The Arizona Coyotes were sold following the 2023-24 NHL season and recently became the Utah Hockey Club. Former owner Alex Meruelo retained the rights to the Coyotes branding, though. And he had the right to reactivate the franchise down the line. However, after a canceled land auction for a potential new arena, things have changed. Meruelo is reportedly “walking away” from the Coyotes and does not intend to pursue other arena options, according to PHNX Sports reporter Craig Morgan.

This development comes after the Arizona State Land Department canceled a land auction in North Phoenix. Meruelo and the Coyotes wanted to win this auction to build a new permanent home for the franchise. Arizona had played its last two seasons in Mullett Arena, home of the Arizona State University men's ice hockey team.

Meruelo sold the hockey side of the Coyotes to Utah Jazz owner Ryan Smith in April. As a result of the transaction, the players and hockey operations staff became the Utah Hockey Club. However, the business staff and Arizona team branding remained with Meruelo.

More information on canceled land auction

Coyotes owner Alex Meruelo speaks to the media at a news conference announcing his new ownership at Gila River Arena in Glendale on Thursday. Thomas Hawthorne/The Republic Coyotes owner Alex Meruelo speaks to the media at a press conference announcing Meruelo's new ownership of the Coyotes at Gila River Arena in Glendale, Ariz. on July 31, 2019.
Thomas Hawthorne, Thomas Hawthorne/The Republic, Arizona Republic via Imagn Content Services, LLC

The Arizona State Land Department released a statement after canceling the auction. In this statement, they mentioned that the plans to build this new Coyotes arena required a Special Use Permit. However, it appeared as if Alex Meruelo did not have this permit, and asked for him to apply for the permit before the auction.

“We are requesting that the applicant file for and receive a Special Use Permit prior to the auction. This affords the applicant and ASLD certainty that the applicant can build what it intends to build for its anchor tenant. It is not uncommon for ASLD to require applicants to secure zoning/use permits prior to auction,” the statement reads, via PHNX Sports.

The Coyotes operated under the assumption that the land was properly zoned when they first began their pursuit. Concerns over the zoning of this land arose in December. Soon after, the City of Phoenix confirmed the area is not zoned for an NHL arena.

“Staff has verbally told the Coyotes that the most analogous use is a stadium type of facility for large public gatherings and that requires a special permit to be approved by the Mayor and City Council through a rezoning process. The other option would be to rezone the site to an appropriate zoning district that allows for the arena use like a special permit for the portion of the land that would comprise the sports arena,” city spokesperson Teleia Galaviz told PHNX Sports.

Galaviz mentioned that another group zoned this area of land for a youth hockey rink. That project called for a 3000-seat arena for ice hockey games and volleyball practice facilities. Zoning for this project is vastly different than the proposed 17,000-seat stadium and entertainment district the Coyotes planned to build.

The Coyotes already had an uncertain future before this. Somehow, things are even more uncertain. Alex Meruelo stepping aside is certainly a surprise. It'll be interesting to see how that affects the inactive Arizona franchise moving forward.