By Roland Murphy for AZBEX
It’s do-or-die time for Axon Enterprise’s ongoing fight to build an international headquarters campus in north Scottsdale. City Council met Monday night to consider whether to enter into a potential armistice agreement or to authorize filing claims in a lawsuit to stop the plan.
A special session was announced late last week to consider a memorandum of understanding that would put an end to the conflict between Axon and the City.
The meeting took place after this issue went to press. The agenda and the contents of the MOU have been available for several days, however.
Axon’s proposal included plans to build a 400KSF headquarters and a mixed-use campus with retail, a 435-room hotel and nearly 1,900 multifamily units on 57 acres at the NEC of Hayden Road and Mayo Blvd. AZBEX has covered the Axon fight extensively. Those articles are available here.
The first item on the agenda was a request for an executive session to consult with the City’s attorneys for legal advice and to consider the City’s position on a lawsuit filed by former Councilmember Bob Littlefield’s Taxpayers Against Awful Apartment Zoning Exemptions to stop the development. TAAAZE had previously filed a petition to put the last Council’s approval of the project plan and development agreement on the ballot.
That effort was waylaid when the Arizona Legislature passed a law to protect projects like Axon’s from local interference. The City has taken a slow approach regarding its position, most recently announcing a notice of claim against the State in what was generally seen as a middle-of-the-road measure that left the door open to both negotiations with Axon and/or filing a lawsuit to stop the project.
The executive session was also to discuss the prior approval and development agreement and a proposed MOU that would allow the development to go forward.
The meetings could be the last major factor in establishing how, or if, Axon and Scottsdale move forward together. The last item on the agenda includes a discussion and potential vote to authorize the Interim City Attorney “to file any appropriate counter claim(s), cross claim(s), and third-party claim(s)” regarding TAAAZE’s lawsuit.
What’s in the MOU?
The MOU appears to be the result of ongoing negotiations between City representatives and Axon and contains several modifications to the originally proposed project. Specifically:
- Reducing the residential unit total from 1,882 apartments to 750 apartments and 750 condominiums;
- Creating affordable housing concessions;
- Establishing a third-party permitting and inspection process;
- Development of a phased construction plan for the office, manufacturing, residential and hotel components;
- Detailing infrastructure commitments, and
- Development of a Real-Time Crime Center.
Along with reducing the total count of residential units, Axon would also agree to designate 38 units as affordable and to delay the start of construction for 375 apartments and 375 condos until after January 1, 2030. The infrastructure required for the residential component could be built at any time after the building permits for the headquarters are issued.
Third-Party Approvals
The MOU allows for empowering a third party to issue building permits, conduct building inspections and issue certificates of occupancy for any part of the campus development. While allowed under Arizona law, the process is unusual. Most such administrative reviews are conducted by local staff.
The proposed process will let Axon and Scottsdale agree on “registered architects and professional engineers” to certify compliance with ordinances and construction standards for the campus development.
“Axon shall be entitled to use any ordinance enacted to provide for third party building permits, to conduct building inspections and issue certificates of occupancy for the duration of the campus construction, even if the Code is later modified, unless State law precludes such use,” the document says
The self-certification or third party reviewer will be able to interpret the building code and make variances as necessary. If Axon and the City cannot agree on how to apply the City code, the disagreement will go to binding arbitration.
Given the highly politicized history of the campus development, it is assumed the self-certification and third-party review is intended to avoid delays and potential interference in the building permit and certificate of occupancy processes. It would also work around a problem many developments have faced around the state, in which municipal staffing shortages result in delayed issuance of permits and drawn-out timelines for construction.
Other MOU Items
Hotel uses are specifically allowed under the State legislation that enabled the development. According to Arizona Revised Statutes 9-461.19 (C)(2), “For campuses that include hotel use as an ancillary use pursuant to this section, a municipality shall allow a number of hotel rooms within the international headquarters campus equal to ten hotel rooms per gross acre based on the total gross acreage of the international headquarters campus. At least ten percent of the hotel rooms within the international headquarters campus shall be allowed as for-sale residential units within the hotel.”
Axon also agrees to build at least 47KSF of retail, restaurant and similar uses. The hotel and retail components were the portion that originally ignited the opposition to the hotel, as California labor union Unite Here Local 11 and its affiliated group Worker Power attempted to pressure Axon to establish the union as the designated representative for those eventual businesses’ employees. When Axon refused, calling the effort “extortion” because the offer included a pledge not to oppose the development if the company agreed to the terms, the labor groups launched an opposition campaign, which eventually contributed money and in-kind donations to TAAAZE’s petition drive and other efforts. (AZBEX: Dec. 17, 2024; Jan. 22)
Under the MOU, Axon will also retain its obligations for road development and improvements, pedestrian and bike trails, and construction of a dog park on the property.
The company will also, “…develop water pump-stations and sewer lift stations that are required by the development. To the extent necessary, Axon will upsize any sewer lift stations or water pump stations to accommodate the demands added by the project and in compliance with any applicable governing codes and laws at the time of construction of such infrastructure. Axon may elect to build the stations to the same standard that the City uses for its own stations, and if so such on-site facilities shall be dedicated and transferred to City ownership.”
Axon and the City had engaged in negotiations about the development earlier this year. Conflicts between the Mayor, members of Council and City staff were made public during that process, and the negotiations were scrapped. (AZBEX; June 13)
One aspect of those negotiations—a “Real-Time Crime Center”—is included in the MOU. The RTCC would be able to serve “as a centralized hub with the goal of integrating live video, mapping, alerts, and analytics to improve situational awareness and support faster, better-informed decision-making during emergencies, major events, and public safety operations.”
Axon would provide the City with the same type of RTCC access it delivers to other governmental clients as part of its service offerings, but the City would incur no charges. This will require a ratification of a separate future agreement.
Administration of the Process
The MOU names Councilmember Adam Kwasman to serve as the liaison between Axon and the City for the MOU and campus development.
This may be an interesting political concession. Scottsdale voters elected a new mayor and several new members of Council in the 2024 election, reflecting an even stronger opposition to development than the previous body, which was already one of the most staunchly anti-multifamily councils in the state.
Solange Whitehead was the only prior member who voted for the original project approval and development agreement to win reelection. Kathy Littlefield, wife of Bob Littlefield, was also reelected but had voted against Axon.
Since the current Mayor and Council were sworn in in January, Kwasman has voted so consistently with Littlefield, Barry Graham and Jan Dubauskas that Whitehead has referred to them as “a bloc,” a nickname that has entered common use when discussing Scottsdale’s currently complicated political landscape.
It is possible Kwasman was chosen as liaison to create support for the proposed compromise among bloc members and to quiet, to the extent possible, the almost certain outcry from residents opposed to the project.
AZBEX reached out to Axon’s spokesperson and to the public relations firm representing TAAAZE for this column. No response was received by press time.
