Night club sued by neighboring restaurants - East Valley Tribune: East Valley Local News

Night club sued by neighboring restaurants

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Posted: Sunday, May 16, 2010 3:34 pm | Updated: 3:40 am, Sat Oct 8, 2011.

A Chandler night club that celebrated its grand opening last weekend is being sued by three nearby restaurants who are concerned about parking issues and a night club in the area.

The restaurants — Outback Steakhouse, Carrabba’s Italian Grill and Charleston’s — which neighbor the Phase 54 club off Interstate 10 and Ray Road in Chandler Gateway West, filed a lawsuit two weeks before the grand opening asking that the club not open.

However, Maricopa County Superior Court Judge John Rea allowed the club to open as planned on May 7.

The 26,100-square foot, two-story club, has a 4,000-square foot outdoor patio, a 5-foot tall large stage with full lighting and sound for bands and dancers to perform in a concert atmosphere. A resident DJ plays top 40 music at the club, which has 50 employees.

Phase 54, which is open from 8 p.m.-2 a.m. Wednesday through Saturday, also features a large wine cellar. An upstairs VIP bar is expected to open in three months, said Jon Harris, the club’s owner.

“I loved this building, and the location is incredible,” said Harris, an Ahwatukee resident. “This area has had a need for something like this.”

Harris said he was “shocked” to hear about the lawsuit. There were no objections at public hearings during the city permit acquisition process and five-month construction period where the club’s structure, which formerly housed a furniture store, was completely gutted at a cost of more than $1 million, Harris said.

OSI Restaurant Partners Inc. in Tampa, Fla., which represents Outback and Carrabba’s, sent Phase 54 a letter, dated March 11, asking that the club comply with 10 requests. Among them, opening no earlier than 8 p.m., starting events no earlier than 10 p.m. and refraining from “nude, semi-nude, or body painting entertainment, strip show, or any entertainment which is a public or private nuisance.”

Phase 54’s Phoenix-based lawyer, John Moshier, sent a letter back that day agreeing to the terms, save for a request to pay $400 per event to OSI. However, the club agreed to provide parking-lot security pay for any damages to the lot.

“I trust that with these modifications the parties will be able to enter to an appropriate agreement relating to conditions for Phase 54’s use,” Moshier wrote. “Phase 54 is looking forward to the economic synergy and good relations it expects to share with the Lot 2 owner.”

Moshier said he was surprised at the lawsuit, since he believed an accord with the restaurants had been reached.

The lawsuit, filed April 22, alleges that the Chandler Gateway West’s covenants, codes and restrictions prohibit a venue that has alcohol sales of more than 35 percent of the total annual food and beverage sales.

Phase 54 does not sell food. Harris said that before the lawsuit, he was negotitating with Charleston’s to provide appetizers for club patrons.

Harris said he was granted an codes exemption from the property owner to open the night club.

The three restaurant’s managers would not comment, and neither would a public relations manager with OSI Restaurant Partners. The groups referred to a statement that centered on the restaurants’ concern of providing adequate parking for customers.

“The addition of a new establishment to the existing tenant mix (three restaurants and a bank) on a 6-acre lot would negatively impact the existing parking situation significantly,” the statement said. “This situation in [sic] not about us disapproving a nightclub but rather about recognizing the limitations of the space as this lot does not allow for shared use of the existing parking spaces to adequately support everyone’s business.”

Jeff Kurtz, an assistant planning director with Chandler, said the parking lot “matches standard parking requirements” of 5.5 spaces for each 1,000 square feet of building.

The Chandler Chamber of Commerce hosted a ribbon-cutting ceremony at the club on its opening night. Brad Ness, the chamber’s director of member services, said he thinks Phase 54 is going to be a “great venue” and doesn’t understand why the restaurants are objecting so late in the process.

“I thought it would be a very good fit for the area and complement the restaurants,” Ness said. “People would go there for a dinner and then go to Phase 54.”

Phase 54 is the only night club in Chandler, and Ness said “it’s very high class.”

“I think there’s some confusion in the culture of the venue,” Ness said.

Harris and Moshier said they believe the restaurants’ corporate offices have concerns with the clientele. Moshier said it has been made clear that the concerns were “largely racial,” and he expects the issue to come up during a trial.

However, Harris and Moshier still want to work with the restaurants and avoid a courtroom.

A preliminary-injunction hearing is set for May 26.

For more information on Phase 54, visit

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