Arizona Coyotes Development Arm Files Claim Seeking $2.3B from Phoenix City Hall

The Arizona Coyotes and its development arm, Bluebird Development, have filed a claim against the City of Phoenix for $2.3 billion claiming it broke its word on a plan to convert a hazardous unlined Tempe-owned landfill into a new sports and entertainment district next to Tempe Town Lake.

On March 27th, Sky Harbor filed a complaint against the City of Tempe claiming the Tempe Entertainment District plan could not include previously approved multi-family housing because of noise issues. Bluebird claims both cities had agreed for decades that multi-family housing was permitted in airport flight paths as long as the apartments were designed to minimize external noise.

Bluebird claims Tempe’s decision to move forward was based in part on assurances from Sky Harbor not to interfere. On November 29th Sky Harbor’s Chad Makovsky told the Tempe City Council, “A positive and productive relationship between Tempe, Sky Harbor and the City of Phoenix has been and continues to be incredibly important to us.” He added, “I wish you the best as you make this important decision for your community.” Following that statement The Tempe City Council unanimously approved the project’s entitlement, zoning, and development agreement.

According to Bluebird, those supportive statements followed weeks of negotiations in which Bluebird had agreed to indemnify Sky Harbor against any noise complaints generated by future residents of the sports and entertainment district, eliminating any risk to the airport and City of Phoenix.

Bluebird says they are seeking damages because Phoenix is knowingly and intentionally interfering with its business, because Bluebird relied on Sky Harbor’s previous statements indicating it would not be in opposition, and because Phoenix initiated a lawsuit against Tempe, “for the purpose of stonewalling development of the Tempe Entertainment District.” The claim goes on to say that Phoenix appears motivated by “spite and ill will.”

Phoenix is demanding Tempe prevent future residential development in the 65 DNL, and for Tempe to agree to Phoenix’s expansion effort, yet details of those expansion efforts have not been finalized. Despite its agreement with Bluebird, Phoenix is trying to undo the zoning decisions Tempe has already made.

In addition to this claim, the Coyotes and Bluebird will continue to investigate Phoenix and Sky Harbor’s use of taxpayer dollars to interfere with a neighboring city’s election. They will be seeking any and all communications, documents, and negotiations between the City of Phoenix, Phoenix council members, and Phoenix city staff with any and all developers and property/ business owners within Phoenix city limits and similar proximity to Sky Harbor as Tempe Entertainment District.

The damages being sought are $2.3 billion, equal to the entitlement value of the Tempe Entertainment District.

Coyotes President and CEO Xavier A. Gutierrez said, “Phoenix City Hall’s bad behavior seems intended to preserve its downtown sports venue monopoly and has nothing to do with safety or soundness of the airport. While Phoenix bureaucrats have allowed developers to build a basketball arena, a ballpark, and apartments in flight paths, when Tempe attempts to do the same a manufactured crisis arrives.”

Propositions 301, 302, and 303 would clean up an unlined polluting landfill next to Tempe Town Lake and create a sports and entertainment district that includes new restaurants and retail, new multi-family housing, and a new permanent home for the Arizona Coyotes. It is expected to generate more than $690 million in economic benefits to Tempe and create 6,900 permanent jobs. Ballots on Props 301, 302, and 303 will be mailed April 19th and must be returned by May 16th.

Greater Phoenix In Business Magazine

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