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Arizona Coyotes countersue Phoenix for $2.3B over Tempe arena deal challenge

sam kmack, arizona republic
·3 min read

The Arizona Coyotes have countersued Phoenix for $2.3 billion in a response to the capital city's own lawsuit on March 28 that sought to upend the professional hockey team's massive development deal on Tempe Town Lake.

The project is set to go in front of Tempe voters on May 16. It involves building a hockey arena, an entertainment district and nearly 2,000 apartments on 46 acres of city-owned land west of Town Lake. The site has previously housed a landfill and sits about two miles from the Phoenix-owned Sky Harbor International Airport.

Phoenix spent the better part of 2022 arguing that the project would violate its decades-old agreement with Tempe that dictates how close housing can be to the airport, a policy meant to protect residents from excessive airplane noise and shield Sky Harbor from related litigation.

But Sky Harbor said in November that it would back the project if certain conditions were met. The NHL franchise made a number of promises, including protecting the airport from noise-related lawsuits, but Tempe could not meet two of Sky Harbor's other demands: that the city wouldn't oppose future airport growth or build any more housing nearby.

The Arizona Coyotes hope to see water return to the portion of the dry Salt River where the project would sit and say the team's proposal could be a catalyst for that to happen in the future.
The Arizona Coyotes hope to see water return to the portion of the dry Salt River where the project would sit and say the team's proposal could be a catalyst for that to happen in the future.

TENSIONS BUILT OVER THE YEARS: A brief history of the feud that could kill Tempe's Coyotes deal

After the negotiations went sour, Phoenix filed its lawsuit in Maricopa County Superior Court to nullify Tempe's land use changes that are needed to make the development possible. Now, the Coyotes have filed their own lawsuit ― seeking $2.3 billion, or the price of the proposed project ― saying Sky Harbor is "reneging on its public promise not to oppose" the deal.

"(The Coyotes' developer) is seeking damages because Phoenix is knowingly and intentionally interfering with its business, because (we) relied on Sky Harbor’s previous statements indicating it would not be in opposition," team representatives wrote in a news release. "We will not stand for Phoenix bullying Tempe and will vigorously push back on Phoenix’s shenanigans."

The team's court filing on Tuesday also asks the judge to reject Phoenix's original lawsuit. The Coyotes argue that, under Arizona law, the original complaint was either "filed too soon" or "too late" because it was submitted after the Tempe City Council sent the project to the ballot but before voters had a chance to weigh in.

"Either way, the lawsuit should be dismissed to the extent it seeks to undo the (Coyotes) project currently subject to referendum," the team's lawsuit continued.

READ PHOENIX'S LAWSUIT: Motion to intervene | Motion to dismiss

As the increasingly complex legal battle rages on, Phoenix's March lawsuit is aimed at Tempe, not the Coyotes. The franchise's project is caught in the middle of a fight between the two cities, which have disparate interpretations of a 1994 agreement about development rules.

The cities disagree about what types of housing are allowed near Sky Harbor under that rule. Phoenix says all housing is banned in areas with loud plane noise, but Tempe believes that apartments are all right if they are soundproofed ― and the team needs Tempe's interpretation to be correct in order for the deal to pencil out financially, according to Coyotes officials.

WHAT'S ON THE BALLOT? Tempe-Coyotes deal needs these 3 ballot items to pass in May

Phoenix vowed to fight the Coyotes' countersuit but said the team's frustration was "misdirected." Sky Harbor officials contend that the project developers should be upset with Tempe for not squashing the dispute by meeting Phoenix's "reasonable" terms before legal action took place.

"We can understand and appreciate the developer’s frustration. But their frustration is misdirected. They should be frustrated with Tempe," Phoenix wrote in a Tuesday news release. "A clear and reasonable resolution was in Tempe’s hands and they elected to reject it. We join the TED developer in their frustration."

This article originally appeared on Arizona Republic: Coyotes launch $2.3 billion lawsuit against Phoenix over Tempe feud