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Tempe sued by Phoenix over Arizona Coyotes arena development

The city of Phoenix Aviation Department is suing Tempe over the proposed Arizona Coyotes arena development, arguing the city’s rezoning of the site breaks a deal to limit housing near Sky Harbor International Airport.

The lawsuit, filed in Maricopa County Superior Court, is based on a breach of contract claim, asking the court to rescind Tempe’s recent zoning and land use changes and prohibit future residential uses in an area that the Federal Aviation Administration says is incompatible with residential development.

The Coyotes are not a party to the suit.

The dispute involves the 1.2-square-mile site envisioned as the Arizona Coyotes arena development site, site, which would include housing and commercial development in addition to the new arena for the NHL team. According to a city press release, the site is adjacent to the airport and exposed to noise levels exceeding 65-decibel day/night level (65 DNL). The Federal Aviation Administration recently re-affirmed the boundaries of this high noise area and confirmed that it is not compatible with housing. The cities of Phoenix and Tempe formally agreed back in 1994 that Phoenix would actively defend a modified flight path that follows the Salt River bottom in order to keep departing planes away from homes, while Tempe promised not to permit the development of homes under that modified flight path in the 65 DNL.

“The Phoenix Aviation Department does not object to a sports arena, restaurants, shops, and other compatible uses related to the proposed Tempe Entertainment District,” said Phoenix Director of Aviation Services Chad Makovsky via City of Phoenix press release. “Today’s action is about ensuring Tempe lives up to its commitments to protecting our state’s largest economic engine – Phoenix Sky Harbor International Airport, the more than 57,000 employees and 44 million annual travelers who depend on the Airport, and the communities surrounding the Airport who depend on the long-standing agreement between our two cities.”

The rationale for the lawsuit, according to Phoenix, is to avoid Phoenix Sky Harbor litigation from residents of any new housing development. According to the city, impacted residents in these areas are expected to respond by taking actions such as filing noise complaints, lawsuits, and other initiatives to reduce or halt airport capacity and development in an attempt to obtain relief.

“After more than a year of meetings and negotiations, we are disappointed that these efforts did not resolve the dispute.” said Makovsky. “As neighboring cities that mutually benefit from Sky Harbor, which drives our region’s tourism, travel, and trade economies, we felt we were very close to a reasonable resolution.  We are now left with no other option than to put this in the hands of a judge to confirm the obligations Tempe agreed to in 1994.  Of course, Phoenix remains open, even during this litigation, to a solution that honors the integrity of the 1994 agreement between our two cities and continues to protect the Airport and the residents who live near it.”​​

The lawsuit is somewhat of a surprise; in December meetings between Sky Harbor officials and the arena developers led to the city pulling back its opposition to the development.

The proposed $2.1-billion development calls for the new Arizona Coyotes arena, almost 2,000 apartments and an entertainment district with the usual offerings (retail, restaurants, etc.) on 46 acres of Tempe land west of Town Lake. The Coyotes ownership would pick up the cost of construction with private financing, backed by some $100 million on tax breaks on revenue that wouldn’t exist without the development. The site is currently used as a city operations yard and before that a municipal landfill. Despite that provenance, the site is a relatively attractive one for development due to its size and location. A May referendum is next up on the political process for the development.

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