By Roland Murphy for AZBEX
Arizona legislators are once again looking to change how cities and counties around the state deal with zoning issues and to undercut the degree to which opposition groups can interfere with the zoning process.
Legislators have made various attempts in the past to reduce or eliminate municipal control of zoning, particularly as it applies to multifamily residential developments, but their efforts have either been withdrawn, failed to pass or met with gubernatorial vetoes.
The latest measure under consideration, Senate Bill 1352, was proposed by Sen. David Gowan. Under the bill, zoning would be reclassified under state law as an administrative, rather than legislative process. A key impact of that reclassification is administrative actions are not subject to referendum votes, whereas legislative actions are.
Of particular interest is the fact that SB 1352 makes the reclassification retroactive to July 1, 2024. This would scrap the upcoming referendum in Scottsdale seeking to overturn last November’s approval of Axon’s planned corporate campus and headquarters development.
We have covered the ins and outs of Axon’s battle with opposition group Taxpayers Against Awful Apartment Zoning Exemptions and TAAAZE’s allies as it seeks to develop a new headquarters and nearly 1,900 multifamily units, five retail buildings of five stories, another three-story retail building, a 435-room hotel, and seven restaurants. We will not bother to rehash the details. (AZBEX: Dec. 16, 2024; Dec. 17, 2024; Jan. 22; Feb. 6)
We will, however, repeat the fact that referenda have been used by opponents with increasing frequency to try to stop projects once they win rezoning and development agreement approval from the necessary councils and boards.
Targeted projects have included:
- Axon in Scottsdale;
- The Arizona Coyotes’ Tempe Entertainment District;
- VAI Resort in Glendale;
- Dominium’s Truman Ranch (formerly Waddell Crossing) in Surprise, and
- South Pier at Tempe Town Lake.
Scottsdale City Council has yet to set a date for the Axon referendum. Unless a special election is called, which Mayor Lisa Borowsky has said she opposes due to costs, the earliest regular date will be in November 2026. Axon CEO Rick Smith and other company representatives have said Axon will relocate, probably to another state, if they have to wait two years to find out the fate of their plans.
VAI’s rezoning for a parking and office space component in its master plan will go before voters in a special election this May.
Development supporters have consistently referred to this trend as a misuse and weaponization of the referendum process by opposition groups, unions seeking to secure agreements to represent workers on the sites, and other political action committees and groups opposed to the developments.
Perceptions on SB 1352
When we learned of the proposed legislation early on Feb. 7, we immediately sent requests for comment to several corporate and economic development officials and to various government officials and legal professionals. None of them returned responses before our Monday production deadline.
We were, however, able to get some procedural background from legal experts on the condition they not be quoted.
Other outlets were more successful in securing feedback.
The Arizona Republic quoted Rick Smith as calling the bill “a critical piece of legislation” and saying it would “safeguard responsible economic development and protect against special interest groups weaponizing the referendum process.”
The same article said Greater Phoenix Economic Council President Chris Camacho expressed support for the bill, citing the importance of maintaining Arizona as Axon’s home and the ongoing economic impacts of Axon’s planned $1.3B development.
The Scottsdale Independent quoted TAAAZE founder and longtime multifamily development opponent Bob Littlefield as saying, “It’s outrageous. First of all it’s a special interest bill just for Axon which is always bad legislation. Secondly, if you look at this, this just doesn’t apply to this one referendum. The way I read it is, if this passed in its current form, it would prevent municipal referendum all in the future. Scottsdale, Glendale, Phoenix, that seems pretty outrageous. I wonder if the people of Arizona, if they knew the Legislature was going to take away their right to hold their local governments accountable, would be happy about that. I don’t think the answer is yes. I think they would hate it.”
Smith provided the Independent with much the same message he gave the Republic. The Independent also quoted him as saying, “To be blunt, a city of more than 240,000 residents should not see a transformative project killed because a special interest campaign paid petition circulators to gather less than 20,000 valid signatures, based on the city clerk’s analyses of the petitions. That’s especially true when records show 93% of the signatures were paid for, and two-thirds of those signatures were collected by out-of-state paid petition circulators.”
Probabilities and Repercussions
SB 1352 passed out of the Senate Regulatory Affairs and Government Efficiency Committee Feb. 5 on a 5-2 vote, but its future is far from certain. Gov. Katie Hobbs’ office has not yet commented on the legislation, nor has she said if she will sign it if it passes.
The Arizona League of Cities and Towns—the lobbying group from municipalities in the state—has been a vocal opponent of past efforts to cut local autonomy in zoning matters. This bill, however, leaves the power in local hands but reclassifies the type of action. As of press time, the League has not commented.
Our legal experts raised several possible concerns. They said the bill could be challenged under claims the Legislature does not have the authority to change classifications for acts that have a standing type and definition under the law. They also said the new law will almost certainly be contested as a violation of the right of voters to pursue referenda under the Arizona Constitution.
Any litigation against SB 1352 would almost certainly extend beyond the November 2026 timeline for the Axon referendum as currently expected, which could make the effort to save the plan moot, all other factors being equal.
Litigation would also likely include a request for injunction to keep the project from moving forward until the matter is resolved. In the worst case, Axon could go ahead and start construction, only to be forced to abandon the development if courts ruled against it.
What could have been done, the experts said, would be to increase the number of signatures required on referendum petitions. This is purely speculation as, to our knowledge, no such proposal is pending.
To Smith’s point in the earlier quote, the Axon project only has a direct impact on a few nearby residents. While there are arguments to be made about nebulous issues like the “character of the city,” and “overall quality of life” impacts, which make up the bulk of opposition hostility, the law as an institution focuses on more tangible concerns.
TAAAZE and its supporters gathered nearly 27,000 signatures for the referendum petition, which is nearly 11% of the total Scottsdale population. The argument could be made that the number is too low to reflect “the will of the people” to bring the matter to a vote.
If the matter is to go before the entire city in a referendum, the number of required signatures could be raised to a higher percentage of either the overall population or of the registered voters in the affected jurisdiction to ensure its relevance and to reduce the risk of process abuse.
One particularly interesting point is that raising the threshold, even revising it retroactively to make Axon’s opponents go to collect more or negating the referendum because there were not enough signatures submitted before the deadline, would be changing a process that is already classed as administrative under the law.