By Roland Murphy for AZBEX
News emerged this week that, despite having been handed a victory from the Arizona State Legislature that would have allowed it to build its nearly $1.5B planned headquarters campus as originally envisioned and approved last year, Axon Enterprise had been in negotiations with leadership from the City of Scottsdale to dramatically reduce the number of planned residential units and overall density to make the project more palatable to local leaders and project opponents.
Those negotiations came to a crashing halt between the end of last week and the beginning of this one after texts from Councilmember Adam Kwasman to Terrance Thornton, Mayor Lisa Borowsky’s chief of staff, were made public on social media.
AZBEX has covered the Axon proposal and the resulting fights over the development in Scottsdale and the State Legislature in greater detail than any other news outlet. While we will not take up the time and space to rehash the events of the last eight months, readers can catch up at this link.
Suffice it to say, Axon had cleared a variety of hurdles and had all the pieces lined up to allow it to build a corporate campus with 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.
Even though all the proverbial ducks were in a row following Axon’s wins, company leaders were meeting with Scottsdale officials on a reduced proposal. According to the Arizona Republic, “…the company was willing to cap the number of apartment units at 850, with the possibility of building up to 850 condo units. That would reduce the total number of housing units to 1,700,” along with other concessions.
Citing Axon President Josh Isner, Phoenix Business Journal reported, “Axon’s most consequential offer during the negotiations involved cutting the proposed multifamily units at its headquarters campus to less than 900… Axon also proposed funding a ‘real-time crime center’ for Scottsdale Police Department on their campus, relocating roads away from the nearby neighborhoods and creating a partnership to construct a performing arts center.”
After June 5 meetings between Axon officials, Borowsky, Kwasman and Councilmembers Solange Whitehead and Maryann McAllen last week, Kwasman texted: “Axon reduced apts by 50%. Reduced overall density by 25%. Willing to do a concert hall, police HQ, everything. Lisa bailed on the meeting. Won’t schedule a follow up tomorrow which she promised. She’s (expletive) this whole thing up. I had to talk Isner off a ledge just now.”
In a separate text, he said, “I just talked to Solange. Let me be very clear if she doesn’t make a deal. Solange is joining the Supermajority. She’s going to be a 6-1 vote for four years. I’m going to take away her (expletive) physical office and give it to Jan.” The “Jan” referenced is Councilmember Jan Dubauskas.
After additional discussions with Borowsky, Axon spokesperson David Leibowitz posted a statement from Isner on X that said, “Unfortunately, Axon is withdrawing from negotiations with the City of Scottsdale. The internal politics of the City Council currently make it impossible to reach an agreement. I have never seen such a toxic environment in my life. We put a great deal on the table and we tried our best.”
Isner told the Arizona Republic the company had come to Scottsdale with the offer in hopes of “nothing more than having a productive relationship.”
With discussions having fallen apart, Axon now says it will proceed with building the campus as was originally planned and approved. In an interview with Phoenix Business Journal, Isner said, “This group of people is not serious about doing business. They’re serious about grabbing power… And it’s ugly. The people who are ultimately going to lose as a result of this are the people of Scottsdale.”
Newly Seated Council Marked by Infighting
Borowsky, Kwasman, Dubauskas and McAllen were swept into office last November on a wave of anti-development sentiment, fueled in large part by a contingent of voters who believed the previous iteration of the Mayor and Council, had been too ready to approve new development, particularly in multifamily.
This sentiment arose even though the Council under former Mayor David Ortega was one of the most restrictive in the state in terms of new project approvals.
Of the former council, only Whitehead, Graham and Kathy Littlefield remained, as their seats were not up for election. Littlefield is the wife of former Councilmember and current Axon opposition leader Bob Littlefield. Graham has consistently voted against new development. Whitehead is widely seen as comparatively moderate, having voted both for and against apartment development in past cases. McAllen is seen as moderate-to-liberal.
In the previous Council’s vote to approve Axon’s proposal and development agreements last November, Whitehead voted in favor; Littlefield and Graham voted against.
After being sworn in earlier this year, Borowsky and the Council almost immediately fell prey to infighting, with Borowsky on one side and a coalition of Kwasman, Graham, Littlefield and Dubauskas on the other. Much of the fighting centered around a planned parking garage in Old Town, which Borowsky has been working to relocate.
An anonymous criminal complaint was filed about Borowsky, alleging secret meetings about the garage plan. The Maricopa County Attorney’s Office chose not to pursue an investigation. Recordings related to the complaint and preliminary inquiries, however, show the depths of the divisions within Scottsdale’s leadership, including harsh personal statements made to investigators about Borowsky. Borowsky has said she is considering a defamation lawsuit once all the materials have been reviewed. She has also accused her opponents of “an attempted palace coup.”
“Parkingate,” as the controversy has come to be referred to locally, has involved multiple accusations of shady dealings by Borowsky and her staff, with equally vitriolic rebuttals by Councilmembers.
A May 13 retreat with Borowsky and the Council intended to foster cooperation and teamwork quickly devolved into acrimony.
Also in May, Kwasman led an effort to strip two staff positions from the Mayor, ostensibly in an attempt to provide more support resources for Council. Borowsky reclaimed the two positions weeks later in a budget vote.
While the conservative-leaning end goals of the majority of Scottsdale’s leadership are largely united, the practical ability to achieve them appear to fall apart in the day-to-day minutia, leading up to the current set of events with Axon in which infighting has led to snatching defeat from the jaws of victory for the development’s opponents.
