The auction for 95 acres of land in north Phoenix, which was scheduled to take place on Thursday with a starting price of $68.5 million, has now been halted.

The commission has determined that owner Alex Meruelo must now seek a Special Use Permit to build an arena on the property, despite it already being zoned for such a purpose. This decision has left the Coyotes, who were taken aback by the move, concerned about the future of NHL hockey in the desert.

Meruelo, who was paid $1 billion for the team while retaining the trademarks, team name, and rights to an expansion franchise, is now faced with limited options. NHL commissioner Gary Bettman had previously stated that Meruelo cannot sell his option to anyone else. Furthermore, if certain deadlines pass without the arena being built, Meruelo risks losing those rights altogether, potentially putting Arizona in line for an expansion team like any other city.

The Coyotes, in a statement, have threatened to explore all legal options in response to what they term as a "shortsighted decision" by the State. However, the harsh reality is that this latest setback could cause substantial delays and potentially even kill the $3 billion arena deal.

Adding to the complications, Phoenix mayor Kate Gallego has expressed her opposition to providing Meruelo with any tax abatements to construct a new facility. Particularly, she is not keen on having another arena in competition with the city-owned Footprint Center, where the basketball Suns and Mercury play.

The future course of action taken by Meruelo and the NHL remains uncertain, according to an insider familiar with the situation. However, one thing is clear - the decision made by the Arizona State Land Commission will undoubtedly create significant roadblocks and could potentially derail the plans for the Arizona Coyotes' arena.

"While the delay in the auction may be disappointing, the change in timing is a prudent decision," stated the commission in defense of its ruling. The fate of NHL hockey in Arizona hangs in the balance as stakeholders navigate these challenging circumstances.