Opinion
No. 1 CA-CV 18-0286
05-02-2019
DREEM GREEN INC, Plaintiff/Appellant, v. CITY OF PHOENIX, et al., Defendants/Appellees.
COUNSEL Sacks Tierney P.A., Scottsdale By Philip R. Rudd Counsel for Plaintiff/Appellant Phoenix City Attorney's Office, Phoenix By Paul Li Counsel for Defendants/Appellees City of Phoenix Cohen Dowd Quigley, PC, Phoenix By Daniel G. Dowd, Betsy J. Lamm, Jenna L. Brownlee Counsel for Defendants/Appellees Nick and Lindsay Couturier
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 UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
Appeal from the Superior Court in Maricopa County
No. CV2017-007455
The Honorable Sherry K. Stephens, Judge
AFFIRMED
COUNSEL
Sacks Tierney P.A., Scottsdale
By Philip R. Rudd
Counsel for Plaintiff/Appellant
Phoenix City Attorney's Office, Phoenix
By Paul Li
Counsel for Defendants/Appellees City of Phoenix
Cohen Dowd Quigley, PC, Phoenix
By Daniel G. Dowd, Betsy J. Lamm, Jenna L. Brownlee
Counsel for Defendants/Appellees Nick and Lindsay Couturier
MEMORANDUM DECISION
Judge Jennifer M. Perkins delivered the decision of the Court, in which Presiding Judge Diane M. Johnsen and Judge Michael J. Brown joined
PERKINS, Judge:
¶1 Dreem Green, Inc. ("Dreem") appeals from a judgment of the superior court affirming a variance approved by a zoning adjustment board that allowed Nick and Lindsay Couturier (the "Couturiers") to open and operate a medical marijuana dispensary in north Phoenix. For the following reasons we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 The Arizona Department of Health Services ("DHS") allocates medical marijuana dispensary registration certificates by first dividing the state into population-based geographic areas, each known as a Community Health Analysis Area ("CHAA"). Ariz. Admin. Code ("A.A.C.") R9-17-101(7); see also Ariz. Rev. Stat. ("A.R.S.") § 36-2804(A).
¶3 It is undisputed that in October 2016 DHS issued a dispensary registration certificate to the Couturiers for the North Mountain CHAA, which runs approximately from Phoenix's 51st Avenue on the west to 18th Street on the east, and from Northern Avenue on the south to Greenway Parkway on the north. The Couturiers intended to lease space for their dispensary in a strip mall ("Property") at Dunlap Avenue and Interstate 17. The Property lies within "Phoenix City Council District One," a zoning district that comprises a sliver of Phoenix roughly between Interstate 17 and 51st Avenue and from Northern Avenue past the Carefree Highway.
¶4 The Property is zoned C2, which the zoning code describes as "commercial uses of medium intensity designed to be compatible with each other and to provide for a wide range of types of commercial activity." Phoenix Zoning Ordinance ("Ordinance") § 623(A). C2 zoning allows hundreds of commercial uses, including medical marijuana dispensaries. Ordinance § 623(D)(124). The Property is surrounded by other commercially-zoned parcels except for one parcel directly to the east, which is zoned S1. See Ordinance § 603 (S1 zone is "Ranch or Farm Residence District").
¶5 The Property lies 4,943 feet from another medical marijuana dispensary and 366 feet from a residentially-zoned parcel, the S1 parcel on the Property's east side, which means that a dispensary on the Property would violate the Ordinance's setback requirements. Ordinance § 623(D)(124)(e) (5,280-foot setback from any other dispensary), (f) (500-foot setback from residentially-zoned district). The S1 parcel is a vacant lot surrounded on all sides by commercially zoned and utilized properties.
¶6 The Couturiers applied to the City of Phoenix's Planning and Development Department for the appropriate variances and the matter was scheduled for a hearing. There, a hearing officer heard from the Couturiers and their lawyer, as well as several community organizers and one of Dreem's managing members. The Couturiers' lawyer explained that the dispensary registration certificate limited their dispensary to the North Mountain CHAA and that they had "looked at hundreds of properties [within the CHAA] and could still not find one that worked so they looked at the least amount of variances or impact that would be created." He told the hearing officer that the Property would require the fewest variances because the other sites were within various setback footages for churches, schools, and parks. The community organizers expressed concerns about safety in the area, and Dreem's managing member opined that approving the variances would "hurt the investment he had made" in Dreem.
¶7 The hearing officer denied the variances, finding there were "no special circumstances regarding [the] property." The Couturiers appealed to the City of Phoenix's Board of Adjustment ("Board").
¶8 At the hearing before the Board, the Couturiers' attorney spoke along with an attorney representing an anonymous "interested citizen" who opposed the variances. The Couturiers' attorney explained to the Board that at one point the Property and the area around it had all been zoned S1 and used as an egg farm, but parcels had gradually been sold off and rezoned upon their sale. This last parcel within 500 feet of the Property, he explained, had not yet been sold off and rezoned, and so it retained the S1 zoning even though it was no longer used as a ranch or farm residence.
¶9 The attorney presented a series of maps which showed the potential dispensary sites within the North Mountain CHAA. The first map showed the commercial and industrial zones within the CHAA in which the Ordinance allows medical marijuana dispensaries. He then overlayed that map with other maps showing required setbacks for schools, places of worship, parks, other sites already used for medical marijuana facilities, and residentially-zoned areas. See Ordinance § 623(D)(124)(e) to (h). The
Couturiers' attorney used the maps to show that due to the required setbacks, absent variances, the Ordinance would prevent the establishment of any medical marijuana dispensary within the North Mountain CHAA. He also explained that he had met several times with the community organizers and the Couturiers had agreed to stipulations regarding security and signage that went beyond those required by the City of Phoenix.
¶10 At the end of the hearing, the Board voted 3-2 to overturn the hearing officer and approve the variances with the stipulations described by the Couturiers' attorney.
¶11 Dreem then filed a special action complaint appealing the Board's decision, and asked the superior court to vacate the decision, issue a declaratory judgment that the variances were foreclosed by statute, and enjoin the Couturiers from developing a dispensary at the Property. After briefing and oral argument, the court affirmed the Board's decision and Dreem timely appealed.
DISCUSSION
¶12 We presume the Board's decision is valid and will not reverse it unless it is "against the weight of the evidence, unreasonable, erroneous, or illegal as a matter of law." Mueller v. City of Phoenix ex rel. Phoenix Bd. of Adjustment II, 102 Ariz. 575, 581 (1967); see also A.R.S. 12-910(E). "[I]f there is credible evidence to support the Board's decision, it must be affirmed." Austin Shea (Arizona) 7th St. & Van Buren, L.L.C. v. City of Phoenix, 213 Ariz. 385, 392, ¶ 29 (App. 2006). We review questions of law de novo. Siete Solar, LLC v. Ariz. Dep't of Revenue, 246 Ariz. 146, ___, ¶ 9 (App. 2019).
¶13 By statute, the Board may grant an appeal from a hearing officer's decision to grant or deny an area variance "only if, because of special circumstances applicable to the property, including its size, shape topography, location, or surroundings, the strict application of the zoning ordinance will deprive the property of privileges enjoyed by other property of the same classification in the same zoning district." A.R.S. § 9-462.06(G)(2). The Board, however, may not grant a use variance or grant a variance for circumstances that "are self-imposed by the property owner." A.R.S. § 9-462.06(H)(2).
¶14 The Board may decide an appeal arising from the hearing officer's "granting or denying of variances, the issuance of use permits, or in the interpretation of the provisions" of the Ordinance. Ordinance § 303(B)(1)(b). The Ordinance mirrors § 9-462.06 in barring the Board from
issuing use variances or alleviating the consequences of self-imposed circumstances. Ordinance § 303(B)(2)(b).
¶15 Municipal boards of adjustment are creatures of statute and may exercise only those powers "granted by the zoning ordinance in accordance with the statute." Arkules v. Bd. of Adjustment of Town of Paradise Valley, 151 Ariz. 438, 440 (App. 1986) (abrogated on other grounds by Legacy Foundation Action Fund v. Citizens Clean Elections Comm'n, 243 Ariz. 404, 407, ¶ 15 (2018)). Any action a board takes outside its statutory powers is ultra vires and void. Id.; see also Pawn 1st, LLC v. City of Phoenix, 242 Ariz. 547, 551-52, ¶ 11 (2017).
¶16 As an initial matter, as stated, the Property's C2 zoning allows for medical marijuana dispensaries; accordingly the Couturiers did not seek a "use" variance but instead sought "area" variances from the mandated setbacks. See Ordinance § 623(D)(124)(e), (f); Pawn 1st, 242 Ariz. at 553, ¶ 20.
I. Special Circumstances
¶17 The Couturiers argue the Board heard sufficient evidence that special circumstances impinged on the Property. They contend that due to the Property's location, the Ordinance deprived it the privilege of hosting a medical marijuana dispensary as enjoyed by similar parcels in the city. They also urge that the conditions were not self-imposed because they arose from the zoning and associated setbacks from the schools, churches, residences, and parks in the area. For its part, Dreem argues the Board was without authority to overrule the hearing officer because no special circumstances affect the Property and any special circumstances that may exist are self-imposed by the Couturiers.
¶18 In the zoning context, the term "special circumstances" is functionally equivalent to "hardship." Burns v. SPA Automotive, Ltd., 156 Ariz. 503, 505 (App. 1988). Special circumstances include those regarding a property's location and surroundings, A.R.S. § 9-462.06(G)(2), and must be applicable to the property itself rather than to the property owner, Pawn 1st, 242 Ariz. at 555, ¶ 31.
¶19 Credible evidence supports the Board's implicit conclusion that due to the Property's location and surroundings, strict application of the Ordinance will deprive the Property of privileges enjoyed by similarly-zoned parcels in the district. The Board received evidence that without a variance, medical marijuana dispensaries could be located on other C2-zoned properties within District One, albeit outside the North Mountain CHAA. Thus, the Property's location and surroundings, i.e., within the
setbacks of Dreem's dispensary and the S1 parcel, are special circumstances that would preclude the Property from hosting a medical marijuana dispensary, a privilege enjoyed by other C2-zoned parcels within District One. See Ordinance § 307(A)(9)(c) (variance necessary for preservation and enjoyment of property rights); Ordinance § 623(D)(124) (authorizing a medical marijuana dispensary).
¶20 Dreem argues that these circumstances apply to the Couturiers themselves and not to the Property because the Property could be used for a commercial purpose other than a medical marijuana dispensary. In support, it cites Haynes v. City of Tucson, 162 Ariz. 509, 510 (App. 1989), Burns, 156 Ariz. at 505, and Ivancovich v. City of Tucson Bd. of Adjustment, 22 Ariz.App. 530, 537 (1974), for the proposition that a board cannot grant a variance solely for the property owner's financial benefit. These cases are distinguishable.
¶21 All of the cited cases involved owners seeking variances to use their properties in a manner not allowed on similar parcels. In Haynes, the owner built a restaurant so large the property could not fit the minimum parking spaces mandated by Tucson's code. 169 Ariz. at 510. In Burns, the owner sought to install "a free-standing sign larger in area than permitted by the Scottsdale City ordinances." 156 Ariz. at 504. In Ivancovich, the owner and the lessee sought to add a third floor to a building in violation of the Tucson code's height limitation. 22 Ariz.App. at 532. Here, by contrast, the Couturiers sought a variance to use the Property in a way that is allowed on similar properties: for a medical marijuana dispensary. The property owners in Haynes, Burns, and Ivancovich sought privileges beyond those granted by the zoning ordinance, where the Couturiers seek only the same privileges granted by the Ordinance to other similarly zoned properties. See Ordinance § 623(D)(124).
¶22 Dreem contends that the operative restrictions are the geographical boundaries of the Couturiers' dispensary certificate, not the circumstances of the Property. But the point is that no one else with a medical marijuana dispensary certificate (for the North Mountain CHAA or elsewhere) could operate a dispensary on the Property because of Dreem's location and the nearby S1 parcel. The variances thus affect the Property, not its owner, and the benefits of the variances do not inure solely to the Couturiers.
II. Self-Imposed Circumstances
¶23 Even if special circumstances apply to a property, the Board may not grant a variance if those circumstances are self-imposed by the property owner. A.R.S. § 9-462.06(H)(2); Ordinance §§ 303(B)(2)(b), 307(A)(9)(b). Examples of self-imposed circumstances are an owner's desire to paint his home a non-conforming color, Arkules, 151 Ariz. at 441-42, a voluntary agreement with third parties to erect non-conforming signage, Burns, 156 Ariz. at 504-05, or unwitting construction of a non-conforming improvement in reliance on erroneous architectural plans, Rivera v. City of Phoenix, 186 Ariz. 600, 602-03 (App. 1996). Circumstances are not self-imposed where they "arise from applying the zoning ordinance to circumstances or conditions beyond the owners' control." Pawn 1st, 242 Ariz. at 554, ¶ 29.
¶24 Neither the Couturiers nor their lessor created the special circumstances affecting the Property. The Property cannot be used for a medical marijuana dispensary because it is too close to another dispensary and too close to a residentially-zoned lot. Neither the Couturiers nor their lessor are responsible for the locations of the other dispensary or the residential lot. Further, the Couturiers and their lessor can do nothing about the density of other uses in the area that require setbacks for medical marijuana dispensaries, or the size and shape of the North Mountain CHAA. See A.R.S. §§ 36-2803(A)(5) (DHS shall adopt rules governing dispensary registration), -2806.01 (cities may enact zoning regulations regarding medical marijuana dispensaries); A.A.C. R9-17-101(7) (definition of CHAA), R9-17-303(B)(2) (using CHAA to allocate dispensary registration certificates). An owner's knowledge of conditions that will require a variance "does not itself constitute a self-imposed special circumstance precluding an area variance." Pawn 1st, 242 Ariz. at 555, ¶ 32.
CONCLUSION
¶25 Credible evidence supports the Board's conclusions that special circumstances affect the Property and were not self-imposed. Accordingly, we affirm.