Red Mountain v. Cobblestone

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

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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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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).

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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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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.

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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

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