Tempe Entertainment District

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Tempe and Phoenix to end lawsuits regarding property rights near airport

Proposed Tempe Entertainment District

In July 2021, the City of Tempe solicited proposals to develop a new sports arena and mixed-use development adjacent to Phoenix Sky Harbor International Airport. Tempe received one proposal from Bluebird Development, a firm that represents the Arizona Coyotes Hockey Franchise. The proposed location is at the northeast corner of Rio Salado Parkway and Priest Drive. On June 2, the Tempe City Council voted to move forward with negotiations on the project and on November 29, 2022, the Tempe City Council voted unanimously to approve land use changes and an agreement with the developer of the Tempe Entertainment District, with the intention of having final approval of the project decided by Tempe voters in May 2023.

On May 16, 2023 the Phoenix Aviation Department sent this statement in response to questions about the election results:

The Phoenix Aviation Department has been consistent that it has no objection to a sports arena, restaurants, shops, and other compatible uses related to the Tempe Entertainment District. However, the residential units included in the project, along with other similar multi-family housing projects recently approved by Tempe, violate a 1994 agreement between our cities which protects residents from living in a high-noise area under Sky Harbor’s flight path. 

The outcome of the election does not change Tempe’s obligations contained in the 1994 agreement.  As neighboring cities that mutually benefit from Sky Harbor, Phoenix understood that Tempe was open to a reasonable compromise that would serve to protect the airport, the communities around the airport, and allow these developments to proceed.  That compromise was, at Tempe’s request, reduced to a simple document that would have amended the IGA to allow current projects to proceed, while also restating Tempe’s commitment to prohibit future residential development within the high noise area. 

We hope Tempe will now take the necessary actions to resolve this dispute.  Phoenix remains open 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.

Please see frequently asked questions and responses from the City of Phoenix Aviation Department.

In the weeks leading up to the November 29 vote, Sky Harbor met with the City of Tempe and worked with the developer to ensure that the airport is provided protections to support its long term growth and future development. Negotiations wrapped up successfully with the developer prior to the Tempe City Council vote. Examples of additional developer protections include consultation on crane heights and mitigations should any crane create performance issues for our airlines, full indemnification against litigation over noise and vibrations caused by aircraft, noise mitigation and insulation, noise disclosures, aviation easements, wildlife studies, traffic mitigation studies and funding, glare/reflectivity mitigation, good neighbor agreement, and restrictions on events that may impact the operation of Sky Harbor.

Sky Harbor also worked with Tempe to seek a permanent resolution on our differences in interpretation of the binding Intergovernmental Agreement that exists between our two cities, and to ensure that Tempe would support Phoenix Sky Harbor's near term infrastructure investment plan.

The City of Phoenix Aviation Department opposes the incompatible residential component of the Tempe Entertainment District development, but we were hopeful that we could work with Tempe to move forward on the commitments made. 

Dec. 28, 2022, We are awaiting confirmation from Tempe, however, if the Tempe City Council agrees to the solution that was negotiated, then Sky Harbor would be happy to report that the dispute between the cities has been resolved.

On March 17, 2023 the Phoenix City Manager, Jeff Barton received two letters from Tempe City Manager, Andrew Ching.

One letter stated that Tempe will not yet affirm their support for the near-term infrastructure investments contained in Sky Harbor’s CAMP (Comprehensive Asset Management Program).

Why is this significant? The proposed Tempe Entertainment District and Modera developments include thousands of residential units directly under the flight path and within the 65 DNL noise contour. It is well documented that people living in 65 DNL high noise contours directly adjacent to airports and under flight paths grow tired of and seek relief from aircraft noise and begin to file complaints which call for constraining airport capacity and growth.  Given Tempe is willfully authorizing residential development in this area, it is appropriate and reasonable that Tempe’s position with respect to the airport be formally conveyed along with assurances that they will continue to support airport development when faced with expected opposition from these residents. In an attempt to resolve this with Tempe, Phoenix participated in a Tempe Council Work Session on Feb. 9. 

In another letter Tempe stated they could not commit to prohibiting future residential development inside the 65 DNL noise contour until they had completed their own noise contour map – even though Phoenix provided Tempe with a letter from the FAAthat removes all ambiguity as to their approval of the 2019 noise contours as the official Sky Harbor noise contours.

Why is this significant? Encroachment and incompatible development must be addressed to protect the long-term future of Sky Harbor.  Differing interpretations of the plain language contained the IGA between the two cities are at the heart of our dispute.  Rather than proceed with protracted and costly litigation to resolve our dispute as is contemplated in the IGA, Phoenix sought to resolve this by coming to an administrative agreement that Tempe either take no future actions to permit incompatible development in this 1.2 square mile section of land, or to resolve our dispute through another form of administrative process such as binding arbitration.

Phoenix was disappointed to receive these two letters from Tempe.  We relied on Tempe to act on a negotiated solution.

On March 28, 2023, the City of Phoenix Aviation Department filed a formal complaint in Maricopa County Superior Court. The City of Phoenix Aviation Department is suing Tempe for breach of contract, asking the court to rescind Tempe’s recent zoning and land use changes and prohibit future residential uses in an area the FAA says is incompatible with residential development. See the Department’s press release for additional information. The complaint also includes multiple exhibits. See those here.

On April 5, 2023 the City of Phoenix received a Notice of Claim letter from the law firm representing the TED developer.  The firm also filed a motion to intervene in Phoenix’ complaint against Tempe.

Phoenix issued the following public response:

Phoenix will respond in due course, but the developer restates the same arguments that the airport, and more importantly, the FAA has already debunked. At the same time, we can understand and appreciate the developer’s frustration. But their frustration is misdirected. They should be frustrated with Tempe. After a meeting with the mayors of both Tempe and Phoenix and two negotiations between the city managers of Tempe and Phoenix, we understood that Tempe was open to a reasonable compromise that would protect the airport, the communities around the airport, and allow these developments to proceed.  That compromise was, at Tempe’s request, reduced to a simple document that would have amended the IGA to allow current projects, including the TED, to proceed, while also restating the commitment to prohibit future residential development within the 65DNL.  That document was sent to Tempe on February 7, 2023, as our Complaint makes clear. We expected to promptly hear input or agreement on that amended IGA. Instead, after over a month of delay, Tempe abruptly ended discussions with its March 17 letters, and the City of Phoenix was forced to sue. A clear and reasonable resolution was in Tempe’s hands and they elected to reject it. We join the TED developer in their frustration.

The following is a timeline of events leading up to the Nov. 29, 2022 Tempe City Council meeting:

Sept. 20, 2021, City of Phoenix Director of Aviation Services Chad Makovsky sent a letter regarding the Tempe Arena Request for Proposals, no. 22-030 (Rio Salado Pkwy & Priest Drive); Arizona Coyotes (IceArizona Hockey Co LLC) & Bluebird Development LLC’s Proposal to Nicholas Wood of Snell & Wilmer on Sept. 20. See the letter.

Sept. 24, 2021, Director of Aviation Services Chad Makovsky sent a letter to the procurement officer for Tempe Arena Request for Proposals, no. 22-030, inviting Tempe officials to begin discussions with Sky Harbor about key features of the proposed development. See the letter.

On Oct. 20, 2021, Airlines for America, which represents the busiest airlines at Sky Harbor, sent a letter on behalf of the Airline Pilots Association, the National Business Aviation Association, and the Regional Airline Association expressing concerns, requesting additional information and urging a thorough evaluation of the proposed development.

On Oct. 21, 2021, staff from the Phoenix Aviation Department made this presentation to the Phoenix Aviation Advisory Board.

On Oct. 25, 2021, the attorney representing the developer of the proposed project sent a letter to the City of Phoenix Aviation Department. On Nov. 2, 2021, the Phoenix Aviation Department responded with this letter.

On Nov. 9, 2021, the attorney representing the developer of the proposed project sent this letter to Phoenix Director of Aviation Services Chad Makovsky as a follow-up to a meeting.

On Nov. 18, 2021, the Coyotes made a presentation to the Phoenix Aviation Advisory Board.

While the City of Phoenix Aviation Department has questions about several items in the Nov. 9 letter and the Nov. 18 presentation, technical meetings will be taking place in an effort to resolve remaining concerns.

While Sky Harbor awaits detailed data from the developer, the City of Phoenix Aviation Department has initially analyzed potential flight traffic over the proposed development. Sky Harbor has repeatedly called on the developer to provide the additional data it needs to conduct, along with its industry partners, a comprehensive analysis of potential impact.  Our goal remains to work cooperatively with the developer to mitigate identified impacts to protect the airport's ability to grow and serve our region for generations to come.

On April 6, 2022, the Director of Aviation Services was copied on a letter the FAA sent to the City of Tempe dated April 1, 2022, regarding the proposed Rio Salado Project. Please see Enclosure 1, an illustration of the proposed TED site PHX.

The Phoenix Aviation Department created a summary of slides that have been used in Phoenix Aviation Advisory Board meetings and other presentations to the community. Each slide was captioned with an explanation and context about the information provided.

Channels 3/5 spoke with community members about their concerns, and with the attorney for the City of Phoenix who wrote the letter to the Tempe City Attorney: https://www.azfamily.com/2022/06/01/phoenix-warns-tempe-about-putting-proposed-entertainment-district-flight-path/

On May 26, 2022 an attorney for the City of Phoenix sent this letter to the Tempe City Attorney amplifying the Phoenix Aviation Department’s concerns about Tempe’s RFP, specifically the inclusion of residential, which violates an Intergovernmental Agreement between Phoenix and Tempe.

On June 1, 2022 the Regional Administrator of the Federal Aviation Administration wrote a letter to the Tempe City Manager reaffirming that the FAA does not support residential development on the site of the Tempe Entertainment District, and that a proposal to sound insulate the new residential development would not solve the issue.

On June 28, 2022, Director of Aviation Services Chad Makovsky sent a letter to Tempe City Manager Andrew Ching correcting statements by the Developer of the Proposed Tempe Entertainment District.

Four former City of Phoenix Mayors wrote this editorial explaining why it is important to the residents of Tempe for the residential component to be removed from the development plan.

On July 14, 2022 Sky Harbor raised concerns about an additional proposed development which would violate the same intergovernmental agreement if approved as planned. 

On Sept. 30, 2022,  the City of Tempe notified the City of Phoenix Aviation Department that it will be considering amendments to the Tempe General Plan to alter the current zoning on the site of the proposed Tempe Entertainment District. The City of Tempe (land owner) is requesting that the land zoning be changed to high-density, mixed-use, to accommodate residential, retail, restaurant, hotel, office, and multipurpose event center development

On Oct. 5, 2022 Director of Aviation Services Chad Makovsky received a letter from the City of Tempe providing its response to the Aviation Department’s June 28, 2022 communication expressing its significant concerns with the Tempe Entertainment District.  Tempe notably increased proposed residential density under the flight path from 1,675 to 2,100+ residential units. Even with the Aviation Department’s ongoing efforts to resolve its concerns with the City of Tempe, this is the first time Tempe has explained its position on the IGA.  Sky Harbor’s staff is giving the letter careful review. However, the Airport’s initial review indicates no new or unexpected elements in Tempe’s position. Moreover, the letter contains little citation of relevant legal authority, ignores key provisions of the relevant documents and has several factual inaccuracies. And, if approved, Tempe’s action will place more residents directly under Sky Harbors busiest flight path in the 1.2 square mile high noise area than Sky Harbor has been able to eliminate over the last 25 years. 

Tempe announced that the Tempe Entertainment District proposal would be heard at two public hearings before the Tempe City Council at 6 p.m. Tuesday, November 22 and 6 p.m. Tuesday, November 29. Meeting details are posted on the City of Tempe’s website.

On November 14, 2022 the Director of Aviation Services sent a letter to Tempe’s principal planner in advance of the Development Review Commission meeting.

On November 15, the Tempe Development Review Commission approved the application for the rezoning of the proposed Tempe Entertainment District site, a clear violation of the City of Tempe’s binding Intergovernmental Agreement (IGA) with the City of Phoenix where Tempe promised not to introduce incompatible land uses under the airport flight path. Phoenix Sky Harbor International Airport is not opposed to a Coyotes arena or an entertainment district at the corner of Priest and Rio Salado in Tempe, but continues to object to planned residential high rises in that location. Including multi-family housing in the Tempe Entertainment District development would place up to 2,100 residential units in a high noise area directly under two converging flight paths – and in a location where Tempe and Phoenix agreed there would be no housing. The Airport is disappointed that the Tempe Development Review Commission approved the general plan/zoning map amendment with the residential component remaining in the plan.

On November 16, 2022 the Phoenix City Council approved the lease of airport-owned land to the Phoenix Rising professional soccer organization for a temporary outdoor stadium. The site is not under the flight path.