After ditching Arizona, Coyotes sue to get $3.5M security deposit back

Last year, Arizona Coyotes owner Alex Meruelo pulled the rug from under fans by selling the hockey team for $1.2 billion and prompting its move to Salt Lake City. The sale ended nearly three decades of NHL hockey in Arizona and wrapped up a years-long, unsuccessful saga to find the team a new stadium.

The Coyotes aren't fully gone, though. On Friday, IceArizona, the company that owned the team and that owns the minor-league Tucson Roadrunners, filed a lawsuit in Maricopa County Superior Court against the Arizona Board of Regents, which oversees the state's public universities. At issue is a $3.5 million security deposit for the use of the 5,000-seat Mullett Arena on the Arizona State University campus, where the team played its final two seasons in Arizona.

The Coyotes don't want Arizona, but they would like that money back.

In 2022, the Coyotes entered into agreements with the board of regents and with OVG Venues, which manages the arena to use the facility for three seasons. Two seasons into that agreement — and with just days left in the 2023-24 campaign — Meruelo executed a shocking sale of the franchise to Smith Entertainment Group, the owners of the NBA's Utah Jazz. The team relocated and began playing games in Salt Lake City last year.

Lawyers for IceArizona have not responded to a request for comment, nor have spokespeople for OVG and the Roadrunners, which Meruelo owns. A spokesperson for the board of regents said the board "does not comment on pending litigation."

The lawsuit brought by IceArizona claims that team ownership was "compelled by the NHL to agree to suspend its franchise rights and sell its hockey operations assets." Though news reports at the time characterized the sale as "facilitated" by the league and not necessarily forced, IceArizona claims the sale triggered the "force majeure" clause in its lease, which freed it from any further obligations under the agreement.

The suit says team ownership is therefore owed the return of its $3.5 million security deposit, which OVG and the board of regents "have refused to return." IceArizona's complaint claims that OVG and the board have "offered various excuses" for refusing to return the deposit, including that the contract had not been terminated and that IceArizona still owed a third year of rent.

IceArizona claims it offered to have the Roadrunners play their home games at the arena in lieu of the Coyotes, though OVG and the board of regents only agreed to host a few games. Notably, the Coyotes' lease for Mullett Arena allowed for only NHL games, not minor-league hockey games — any changes would have to have been approved by the board of regents.