By Roland Murphy for AZBEX
Relying on an unusual legislative technique that allows the replacing of a previous bill’s text with entirely new language, the Arizona Legislature is once again considering changes to State law that could empower one of Arizona’s top employers to build the project it says is essential to its continued residence in the state.
Representative Tony Rivero put forth an amendment to Senate Bill 1543—a bill that had looked to address homestead exemptions—that would, instead, create approval exemptions for companies seeking to build international headquarters with mixed-use campuses in cities of between 200,000 and 500,000 residents.
AZBEX has previously provided extensive coverage on the controversy surrounding Axon’s proposals, its NIMBY opposition and the union and political agitation groups looking to scrap the development. (AZBEX: Feb. 6; Jan. 22; Jan. 10; Dec. 17, 2024; Dec. 16, 2024)
Scottsdale City Council approved zoning and development agreements for Axon to build a 401KSF headquarters with nearly 1,900 multifamily units, six retail buildings, a 435-room hotel, and seven restaurants at Hayden Road and Mayo Blvd. last November. The approval was immediately followed by a successful petition by former Councilmember Bob Littlefield and his anti-apartment group Taxpayers Against Awful Apartment Zoning Exemptions, also known as TAAAZE, with nearly $500K in both “in-kind donations” and direct funding from a local political activist group and a California labor union that had tried to coerce Axon into approving a representative labor agreement for businesses on the site.
That referendum drive secured enough signatures to put the issue on a future ballot. The next general election for which the referendum would be qualified is Nov. 2026. Scottsdale Mayor Lisa Borowsky and all the new Council members who were voted into office in the last election have significant constituencies in the anti-apartment camp and have declined to call for an earlier special election, allegedly to avoid the cost to the City to hold it.
Axon CEO Rick Smith has announced the company will leave Arizona if it is not allowed to build the new development. Axon has a market capitalization of more than $43B and employs approximately 900 Arizonans. Economic development officials have said the company leaving Arizona could not only harm the state through the immediate loss of such a high-value, high-profile resident, it would create a ripple effect that could harm the state’s competitiveness in drawing new businesses, particularly those that might want to relocate headquarters here.
The opposition has remained unwavering, as has Axon, and the Council has remained stock still except to speak out against attempts in the Legislature to work around the referendum.
Legislative Efforts
Rivero’s measure changing SB 1543 is not the first attempt to create legislation that would shut down the NIMBY efforts against Axon. Earlier efforts—Senate Bill 1352 and House Bill 2925—would have retroactively classified zoning as an administrative, rather than legislative, process, which would have made it ineligible for nullification by referendum.
Those efforts stalled during the legislative process and were vocally opposed by many cities and their lobbyists, who claimed they were infringements on municipal sovereignty.
According to an overview in Phoenix Business Journal, the new rules under SB 1543 would give developers the right to build multifamily residential and hotel projects on light industrial-zoned land that is part of a headquarters development. Cities would also be prohibited from denying permits and certificates of occupancy for multifamily units if the number of units is equal to or greater than the project’s gross acreage times 28. Hotel rooms would be allowed up to the number of acres times seven.
Retail and restaurant areas would also be allowed on headquarters campuses with light industrial zoning.
The bill was passed on an 8-0 vote in a hearing of the House Committee on International Trade this week. Its odds of approval by the full Legislature are unknown, since Senate President Warren Petersen and House Speaker Steve Montenegro opposed the previous Axon-saving bills.
TAAAZE’s Littlefield has pledged to fight the bill and claims to have formed a political action committee to oppose the measure in court and through voting measures if it passes.
During the March 26 hearing, two current Scottsdale City Council members expressed their opposition in person, and an opposition statement from Mayor Borowsky was read into the record. Former Arizona legislator Michelle Ugenti-Rita spoke on TAAAZE’s behalf and reiterated its opposition, saying the apartments were “100%” the reason driving the opposition, according to the Arizona Republic.
Speaking in favor of the bill were Smith and Peoria Mayor Jason Beck, among others.
Smith told the Business Journal, “If these bills fail, I’ve been directed by the board of directors to sell the land and accept an offer from a competing state where we don’t have this business risk, and Axon will leave the state of Arizona. We’re in negotiations to sell the land so that we’re not starting from a cold start and [the site] will end up being a fulfillment center … and $15 an hour jobs.”
During the hearing, Smith said, “I think at this point the (Axon board) has seen Arizona as an unpredictable business environment based on all the work that went into this, and there’s $70M invested into this, that’s been thrown back to the starting point. Frankly, the new Scottsdale City Council has run … very staunch anti-apartment and anti-development. We don’t hold out any hope that we’d reach a solution with them.”
Committee members criticized Scottsdale for its increasingly anti-development stance, particularly in regard to apartments. They also said they would like to see additional negotiations between Axon, the City and the opposition to try to reach some sort of resolution.
Smith’s comments during the hearing and previously indicate Axon is tired of trying to accommodate opponents. Prior to the zoning and development agreement approval last November, the company had made significant alterations to its original plan, reoriented the residential and hotel portions and changed the site’s access points to accommodate the demands of a nearby homeowners association that has since shifted to a position of neutrality.
No more accommodations are likely. Smith said Axon’s board has set a deadline of the end of the current legislative session to either resolve the issue in Arizona or find a new location.
