By Roland Murphy for AZBEX
Axon Enterprise Inc. requested and was granted a continuance to a “to be determined” date for its hearing before the Scottsdale Planning Commission to evaluate its proposal for a mixed-use headquarters, residential and commercial campus on 74 acres at Hayden Road and the Loop 101 freeway.
Local news outlets report the plans were scheduled for the Commission’s Feb. 14 meeting, having previously been continued from Jan. 24. A scheduled Feb. 6 meeting before the City Council was also continued indefinitely.
At issue is Axon’s plan to build a new corporate headquarters and supporting campus. The company bought the property at an Arizona State Land Department auction in 2020 for $49.1M.
The 401KSF headquarters building is planned for the eastern portion of the site and has already been approved. Problems arose, however, when the company expanded its plan to include a total of 1.57MSF of uses that feature the headquarters and five multifamily buildings totaling 1,975 units, a 425-room hotel and more than 47KSF of commercial use.
Opposition Dug in Quickly
The updated plan immediately drew opposition from residents in the nearby Stonebrook II neighborhood, who claim the development would destroy the character of the area and of Scottsdale, itself, while also creating stark increases in traffic, crime and other negative impacts. Last September, a “whistleblower” disclosure from a rival in real estate development marketing informed officials that an existing agreement prohibited residential uses on the site. Axon has since sought the appropriate permissions to allow the use, but opposition has become entrenched.
In a Feb. 7 letter to the editor published by The Arizona Republic, Stonebrook II HOA President Susan McGarry wrote:
We are not opposed to Taser-manufacturer Axon or its already approved new headquarters. We value our Arizona-based businesses and residents who are here because they want to be here.
But we should not have to sacrifice the character of Scottsdale, its neighborhoods or revenues for public schools to keep Axon or any other business here.
We are the single-family home community that would suffer most from this rezoning. Our property values would plummet, we would lose the quiet enjoyment of our homes and apartment dwellers would peer into our living rooms and bedrooms.
These are standard claims made by development opponents, and many have been categorically refuted over the last 40 years. Chief among them is the assertion that development diminishes property values. Precisely the opposite has been shown to be case, even if that development is as heavily vilified as traditionally designated affordable housing projects.
A 2022 peer-reviewed study in the Journal of Housing Economics and publicized by the Council of Large Public Housing Authorities looked at 500 housing developments from 1997-2006 that used Low-Income Housing Tax Credits and examined their impacts on more than 600,000 nearby residential property sales based on property assessments and sales tax records. The study found surrounding home prices increased by 10%.
It must be noted here that Axon’s proposal does not in any way include or even reference low-income or affordably designated housing.
To our knowledge, no direct studies exist showing the impacts of high-end mixed-use developments, but it is reasonable to infer if LIHTC housing raises nearby residential property values by 10% by bringing new commercial and service outlets to an area, luxury housing, corporate headquarters and supporting uses could have as great or greater positive benefits.
Still, paraphrasing one area city councilmember’s comments at a conference last year, “No amount of facts are able to sway the minds of opponents.”
Axon Faced Process Challenges from the Start
In January, the Scottsdale Airport Advisory Commission unanimously voted against recommending the Axon proposal.
The company also fared badly at the January Planning Commission meeting. The meeting was heavily attended by opponents, and project representatives were peppered with questions from Commissioners, particularly in regards to water usage and the plan’s general degree of detail, leading to the initial request for continuance.
In addition to the Stonebrook residents’ hostility, the development has riled development opponents around the city, particularly those who routinely oppose multifamily plans. “Scottsdale EDGE,” an anonymously published email newsletter targeting nearly all forms of development, has included several items opposing the Axon proposal, frequently accusing the company of engaging in “a bait and switch” by adding the campus plan.
Axon officials have said the supporting campus, particularly the residential component, is essential to attracting the volume and quality of additional workers the company will need to meet its expansion and quality goals. Another local report covered Axon Founder Rick Smith’s comments at the Jan. 24 meeting, during which he reiterated the company’s view on the need for the campus.
Smith said, “Axon is proposing an expansion of its facilities into a true corporate campus including the approved world-class employment center and requested mixed-use component.
“Attracting quality candidates for employment includes providing conveniently located housing and commercial amenities like restaurants and retail.”
That same article called Smith’s closing comment, “a thinly veiled threat,” when he said, “If we don’t do it here, we’re going to continue to grow – we’ll just do it in Seattle, Atlanta.”
That comment, along with Axon’s discussions with planning officials, neighborhood representatives and other “stakeholders” in the process, have led opponents to consistently start branding the company as a “bully.”
Scottsdale EDGE has claimed the company wants the continuances until at least May, when the term of Commissioner Christian Serena ends. Serena has been a consistent opposition ally in challenging the Axon plan. The newsletter also reported on Feb. 16 that Serena notified the City Attorney’s office that “a member of ‘Axon’s leadership’ contacted his employer in an apparent attempt to influence his vote on the Axon case, according to Serena’s written statement.”
Lastly, Scottsdale EDGE has been implying collusion between Axon and Banner Health, which also has a development plan facing opposition in the area, particularly from Stonebrook II residents and their homeowners’ association.
Banner has proposed a four-phase medical center on 52 acres in the immediate vicinity of the proposed Axon campus. That plan has come under attack from service worker and firefighters’ unions. The Scottsdale Fire Fighters Association’s official line of opposition has said the area is already well-served by existing hospitals and that the facility would somehow add to a shortage of medical professionals and support staff, an argument supporters of the proposal have called “baffling.”
In its Feb. 5 email, Scottsdale EDGE pointed out both companies have development plans they are trying to get approved and said, “…both are willing to throw their weight around.” They said, “The two have close ties,” adding, “It’s no coincidence that the chairman of Axon’s Board of Directors, Michael Garnreiter, also serves on Banner Health’s Board of Directors.”
Beyond that, the message offered no specifics on how the two companies may have been working together to influence the outcome of their proposals.
Be Careful What You Wish For
At present, Axon has not publicly disclosed when it plans to bring its proposal back for consideration, nor have there been any reports we have been able to find to show the company is actively looking to relocate. Rick Smith has said he is a proud Arizonan, that Scottsdale is his favorite place, and that the planned location is the company’s definite preference.
Still, economic realities have a way of overriding even the most deeply held sentiment when the growth of major publicly held companies are on the line. Development supporters have said for years the growing resistance to any kind of significant growth in Scottsdale will make developers think twice about relocating there, particularly when other Valley cities have shown much greater openness, even if they do have their own cadres of NIMBY sentiment to contend with.
We have to assume, for the moment, Axon will continue to pursue its plans for north Scottsdale. If, however, the company ultimately fails to secure the supporting development it says is essential to its future plans, and if it decides to move to greener, more welcoming pastures elsewhere, the NIMBY/CAVE/BANANA contingent in Scottsdale will have only itself to blame, particularly if Axon’s decision starts a domino effect of decreasing growth and prestige for the city.
