Coyotes development firm files $2.3-billion claim against City of Phoenix

April 5, 2023

The Coyotes and their development firm, Bluebird Development, announced a $2.3-billion claim against the City of Phoenix. The suit is for damages caused by Phoenix’s legal filing on March 27 for a breach of contract, which is “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.”

Here is the full news release Bluebird Development:

The Arizona Coyotes and its development arm, Bluebird Development, have had enough of Phoenix’s bullying bureaucrats. And now the City of Phoenix is facing a $2.3 billion claim after it broke its word and decided to undermine 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 unexpectedly 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. Oddly, 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.

Indeed, 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.

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 is 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. The lawsuit from Phoenix to Tempe is ridiculous and nothing more than a political stunt and meritless lawsuit. Indeed, the City of Phoenix tried to get the Coyotes to “lean on” Tempe to accept Phoenix’s proposed IGA amendment.

We will not stand for Phoenix bullying Tempe and will vigorously push back on Phoenix’s shenanigans.

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. Furthermore, 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.

Beyond ultimately untruthful assurances made by the City of Phoenix, there are decades of correspondence between Phoenix and Tempe indicating that multi-family housing is permitted in Sky Harbor flight paths. Collectively the two cities have approved more than 4,000 residential units in the flight zone.

In addition to the claim, attorneys for the Coyotes are also seeking documents from Phoenix related to a malicious dark money newsletter opposing the entertainment district which was sent to Tempe residents. They are also pursuing other claims against the City of Phoenix such as the illegal use of government resources by the Phoenix City Council and staff to influence an election. That influence extends to the newsletter as well as Sky Harbor’s actual complaint filed just before ballots go out in Tempe.

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. And Tempe and its residents don’t have to pay for it.

Ballots on Props 301, 302, and 303 will be mailed April 19th and must be returned by May 16th. To learn more about this great plan go to www.TempeWins.Com.

Here are the associated legal documents that include the notice of claim and litigation hold sent to the City of Phoenix, along with a motion to intervene and a motion to dismiss filed in court.

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