8000 local citizens,” to refer it to the voters. Its argument was money: “This blizzard of ads is paid for by The Phoenix Coyotes and The Ellman Cos. … the project actually will divert almost $500,000,000 in state and city sales taxes from schools, police, hospitals and roads to build a private sports palace.” The Coalition of Pinnacle Peak, the north Scottsdale growth group, said the district “creates a new government in Scottsdale with the power to tax and to destroy neighborhoods and businesses for the benefit of a private developer and team owner,” and a South Scottsdale Revitalization Coalition that “Ellman stands to enjoy hundreds of millions of dollars in corporate welfare.”
The backers answered that south Scottsdale needed it. “We can’t afford to let the Los Arcos area die,” the Vote Yes Scottsdale! committee wrote, and the Chamber stressed that the district “will not involve creating or levying new taxes.” On May 18, 1999 voters upheld the district, 23,166 to 13,548.
The second vote
State law required voters in the communities around the district to approve its share of state sales tax. On November 2, 1999 Scottsdale, Fountain Hills and Guadalupe voted on whether the district could receive “up to one half” of the state sales tax generated on the site “for up to ten (10) years.” All three said yes; in Scottsdale the margin was 23,502 to 16,615. The Associated Press described an 18,000-seat arena and put the public share of the project at $352 million.
The end
Mayor Sam Campana told the city in January 2000 that citizens had said “in May and again in November that it is time to stop the nay-saying,” and warned that “some have already begun talking about another referendum — a third vote.” Demolition began that May. The financing did not come together; on March 6, 2001 the council extended the district by a vote of 4 to 3, and in April 2001 Ellman agreed to build the Coyotes’ arena in Glendale.
Ellman’s side had made its case in plain terms during the campaign. “In this situation, we are putting up all the money, we are taking all the risk,” his company’s senior vice president, Bob Kaufman, told Phoenix New Times in October 1999.
The site waited three more years. Ellman’s next plan, a Walmart, Sam’s Club and Lowe’s center with a 40-year sales-tax subsidy, drew the opposite coalition and lost at the polls, 29,444 to 5,856, in March 2004 (see the Los Arcos referendum). That May the ASU Foundation bought the land and sold it to the city, which leased it back to build SkySong, the ASU Scottsdale Innovation Center. The arena fight shows a pattern of the decade: the same activists from the Coalition of Pinnacle Peak and downtown who beat the Canals of Scottsdale in September 1999 lost at Los Arcos in May and November. The 1990s politics chapter has the rest.