Red Mountain v. Cobblestone ( 2021 )


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  •                       NOTICE: NOT FOR OFFICIAL PUBLICATION.
    UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
    AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
    IN THE
    ARIZONA COURT OF APPEALS
    DIVISION ONE
    RED MOUNTAIN ASSET FUND IIA, LLC, Plaintiff/Appellant,
    v.
    STEVE BEUERLEIN, et al., Defendants/Appellees,
    and
    COBBLESTONE PROPCO, LLC, Real Party in Interest/Appellee.
    No. 1 CA-CV 21-0113
    FILED 12-23-2021
    Appeal from the Superior Court in Maricopa County
    No. CV 2020-010818
    The Honorable John R. Hannah Jr., Judge
    AFFIRMED
    COUNSEL
    Timothy A. La Sota PLC, Phoenix
    By Timothy A. La Sota
    Counsel for Plaintiff/Appellant
    Beus Gilbert McGroder PLLC, Phoenix
    By Cassandra H. Ayres, Cory L. Broadbent
    Counsel for Real Party in Interest/Appellee Cobblestone
    RED MOUNTAIN v. COBBLESTONE
    Decision of the Court
    MEMORANDUM DECISION
    Presiding Judge Jennifer B. Campbell delivered the decision of the Court,
    in which Judge Samuel A. Thumma and Judge Maurice Portley1 joined.
    C A M P B E L L, Judge:
    ¶1           Petitioner Red Mountain Asset Fund IIA, LLC (Red
    Mountain) appeals from the trial court’s order dismissing its Application
    for Order to Show Cause and Complaint for Special Action. Both
    documents challenged the City of Phoenix Board of Adjustment’s decision
    to affirm grant of a use permit and variance to Cobblestone Propco, LLC
    (Cobblestone). For the following reasons, we affirm.
    BACKGROUND
    ¶2             Cobblestone owns property in Phoenix zoned as C-2 on which
    it intends to build an open carwash. A car wash is a permitted use for C-2
    zoned property and “may be in an open building subject to a use permit.”
    Phoenix Zoning Ordinance § 623(D)(41). The zoning ordinance also
    outlines yard, height, and area requirements for non-residential uses,
    including a landscaped setback of 25 feet, with a minimum landscaped
    setback of 20 feet for up to 50% of the frontage of the property. Phoenix
    Zoning Ordinance § 623(E)(4)(e).
    ¶3            In November 2018, Phoenix granted Cobblestone conditional
    approval for a use permit for the open carwash and three variances to
    reduce required landscape setbacks. The approval for both the use permit
    and variances was dependent on Cobblestone meeting certain time
    stipulations, which Cobblestone did not meet. In February 2020,
    Cobblestone reapplied for a use permit and one variance to reduce the
    required landscape setback from 25 feet to 8 feet. Cobblestone proposed it
    would install an additional 15 feet of landscaping “within the city right of
    way between the curb and the property line.” In substance, Cobblestone
    1      The Honorable Maurice Portley, Retired Judge of the Court of
    Appeals, Division One, has been authorized to sit in this matter pursuant
    to Article 6, Section 3, of the Arizona Constitution.
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    RED MOUNTAIN v. COBBLESTONE
    Decision of the Court
    proposed providing 23 feet of landscaping, 8 feet on its own property and
    15 feet on the city right of way.
    ¶4            A Zoning Adjustment hearing was held in March 2020.2 The
    zoning administrator heard statements from representatives for
    Cobblestone and Red Mountain, and found that strict application of the
    ordinance meant Cobblestone would lose 25% of its property building
    envelope area, given the specific nature of Cobblestone’s property. The
    zoning administrator considered Cobblestone’s proposed site plans and
    approved the use permit and variance with two stipulations: Cobblestone
    must (1) apply and pay for building permits within eighteen months and
    (2) follow the site plan pertaining to the landscape setback.
    ¶5            Red Mountain appealed the zoning administrator’s decision,
    and a Board of Adjustment hearing was held in August 2020. After hearing
    statements from Cobblestone, Red Mountain, and community members,
    the Board unanimously voted to affirm the zoning administrator’s decision
    granting the use permit and variance with the two stipulations.
    ¶6           In September 2020, Red Mountain filed a Complaint in the
    superior court for statutory Special Action to challenge the Board of
    Adjustment’s decision and also an Application for Order to Show Cause
    and for Injunctive Relief. Oral argument was held in January 2021 and the
    court found that the Board’s decision was not arbitrary, capricious, or
    beyond its jurisdiction. The court denied Red Mountain’s Application for
    Order to Show Cause and for Injunctive Relief and dismissed the Special
    Action. Red Mountain timely appeals.
    DISCUSSION
    ¶7             The only issue on appeal is whether the superior court was
    correct in sustaining the Board’s decision. See Ivancovich v. City of Tucson, 
    22 Ariz.App. 530
    , 535 (1974). “In a special action to review a municipal board
    of adjustment decision, the [superior] court’s primary purpose is to
    determine whether the board’s decision was arbitrary and capricious or an
    abuse of discretion.” Murphy v. Town of Chino Valley, 
    163 Ariz. 571
    , 574
    (App. 1989). This court is “bound by the same standard of review as the
    superior court.” 
    Id. at 574
    . We presume the validity of the Board’s decision
    unless it is “contrary to law, is not supported by substantial evidence, is
    2     Due to a clerical error, the transcript for the Zoning Adjustment
    hearing is dated June 4, 2020. In fact, however, that hearing was held on
    March 26, 2020.
    3
    RED MOUNTAIN v. COBBLESTONE
    Decision of the Court
    arbitrary and capricious or is an abuse of discretion.” A.R.S. § 12-910(F);
    Pawn 1st, LLC v. City of Phoenix, 
    242 Ariz. 547
    , 551, ¶ 9 (2017). However, we
    decide all questions of law and fact “without deference to any previous
    determination that may have been made on the question by the agency.”
    A.R.S. § 12-910(F).
    I.     Use vs. Area Variances
    ¶8            Arizona law recognizes two types of variances: a use variance
    and an area variance. Ivancovich, 22 Ariz.App. at 536. A use variance grants
    the owner permission to use the property for something other than what is
    permitted in a zoning ordinance. Id. An area variance, at issue here, relieves
    a property owner from the “duty to comply with a zoning ordinance’s
    technical requirements,” which includes setback requirements. Pawn 1st,
    LLC, 242 Ariz. at 552, ¶ 14. An area variance is proper if the applicant shows
    “that strictly applying a zoning ordinance will cause ‘peculiar and
    exceptional practical difficulties’ that deprive a property of privileges
    enjoyed by similarly zoned properties.” Id. at 550, ¶ 1.
    ¶9             Red Mountain argues that because the setback ordinance
    applies to all property owners, the setback requirement is not peculiar to
    Cobblestone’s property, nor does it deprive Cobblestone’s property of
    privileges enjoyed by similarly zoned properties. This argument ignores the
    standard outlined in Pawn 1st. In that case, the court adopted the
    requirement that an applicant “show that strictly applying a zoning
    ordinance [like the setback requirements here] will cause ‘peculiar and
    exceptional practical difficulties’ that deprive a property of privileges
    enjoyed by other similarly zoned properties.” 242 Ariz. at 550, ¶ 1
    (emphasis added). It is not the existence of the setback requirements that
    establish peculiar or exceptional circumstances, it is the effect of the setback
    requirement on a particular piece of property.
    ¶10          In this case, if the setback requirement was strictly applied to
    Cobblestone’s property, it would create peculiar and exceptional
    circumstance because it would eliminate 25% of the property building
    envelope area. The setback requirement would deprive Cobblestone the
    privileges enjoyed by owners of similarly zoned properties because it
    would be unable to build a viable carwash on the property, a use within the
    permitted uses of property zoned C-2. For the reasons outlined below, we
    conclude the Board did not abuse its discretion in affirming Cobblestone’s
    variance.
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    RED MOUNTAIN v. COBBLESTONE
    Decision of the Court
    II.    Area Variance from Setback Requirements
    ¶11            Red Mountain attempts to cast the Board’s decision as an
    abandonment of the setback requirements. Nothing in the Board’s decision
    changes the process for the granting of an area variance. Phoenix Zoning
    Ordinance § 307 controls the authorization of a variance and provides that
    the zoning administrator “shall [a]uthorize upon application and hearing
    such variance from the terms of this ordinance as will not be contrary to the
    public interest.” Phoenix Zoning Ordinance § 307(A)(9). The property
    owner must show that “a literal enforcement of any provisions of the
    ordinance would result in unnecessary property hardship.” Id. The zoning
    administrator must also find sufficient evidence to establish four criteria:
    (1) special circumstances3 exist “that do not apply to other properties;” (2)
    the special circumstances were not self-imposed; (3) “the variance is
    necessary for the preservation and enjoyment of substantial property
    rights;” and (4) the variance “will not be materially detrimental to persons
    residing or working in the vicinity, to the adjacent property, to the
    neighborhood, or to the public welfare in general.” Id.
    ¶12           Red Mountain contends that the Board did not discuss the
    merits of Cobblestone’s variance application. The record belies this
    contention. At the Zoning Adjustment hearing, Cobblestone presented
    evidence that previously it had been granted three variances and evidence
    of its new site plan removing the need for two of the three previously
    granted variances. As it related to the first and second criteria, Cobblestone
    presented evidence about the shape and size of the lot, and explained that
    the site was landlocked and without cross access to the rest of the center.
    In support of the fourth criteria, Cobblestone presented evidence that
    developing the vacant lot would positively impact the surrounding
    community because the property is currently undeveloped.
    ¶13            The zoning administrator made specific findings for each of
    the criteria required by § 307. First, the zoning administrator found a special
    circumstance existed “due to the site’s unusually narrow plus deep shape,
    as well as the size.” Second, the zoning administrator found that the special
    circumstance was not self-imposed because C-2 zoning allows for a
    carwash and “to require a different business would be a denial of property
    3      Although the zoning administrator referred to special circumstances
    and hardship interchangeably in its decision, “[t]he term ‘special
    circumstances’ as used in the zoning ordinance is the functional equivalent
    of the word ‘hardship.’” Burns v. SPA Automotive, Ltd., 
    156 Ariz. 503
    , 505
    (App. 1988).
    5
    RED MOUNTAIN v. COBBLESTONE
    Decision of the Court
    rights.” The zoning administrator concluded that, without a variance,
    Cobblestone could not develop the property as intended. Finally, the
    zoning administrator found that granting the variance would not cause a
    detriment to the community because Cobblestone’s intended use was “less
    intense” than other drive-through businesses.
    ¶14           The Board’s decision to uphold Cobblestone’s variance was
    supported by substantial evidence developed before the zoning
    administrator and presented to the Board. At the Board hearing, the Board
    members noted that Cobblestone’s proposed use of the city right of way to
    provide up to 23 feet of landscape setback, although two feet short of the 25
    foot setback requirement, was acceptable and provided a basis for affirming
    Cobblestone’s use permit and variance. The Board then voted unanimously
    to uphold the variance granted by the zoning administrator. Cobblestone’s
    statements and evidence at the Zoning Adjustment hearing and Board
    hearing were sufficient to satisfy the four criteria in § 307.
    1.     Special Circumstances
    ¶15            Red Mountain argues that Cobblestone created the special
    circumstances by purchasing a lot that is too small for its intended purpose.
    A special circumstance is not self-imposed when “the owner wants to use
    the property in a way permitted to other similarly situated properties, but
    cannot do so because of externally imposed circumstances.” Pawn 1st, LLC,
    242 Ariz. at 555, ¶ 31. When the Board analyzes a claimed special
    circumstance, it looks at the applicability of the circumstance to the
    property itself, rather than the property owner. Id. And our supreme court
    has expressly rejected a rule that would prohibit property owners from
    obtaining a variance simply because they knew the property was subject to
    area restrictions prior to purchase. Id. at 555, ¶ 32.
    ¶16            Cobblestone is entitled to develop the property for any use
    permitted within the C-2 designation. This includes developing an open
    carwash, but the size and shape of the property would likely prevent
    Cobblestone from being able to do so if the landscaping setback
    requirements are strictly applied. The shape and size of the property is
    clearly a special circumstance that applies to the property itself, because
    regardless of who owns and seeks to develop the property, the owner loses
    25% of the usable property area to landscaping setback requirements. Even
    if Cobblestone knew a variance would be necessary to develop the property
    at the time it purchased it, Cobblestone was entitled to apply for a variance
    as outlined in § 307. See Pawn 1st, LLC, 242 Ariz. at 555, ¶ 32 (holding that
    an “owner’s selection of a property, even with the knowledge that an area
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    RED MOUNTAIN v. COBBLESTONE
    Decision of the Court
    variance is required for an intended use allowed on other similarly zoned
    properties, does not itself constitute a self-imposed special circumstance”).
    2.     Substantial Property Rights
    ¶17            Red Mountain next argues that a variance is unnecessary for
    Cobblestone to enjoy substantial property rights because the property
    could still be used for other uses permitted by C-2 zoning. Cobblestone is
    entitled to use its property for any of the uses permitted for property zoned
    C-2, including a car wash. See Phoenix Zoning Ordinance § 623(D)(41). The
    fact that the property could accommodate a restaurant, or some other use
    authorized for C-2 property, without the requested variances, is irrelevant.
    As the zoning administrator found, Cobblestone’s business “is limited to
    certain machinery and operation restraints” and thus Cobblestone could
    not redesign its plans for another type of business. The zoning
    administrator properly rejected this argument because requiring
    Cobblestone to design a different business plan would be a denial of
    property rights.4
    III.   Authority to Grant a Variance
    ¶18            Red Mountain also challenges the authority of the zoning
    administrator and Board to grant a variance from the setback requirements.
    Red Mountain argues that by granting Cobblestone’s application for a
    variance, the Board effectively changed the terms of the ordinance and only
    the City Council can make such a change. Taken to its logical conclusion,
    this argument would render the variance ordinance meaningless, because
    the Board would never be able to grant a variance. See A.R.S. § 9-
    462.06(H)(1); Phoenix Zoning Ordinance § 303(B)(2)(a). That conclusion
    would be contrary to the directive that, in construing text like the ordinance,
    we “give meaning to all the language used in a statute and avoid an
    interpretation that renders a term either duplicative or meaningless.”
    Associated Aviation Underwriters v. Wood, 
    209 Ariz. 137
    , 178, ¶ 141 (App.
    2004) (citation and quotation omitted).
    ¶19           The Board has the authority to “[h]ear and decide appeals for
    variances from the terms of the zoning ordinance.” A.R.S. § 9-462.06(G)(1);
    see also Phoenix Zoning Ordinance § 303(B)(1)(b). And the Board does not
    4      Red Mountain argues that because Cobblestone did not meet its
    burden for a variance, its use permit should also be reversed. Because the
    record supports the Board’s decision to uphold Cobblestone’s variance, Red
    Mountain’s argument to reverse the use permit fails.
    7
    RED MOUNTAIN v. COBBLESTONE
    Decision of the Court
    change the terms of the ordinance by acting pursuant to this authority to
    grant a variance. A variance is specifically limited to the property at issue
    and has no effect on the ordinance as a whole. We decline to adopt Red
    Mountain’s interpretation of the Board’s authority, nor do we find anything
    in the record to suggest that the zoning administrator or the Board abused
    its discretion here. The Board had sufficient evidence before it to uphold the
    zoning administrator’s decision to grant Cobblestone’s application for a
    variance and use permit.
    CONCLUSION
    ¶20          For the foregoing reasons, we affirm the superior court’s
    order. Neither party has requested attorney’s fees, but as the prevailing
    party on appeal, Cobblestone is entitled to recover its taxable costs upon
    compliance with ARCAP Rule 21.
    AMY M. WOOD • Clerk of the Court
    FILED: AA
    8
    

Document Info

Docket Number: 1 CA-CV 21-0113

Filed Date: 12/23/2021

Precedential Status: Non-Precedential

Modified Date: 12/23/2021