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Chief
Just be honest about your planned move. You were upfront about the temp status of the job and you are sorry they assumed you were hoping for temp to perm. You wish you’d made that clearer and hope there are no hard feelings as you enjoyed your time there and if you are ever back in that city you’d love to be in touch...
I agree with VP1 - Just be honest that you're planning to relocate and you wish them the best.
If they're super pissy about it, just let the temp contract expire and never bring it up. Just finish out the contract, walk out, and don't look back.
Conversation Starter
They did not seem to take it well that I declined their offer and had other long term goals (even though I'm a temp...). I can tell one of my managers has turned sour about it. Received another job offer in the city I planned to relocate to, and not sure how to have the resignation talk after all this. They made the discussion where I turned down their offer hella awkward and now I don't know how to approach this