By Roland Murphy for AZBEX
Gov. Katie Hobbs has signed Senate Bill 1543—the so called “Axon Bill”—into law to make way for Axon Enterprise, Inc.’s planned corporate headquarters and campus development. That may well prove to be the easiest round in the company’s fight to achieve its vision.
We have covered the plans for the headquarters, apartments and hospitality outlets since they were first proposed, as well as the “community group” and union backed efforts to stop them. Readers who want the full background on the story can find it here.
SB1543 effectively nullifies the referendum looming over the project since the anti-apartment group Taxpayers Against Awful Apartment Zoning Exemptions, its allies and funding supporters in California union Unite Here! and affiliated public policy group Worker Power, along with local political agitator Tyler Montague’s Public Integrity Alliance, gathered enough signatures to put the Scottsdale City Council’s approval on the ballot.
With previous legislative attempts to work around the referendum killed by leadership in both chambers of the Arizona Legislature, getting SB1543 on the books was no small victory for Axon. It will, however, have to be the first of many.
Supporters of the action say it was a long overdue check on opposition groups’ ability to game the system at the local level to the detriment of the entire region. While some disapprove of the extent to which Axon fought for a project that does not directly impact its core operations, many say it was vital to the area’s ongoing growth and prosperity that a corporate giant of Axon’s scale take up the fight if smaller developers had any hope of stemming the tide.
While the NIMBY community was, and sometimes still is, grassroots groups fighting against change in their individual neighborhoods, many of those groups have evolved into slick “astroturf” organizations with legal teams, public relations agents and deep war chests.
Abusing the referendum process is among those groups’ favorite tactics, and the Axon situation is a banner case in point.
In a recent piece contributed to AZ Big Media, land use attorney Adam Baugh of Withey Morris Baugh wrote, “In Arizona, referendum laws are designed to empower citizens by allowing them to challenge legislative decisions through a public vote. However, in recent years, these laws have been increasingly misused as a tool to block zoning changes and halt new developments. This trend has raised concerns among city planners, developers, and zoning attorneys that referendum laws are being weaponized to obstruct economic development rather than serve as a check on government power.”
Legal and Procedural Challenges Loom
A lawsuit, potentially multiple lawsuits, is/are among the first hurdles Axon will likely have to clear.
TAAAZE founder Bob Littlefield has repeatedly warned that the law would be challenged in court if Hobbs signed it. Legal experts we spoke with say a court challenge may have a chance. The two major issues facing the new law are its overriding of local autonomy and residents’ referendum rights, along with the law’s retroactive aspect, since it applies to a referendum that was certified before the law was enacted.
It could also, according to Capitol Media Services, “…run afoul of a state constitutional ban on ‘special legislation’ that is crafted to affect just one business, leading to a possible legal challenge that could hold up the whole project.”
Littlefield has said all options are on the table as possible actions to stop the development from moving forward.
Having allied with Worker Power gives TAAAZE a seasoned partner when it comes to harrying developers with litigation. Worker Power was formed from an earlier group called Central Arizonans for a Sustainable Economy. That group sued the developers of the South Pier project in Tempe under the pretense of expanding affordable housing after the developers rejected unionization. The lawsuit was dropped after the developers acquiesced.
Since then, Worker Power has deployed multiple attempts to stop the VAI Resorts development in Glendale. The most recent puts part of the project to a referendum vote scheduled for May 20. (AZBEX, Jan. 28)
In one of the points of his essay, Baugh wrote, “…they abuse the legal purpose of the referendum (to empower citizens) to force their special interest wishes (unionize workers). Arizona courts have seen numerous cases where referendum petitions challenge zoning changes. The legal tool emboldens opposition groups to use referendums as a delay tactic, knowing that the litigation process itself can be enough to derail projects, and force development to succumb to their demands.”
Any litigation against Axon and SB1543 will almost certainly include a request for an injunction to prevent construction from starting until the issues are resolved. Given the complexity of the matter, and the potential for multiple parties filing multiple lawsuits to maximize the fronts on which Axon has to fight, those injunctions could delay the projects far beyond the November 2026 date of the original referendum’s planned election.
Along with the opposition group and union arm, the City of Scottsdale is likely to file its own lawsuit. According to an article in Scottsdale Progress, “Scottsdale City Council met privately with attorneys ‘to consider legal advice related to recently introduced state legislation that will impact the City’s multifamily residential, hotel, and industrial land uses, and the City’s potential response to this new special legislation and related zoning and legal matters.’”
The article goes on to point out a lawsuit would put Scottsdale in the unusual position of litigating to stop a development it had previously approved, albeit under the previous incarnation of the City Council.
Speaking of Referenda…
Another option open to opponents is to put the legislation on a statewide ballot. Since the law was not passed with a two-thirds majority in the Senate, it cannot qualify as emergency legislation under state law and does not go into effect until 90 days after Hobbs signed it.
Since it does not have emergency status, if opponents gather at least 128,000 signatures, it can again be blocked until the November 2026 general election. Given the rapidity with which TAAAZE collected nearly 27,000 signatures in Scottsdale, its alliance base, and the number of other opposition groups around the Phoenix area and the state it could collude with, collecting 128,000 in 90 days may not be a particularly difficult threshold to cross.
And Then There’s Scottsdale
Perhaps the greatest threat to the Axon developments is far less showy and much more mundane. While the previous incarnation of the City Council approved the rezoning and development agreement, and while the necessary approvals are in place for the headquarters, itself, every other component—the nearly 1,900 multifamily units, the hotel, the retail and restaurants and anything else planned for the site—will still have to go through the City’s review and approval processes.
The last iteration of the Scottsdale Mayor and Council under former Mayor David Ortega would regularly reject plans for developments it did not like, even if those plans were signed off on by the City’s development review bodies.
Former Councilmember Tammy Caputi, one of the most consistently pro-development voices on the last Council, said in multiple appearances and presentations a project could “tick every box” and be in 100% compliance with City guidelines and policies and still be rejected for arbitrary reasons or no reason at all.
Scottsdale’s current General Plan makes no provision for developments with densities greater than 25 units/acre. Those developments are classed as “highest density,” a term found only in the document’s glossary. Ortega regularly referred to a density cap of 25 units/acre as “a mandate,” even though the municipal planning document is merely a guideline under the law.
It is not venturing too far into the realm of speculation to bet the current Council, which was elected last year in protest of the former Council’s occasional approval of controversial projects, will be even less accommodating when the time comes to review and approve the component plans.
Not only is the Council much more reticent to approve any type of large-scale development, particularly multifamily, Axon’s efforts to secure passage of SB1543 stripped leadership of the safe space it carved out for itself by refusing to call an election before November 2026.
The City, as an institution, could be expected to harbor bad blood with Axon, and Axon will probably have to engage in an entirely new set of battles over every aspect of the master plan.
We reached out to Axon CEO Rick Smith and spokesperson David Leibowitz for a copy of Smith’s statement thanking Hobbs and the legislators who passed the bill. In that email, we also posed the following questions:
- Does Axon have a statement on how it intends to secure the necessary approvals from City of Scottsdale for design review, permitting, etc.?
- Will the company serve as the master developer in partnership with residential and hospitality developers or will it sell those components off to specialty developers?
We received an email with Smith’s original statement about half an hour later. We still haven’t seen a response to the other two questions.
It would be reaching too far over the speculative line to hazard a guess as to what Axon’s next steps will be. That will likely be determined by which forms the opposition responses take.
Axon’s win has, for the moment at least, staunched the likelihood that one of Arizona’s largest publicly traded companies will leave the state. Having played that card, however, we have to wonder which way the deck is now stacked and how many hands are still to be dealt before the total pot is tallied.
