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Tempe sued by Phoenix to halt Arizona Coyotes’ arena development deal

State capital alleges residential plans violate 1994 agreement with Sky Harbor International Airport.

30 March 2023 Josh Sim

Arizona Coyotes

  • Coyotes’ proposal to build arena, entertainment district and apartments approved by Tempe City Council last year
  • Phoenix wants initial approval for deal to be rescinded

Phoenix has launched a lawsuit to stop a deal between its neighbouring city of Tempe and the National Hockey League’s (NHL) Arizona Coyotes which allowed the franchise to build a new arena, entertainment district and nearly 2,000 apartments.

The Coyotes’ proposal, which will cost US$2.1 billion to carry out, was first proposed in September 2021. They estimate the entertainment district will generate US$13.1 billion of new spending on site, and have committed to investing US$2.1 billion in private funds for the arena project ‘without raising taxes or using current city revenues by issuing public infrastructure bonds sold to private investors’. Last November Tempe officials gave initial approval for the project, with residents to vote on the decision as part of a special election on 16th May.

The agreement has now hit a stumbling block with Phoenix suing Tempe for an alleged policy violation regarding a 1994 agreement that limits how close housing can be located to the state capital’s Sky Harbor International Airport. The policy aimed to save residents from unwanted loud plane noise, as well as protecting the airport from any noise-related litigation.

In a filing made in Maricopa County Superior Court, Phoenix’s aviation department has now called for the initial approval of the deal to be rescinded, bringing the project to a complete halt as a result, as well as a repeal of any recent zoning and land-use changes.

‘Tempe, for its part, promised to prevent new residences from being developed along much of this flight path and, more generally, on the airport’s east side. Both measures have helped protect residents from aircraft noise, while also supporting the increasing demands for more flights for Arizona residents and visitors,’ the lawsuit reads.

‘Despite these promises, Tempe now has done exactly what it promised not to do: approve, or start to approve, more residences near the airport and in the area to which aircraft have been directed for decades.’

Phoenix has strongly objected to the development project for a while, but in December the city’s director of aviation services Chad Makovsky had seemingly green-lit the proposal after a provision was added that would require the Coyotes to defend the airport in court against any excessive plane noise lawsuits from new residents.

However, he has now reversed his position, stating that a ‘reasonable resolution’ was close to have been agreed before relations went south. Without providing an explanation for why negotiations broke down, he issued a statement that said: “After more than a year of meetings and negotiations, we are disappointed that these efforts did not resolve the dispute.” While not mentioning the Coyotes, the official added that his department ‘does not object’ to the proposed arena or entertainment district, with the focus placed solely on Tempe.

It is not the first time Phoenix has opposed a sports development based in Tempe. In 2001, the state capital threatened legal action to halt Tempe’s bid to build a US$335 million stadium for the National Football League’s (NFL) Arizona Cardinals, which would have been located near the airport’s north runway. Tempe eventually gave up its efforts after it became clear constructing the venue would lead to lawsuits.

While the city has not yet commented on the lawsuit, Tempe Wins, the development company behind the project, launched a stinging attack on Phoenix and its lawsuit.

‘The complaint filed by the Phoenix Aviation Department represents new heights of hypocrisy,’ their statement said. ‘While it is okay for Phoenix to build a baseball stadium, a basketball arena and a soccer stadium in the flight path of Sky Harbor Airport, somehow, it’s wrong when Tempe attempts to convert an old polluting landfill into a new sports and entertainment district.

‘The ultimate question for Tempe voters is this: Do you stand with Phoenix hypocrisy or an incredible environmental and economic opportunity for Tempe?’

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