Levine v. phoenix/suns

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

MICHAEL A. LEVINE, a married man, Plaintiff/Appellant,

v.

CITY OF PHOENIX, an Arizona municipal corporation; CITY OF
PHOENIX BOARD OF ADJUSTMENT, an official body of the City of
Phoenix; and SUNS LEGACY PROPERTIES, LLC, a Delaware limited
liability company, Defendants/Appellees.

No. 1 CA-CV 15-0357
FILED 9-29-2016

Appeal from the Superior Court in Maricopa County
No. LC2013-000537-001 DT
The Honorable David O. Cunanan, Judge

AFFIRMED

COUNSEL

Engelman Berger, P.C., Phoenix
By Damien R. Meyer
Counsel for Plaintiff/Appellant

Office of the City Attorney, Phoenix
By Brad Holm, Paul Li
Counsel for Defendants/Appellees City of Phoenix & City of Phoenix Board of
Adjustment

Snell & Wilmer, L.L.P., Phoenix
By Patrick J. Paul, Christopher P. Colyer
Counsel for Defendant/Appellee Suns Legacy Properties, LLC
 LEVINE v. PHOENIX/SUNS
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MEMORANDUM DECISION

Judge Lawrence F. Winthrop delivered the decision of the Court, in which
Presiding Judge Kent E. Cattani and Judge Peter B. Swann joined.

W I N T H R O P, Judge:

¶1 Michael A. Levine appeals the superior court’s judgment
affirming the decision of the City of Phoenix Board of Adjustment (“the
Board”) to grant Suns Legacy Properties, LLC (“SLP”) a five-year use
permit to operate an interim surface parking lot at the southwest corner of
Madison and First Streets (“the Property”) in downtown Phoenix (“the
City”). For the following reasons, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 The Property, which consists of parcels 112-27-069, -067, -066,
and -064, is located west of Talking Stick Resort Arena—home of the
Phoenix Suns—in the City’s Warehouse Character Area. The Property
adjoins an eastern lot consisting of two SLP-owned parcels (parcels 112-27-
062 and -061) that were already being used for thirty spaces of surface
parking at the time of the Board hearing. Given its location, the Property is
subject to the Phoenix Zoning Ordinance (“PZO”) and its Downtown Code,
which is provided for in Chapter 12 of the PZO. See PZO § 1201(B). Levine,
who develops properties in the Warehouse Character Area, owns property
(parcels 112-27-068, -065, and -063) that lies approximately twenty-five feet
from the subject Property.

¶3 SLP sought to utilize the Property as an interim surface
parking lot in support of the neighboring US Airways Center.1 SLP
contacted the City, whose staff advised and confirmed that seeking a use
permit was the appropriate process for obtaining approval of the proposed
interim parking lot.

¶4 On June 17, 2013, SLP submitted Application No. ZA-226-13-
7 to the City for approval of a 72-month use permit to develop an interim

1 Talking Stick Resort Arena was previously known as US Airways
Center.

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surface parking lot with fifty-six new parking spaces.2 The application
identified the affected parcels as 112-27-069, -067, -066, -064, -062, and -061.3

¶5 At the conclusion of a zoning administration hearing held
July 18, 2013, the hearing officer for the City’s Planning & Development
Zoning Administrator approved a five-year use permit.4 The hearing
officer found the requested use would (1) “not cause a significant increase
in vehicular or pedestrian traffic in adjacent residential areas” and would
allow more on-street parking to be available to the public; (2) “not emit
odor, dust, gas, noise, vibration, smoke, heat or glare at a level exceeding
that of the ambient conditions”; and (3) “not contribute in a measurable way
to the downgrading of property values,” and would “be a benefit to the
surrounding properties.” See PZO § 307(A)(7)(a).

2 The proposed new spaces were in addition to the eastern lot’s thirty
already existing spaces (which would be reduced to twenty-seven spaces to
accommodate site improvements, including an improved driveway and
planters).

3 Levine seeks to include parcels 112-27-062 and -061 as part of his
appeal. Those parcels were used as a parking lot before enactment of the
Downtown Code in 2010, however, and SLP was already entitled to
maintain this existing, nonconforming use. See PZO § 1201(C)(3). Although
SLP’s initial use permit application included parcels 112-27-062 and -061,
SLP withdrew those parcels from its application on August 12, 2013—
before the Board’s hearing on Levine’s appeal. In response, the City
amended SLP’s application by eliminating those parcels from use permit
consideration. Thus, the two eastern-adjacent parcels were not subject to
the Board’s decision or the superior court’s review, and SLP’s use permit
pertains solely to parcels 112-27-069, -067, -066, and -064. We reject Levine’s
suggestion that reversible error occurred because the Board did not
consider all six parcels in its review after two of the parcels had been
withdrawn from consideration.

4 At the hearing, Levine’s counsel stated he did not object to “the
application moving forward,” but explained that in the interim before the
deadline to file an appeal, he planned to meet with SLP’s representatives
about “some proposed stipulations.”

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¶6 On August 2, 2013, Levine appealed the Zoning
Administrator’s decision to the Board. At a public hearing on September
12, 2013, the Board unanimously upheld approval of the use permit.

¶7 On October 11, 2013, Levine filed a statutory special action
complaint pursuant to Arizona Revised Statutes (“A.R.S.”) section 9-
462.06(K) (Supp. 2015),5 seeking to overturn the Board’s issuance of the use
permit to SLP. Levine alleged in part that SLP’s application for the
approved use permit deviated from setback and landscaping requirements
set forth in the Downtown Code, SLP had not requested a variance, and the
Board had violated A.R.S. § 9-462.06(H)(1) in approving the application for
the use permit.6

¶8 In a minute entry filed February 20, 2015, the superior court
affirmed the grant of the use permit, holding in part as follows:

When granting a use permit, two conditions must
exist: 1) the use will not cause an adverse impact on adjacent
properties or properties in the area and, 2) the use must be in
compliance with all provisions of the Zoning Ordinance and
the law of the City of Phoenix. During the hearings in this
matter, both the Zoning Administrator and the Board of
Adjustment determined that the use did not create any
adverse impact on the adjacent properties or properties in the
area. Further, the City of Phoenix Downtown Code does
allow for interim parking lot use in that area as outlined in
§ 1204(D). Given this, the City of Phoenix Board of
Adjustment did not act arbitrarily, capriciously or in an abuse
of its discretion.

5 Section 9-462.06 was amended in 2015, see Ariz. Sess. Laws, ch. 125,
§ 1 (1st Reg. Sess.), but the amendment is not material to our analysis.
Throughout this decision, we cite the current version of all statutes unless
changes material to our analysis have occurred since the relevant date(s).

6 Subsection (H)(1) provides as follows: “A board of adjustment may
not . . . [m]ake any changes in the uses permitted in any zoning classification
or zoning district, or make any changes in the terms of the zoning ordinance
provided the restriction in this paragraph shall not affect the authority to
grant variances pursuant to this article.” A.R.S. § 9-462.06(H)(1); accord PZO
§ 303(B)(2)(a).

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Appellant’s argument that the Board of Adjustment’s
approval must necessarily include a finding that the site plan
and build out complies with all zoning requirements goes
beyond the scope of what the Board of Adjustment approves.
The Board only approves a potential use, not a specific site
plan or build out. It is true that the potential use must be
permitted by the Zoning Ordinance, and in this case it was
under § 1204(D), but the responsibility to review and approve a
site plan as well as the build out fall outside the scope of the Board
of Adjustment’s use decision. A proposed site plan and other
design factors may be presented and considered by the Board
of Adjustment, but this is only in the context of their
determination that a use will or will not cause an adverse
impact.

(Emphasis added.)

¶9 On April 16, 2015, the superior court entered judgment
affirming the grant of the use permit to SLP. We have jurisdiction over
Levine’s timely appeal pursuant to A.R.S. § 12-2101(A)(1) (2016).

ANALYSIS

¶10 Raising several interrelated issues, Levine argues the superior
court erred in ruling that the Board’s grant of the use permit to SLP was not
contrary to law, unreasonable, arbitrary, capricious, or an abuse of
discretion.

I. Standard of Review

¶11 We review de novo the interpretation of statutes and
ordinances. See Pingitore v. Town of Cave Creek, 194 Ariz. 261, 264, ¶ 18, 981
P.2d 129, 132 (App. 1998). When interpreting statutes or ordinances, we
give words “their ordinary or plain meaning unless it appears from the
context that a special meaning was intended.” Austin Shea (Ariz.) 7th St. &
Van Buren, L.L.C. v. City of Phoenix, 213 Ariz. 385, 391, ¶ 23, 142 P.3d 693, 699
(App. 2006) (citation omitted). At the same time, we afford judicial
deference to agencies charged with the responsibility of carrying out
specific legislation, and ordinarily give “great weight” to an agency’s
interpretation of a statute or regulation. U.S. Parking Sys. v. City of Phoenix,
160 Ariz. 210, 211, 772 P.2d 33, 34 (App. 1989). Because zoning ordinances
are in derogation of common law property rights, we strictly construe them,
and resolve any ambiguity or uncertainty in favor of the property owner.
Kubby v. Hammond, 68 Ariz. 17, 22, 198 P.2d 134, 138 (1948).

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¶12 In reviewing the Board’s decision, we restrict our review to
the Board’s administrative record. See Austin Shea, 213 Ariz. at 392, ¶ 29,
142 P.3d at 700; Pingitore, 194 Ariz. at 264, ¶ 21, 981 P.2d at 132 (emphasis
added). We will not substitute our judgment for that of the Board, reweigh
the evidence, or “consider the probative force of conflicting testimony.”
Mueller v. City of Phoenix, 102 Ariz. 575, 581, 435 P.2d 472, 478 (1967).
Instead, we consider the record to determine whether some credible
evidence supports the Board’s determination; if so, the Board’s decision
must be affirmed. See id. at 581-82, 435 P.2d at 478-79; Austin Shea, 213 Ariz.
at 392, ¶ 29, 142 P.3d at 700 (citations omitted).

¶13 A party attacking a Board decision “is met with the
presumption that it is correct and carries the burden” to show otherwise.
Mueller, 102 Ariz. at 581, 435 P.2d at 478. We will overturn the Board’s
decision only if the Board acted arbitrarily or capriciously, or abused its
discretion. Pingitore, 194 Ariz. at 264, ¶ 18, 981 P.2d at 132.

II. The Merits

¶14 Under PZO § 202, a “use permit” is defined as “[a]n
authorization to conduct a use or activity when such authorization is required
by this ordinance and when established according to the procedures in Section
307.” (Emphasis added.) Thus, by the plain language of PZO § 202, the sole
procedure for issuing a use permit is governed by PZO § 307.

¶15 Within PZO § 307, subparagraphs (A)(7)(a) and (b) provide
the criteria for the Zoning Administrator—and on appeal, the Board—to
issue a use permit. The Zoning Administrator (and Board) must find:

that the use[7] covered by the permit, or the manner of
conducting the same:[8]

7 Section 202 of the PZO defines the word “use” as “[t]he purpose for
which a building, lot, sign, or other structure is arranged, intended,
designed, occupied or maintained.” (Emphasis added.)

8 We note that the phrase “use covered by the permit, or the manner
of conducting the same” used in PZO § 307(A)(7) is written in the
disjunctive rather than the conjunctive. The PZO’s “Rules of Construction
and Definitions,” found in Chapter 2 of the PZO, provide no guidance as to
whether the phrase might be used in the conjunctive. The word “or,” as it
is commonly used, is a disjunctive particle used to indicate an alternative

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a. Will not cause a significant increase in vehicular or
pedestrian traffic in adjacent residential areas; or emit odor,
dust, gas, noise, vibration, smoke, heat, or glare at a level
exceeding that of ambient conditions; or contribute in a
measurable way to the deterioration of the neighborhood or
area, or contribute to the downgrading of property values.

b. Will be in compliance with all provisions of this
ordinance and the laws of the City of Phoenix.

PZO § 307(A)(7)(a)-(b).

¶16 With respect to PZO § 307(A)(7)(a), the administrative record
contains substantial evidence that the Property’s “use”—i.e., the purpose or
activity to be conducted—or manner of conducting that use will not
adversely affect neighboring properties in any significant or measureable
way. See Mueller, 102 Ariz. at 581-82, 435 P.2d at 478-79; Austin Shea, 213
Ariz. at 392, ¶ 29, 142 P.3d at 700; Arkules v. Bd. of Adjustment of Paradise
Valley, 151 Ariz. 438, 441, 728 P.2d 657, 660 (App. 1986).

¶17 With respect to PZO § 307(A)(7)(b), the Zoning Administrator
and Board must find the Property’s use or manner of conducting that use
complies “with all provisions of this ordinance and the laws of the City of
Phoenix.” Under PZO and Downtown Code § 1201(C)(1), for a downtown
Phoenix property to “be established, constructed, reconstructed, enlarged,
altered, moved or replaced . . . [t]he land use or function must be allowed
by the Use Matrix in the Character Area where the site is located.” The Use
Matrix, set forth in PZO and Downtown Code § 1204(D), provides that
interim surface parking is allowed in the City’s Warehouse Character
Area—an area that encompasses the Property—provided a use permit is
obtained. Thus, an interim surface parking lot is a permissible use under
the PZO and Downtown Code.

or to give a choice of one among two or more things. Boynton v. Anderson,
205 Ariz. 45, 49 n.2, ¶ 15, 66 P.3d 88, 92 n.2 (App. 2003) (citations omitted).
“We will usually interpret ‘or’ to mean what it says, and we will give it that
meaning unless impossible or absurd consequences will result.” Id.
(quoting State v. Pinto, 179 Ariz. 593, 595, 880 P.2d 1139, 1141 (App. 1994)).
We further note that Chapter 2 of the PZO does not define the words
“manner,” “conducting,” and “compliance” used in PZO § 307(A)(7)(a) and
(b).

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¶18 Levine acknowledges that PZO § 1204(D) “allows for surface
parking as an interim use,” but argues that SLP is nonetheless required to
comply with the City’s design standards with regard to setbacks,
landscaping, alternative paving materials, etc. Even assuming without
deciding that Levine is correct that SLP’s site plan does not comply with the
design standards of the Downtown Code,9 none of these issues were or
could have been decided by the Board, whose only decision was whether
SLP could have a parking lot (i.e., the use), not what the parking lot looks
like (i.e., the design). Section 307(A)(7)(b) expressly limits the compliance
requirement to whether the proposed use of the Property complies with the
PZO.10 Under the plain terms of PZO § 202, a “use” is defined solely as the
“purpose” of the property—in this case, an interim surface parking lot.
PZO § 202 does not define “use” to encompass setback requirements,
landscaping, the design or buildout of a property, etc. Therefore, we reject
Levine’s attempt to expand the PZO § 307(A)(7)(b) criteria to also require a
Board determination of compliance with PZO design standards. The Board
properly limited its decision to whether the Property’s use—operation of
an interim surface parking lot—complied with the PZO.

¶19 Levine suggests the Board should have approved SLP’s site
plan,11 the Board should have determined which design standards applied

9 In its answering brief and at oral argument, SLP has disputed
Levine’s claims that SLP has acknowledged the interim parking lot does not
comply with the PZO. We need not and do not decide this question.

10 According to the City, its staff has consistently interpreted § 1204 as
allowing an “interim use to proceed upon issuance of a use permit even if
the particular design elements may not perfectly fit the other strictures of
the Downtown Code.” As we have recognized, this interpretation is
ordinarily entitled to great weight. See Circle K Corp. v. City of Mesa, 166
Ariz. 464, 468, 803 P.2d 457, 461 (App. 1990) (citation omitted); U.S. Parking,
160 Ariz. at 211, 772 P.2d at 34.

11 Levine argues (in his briefs and at oral argument before this court)
that the Board approved the site plan, but the record, including the
transcript of the September 12, 2013 public Board hearing, does not support
his characterization of the Board’s decision. Although the proposed site
plan was placed before the Board to allow the Board’s assessment of the
proposed use, the issue of site plan approval was never before the Board.
We therefore agree with the superior court that the Board did not formally
approve the site plan at the September 2013 hearing; instead, the Board

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to the Property, and SLP should have sought a variance. These questions,
however, were not before the Board and are not properly before this court.
Instead, the sole decision properly before the Board was whether to uphold
the Zoning Administrator’s approval of the use permit to operate an interim
surface parking lot. See A.R.S. § 9-462.06(C) (“A board of adjustment shall
hear and decide appeals from the decisions of the zoning administrator.”);
PZO § 303(B)(1)(b) (“The Board of Adjustment shall have the authority to .
. . [h]ear and decide appeals from . . . the issuance of use permits . . . .”);
PZO § 303(C)(1) (allowing for “[a]ppeals from an order, requirement, or
decision made by the Zoning Administrator”); see also A.R.S. § 9-462.06(K)
(stating that a person aggrieved by a decision of the Board may file a
complaint for special action in the superior court to review the Board’s
decision); PZO § 303(C)(4) (same). The plain language of A.R.S. § 9-
462.06(C) and (K) and PZO § 303(B)(1)(b) and (C)(1) and (4) limits our
review to the “decision” before the Board. The Board’s decision was not
whether SLP’s preliminary site plan would comply, which zoning design
standards would apply given the interim use, or whether a variance would
be necessary for the preliminary site plan; instead, the sole issue presented
to and decided by the Board was whether to uphold approval of the use
permit pursuant to the criteria identified in PZO § 307(A)(7)(a) and (b).

¶20 Furthermore, requiring the Board to find that the preliminary
site plan and buildout comply with all zoning requirements would usurp
the authority of the City’s Planning & Development Department. Under
PZO § 1201(C)(2), for properties subject to the Downtown Code,
“[d]evelopment review approval must be obtained in accordance with
Section 507 of the Phoenix Zoning Ordinance.” Section 507 sets forth an
integrated city-wide development review procedure, which requires
approval by the Planning & Development Department of preliminary and
final plans to ensure compliance with technical standards of the Phoenix
City Code and the PZO.12 See generally PZO § 507(A)(1), (F), (I); see also

simply upheld the Zoning Administrator’s decision to approve the use
permit.

12 In its answering brief, the City states SLP “long ago went through
the City’s design review process (again, a process conducted separate and
apart from the Board of Adjustment), yet Levine has never challenged the
City’s approval by special action or otherwise.” Other than to argue the
Board approved the site plan at its September 2013 hearing, Levine does not
dispute these representations in his reply brief, or SLP’s representation at
oral argument that the site plan was separately approved.

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A.R.S. § 9-462.05(D) (2008) (requiring the legislative body of a municipality
to establish rules and procedures for review and approval of site plans).
The design review process is therefore distinct from the use permit issued
by the Board.13

¶21 Moreover, neither A.R.S. § 9-462.06(H)(1) nor its corollary,
PZO § 303(B)(2)(a), prevents the City from granting a use permit if a site
plan fails to comply with the PZO. Instead, the plain language of A.R.S.
§ 9-462.06(H)(1) and PZO § 303(B)(2)(a) prohibits the Board from issuing a
use variance or amending the PZO.14 See, e.g., Lane v. City of Phoenix, 169

13 The City’s use permit application form and variance/use permit
guidelines appear to be in accord by providing notice that approval of a
request for a use permit “does not replace the need for acquiring the
appropriate building permits, site plan approval,” and other licenses.
Additionally, the City’s variance/use permit guidelines provide that
inclusion of a site plan sketch with a variance/use permit application to the
Zoning Administrator/Board is merely “used by the Planning and
Development Department Information Services Section to draft finished
maps for the public hearing.”

14 The phrase “may not . . . [m]ake any changes in the uses permitted
in any zoning classification or zoning district” in A.R.S. § 9-462.06(H)(1) and
PZO § 303(B)(2)(a) means that the Board may not issue a use variance. See
Ivancovich v. City of Tucson Bd. of Adjustment, 22 Ariz. App. 530, 536, 529 P.2d
242, 248 (1974) (“A ‘use’ variance is one which permits a use of land other
than that allowed by the zoning ordinance.”); 2 Patricia E. Salkin, American
Law of Zoning § 13:9 (5th ed. 2016) (“[U]se variances . . . allow the
establishment of property uses that would otherwise be prohibited in the
zoning district . . . .”).

Also, the phrase “may not . . . make any changes in the terms of the
zoning ordinance” in A.R.S. § 9-462.06(H)(1) and PZO § 303(B)(2)(a) means
that the Board may not amend the municipal zoning ordinance. See 4
American Law of Zoning § 40:2 (“The powers of a board of appeals are
adjudicatory, not legislative. It does not have power to amend the zoning
ordinance.” (footnotes omitted)); see also Arnel Dev. Co. v. City of Costa Mesa,
620 P.2d 565, 570 (Cal. 1980) (recognizing that the issuance of use permits is
adjudicative and zoning amendments are legislative); State ex rel. Nealy v.
Cole, 442 S.W.2d 128, 131 (Mo. Ct. App. 1969) (“The Board has no legislative
power. It cannot amend, modify or change the Zoning Ordinance.”
(citations omitted)). The power to amend the PZO is a legislative act

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Ariz. 37, 41, 816 P.2d 934, 938 (App. 1991) (“[A] board of adjustment has no
legislative authority and acts solely in a quasi-judicial capacity in exercising
its zoning enforcement duties.” (citation omitted)); see also Ivancovich, 22
Ariz. App. at 535, 529 P.2d at 247 (stating that the City of Tucson Board of
Adjustment lacked authority to “amend or repeal any zoning ordinance for
this power belongs to the City Council”). In this case, the Board neither
issued a use variance nor amended the PZO, and A.R.S. § 9-462.06(H)(1)
and PZO § 303(B)(2)(a) do not extend the Board’s use permit obligations to
that of confirming that a site plan meets all PZO design standards. Those
responsibilities rest with the City Planning & Development Department,
not with the Board.

III. Costs and Attorneys’ Fees

¶22 Citing A.R.S. §§ 12-341 (2016), 12-2030 (2016), and 12-348
(2016), respectively, Levine requests costs and attorneys’ fees on appeal.15
Levine is not the prevailing party, however, and we deny his request.
Pursuant to A.R.S. § 12-341, we award costs to SLP and the City upon
compliance with Rule 21, ARCAP.

CONCLUSION

¶23 The superior court’s judgment is affirmed.

AMY M. WOOD • Clerk of the Court
FILED: AA

reserved to the City Council. See Phoenix City Charter, ch. IV, § 2(67); PZO
§ 506(A).

15 Section 12-2030 does not authorize an award of attorneys’ fees for an
appeal of a board of adjustment’s decision under A.R.S. § 9-462.06(K). See
Stagecoach Trails MHC, L.L.C. v. City of Benson, 231 Ariz. 366, 370, ¶ 20, 295
P.3d 943, 947 (2013). Section 12-348(A)(4) provides for an award of
attorneys’ fees to a party who prevails in a special action proceeding against
the state or other governmental entity, but not against a non-governmental
entity, such as SLP. See MVC Constr., Inc. v. Treadway, 182 Ariz. 615, 620–
21, 898 P.2d 993, 998–99 (App. 1995).

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