Court Opinion

ID: 2659135
Source: CourtListenerOpinion
Date Created: 2014-04-01 16:39:08.737696+00
Date Added: 2024-06-11T12:58:01.430263
License: Public Domain

NOTICE: NOT FOR PUBLICATION.
     UNDER ARIZ. R. SUP. CT. 111(c), THIS DECISION DOES NOT CREATE LEGAL PRECEDENT
                     AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.

                                      IN THE
                ARIZONA COURT OF APPEALS
                                  DIVISION ONE

U-HAUL CO. OF ARIZONA, an Arizona corporation; FREIGHT SALES,
  INC., an Arizona corporation dba AUDIO EXPRESS; and EDWARD
SANTACRUZ, as Trustee of the Edward Santacruz and Nancy Santacruz
         Revocable Trust dated 10/27/94, Plaintiffs/Appellants,

                                          v.

CITY OF TEMPE, an Arizona municipal corporation; EL FENIX, LLC, an
Arizona limited liability company; EL FENIX II, LLC, an Arizona limited
                 liability company, Defendants/Appellees.

                              No. 1 CA-CV 13-0073
                               FILED 4-1-2014

           Appeal from the Superior Court in Maricopa County
                          No. CV2011-008946
                The Honorable George H. Foster, Judge

                                    AFFIRMED

                                    COUNSEL

BRYAN CAVE LLP, Phoenix
By Steven A. Hirsch, Stanley B. Lutz
Counsel for Plaintiff/Appellant
Tempe City Attorney’s Office, Tempe
By Judith R. Baumann, Catherine M. Bowman, Clarence E. Matherson, Jr.
Counsel for Defendant/Appellee City of Tempe

Gammage & Burnham, P.L.C., Phoenix
By Richard K. Mahrle
Counsel for Defendants/Appellees El Fenix

                      MEMORANDUM DECISION

Judge Jon W. Thompson delivered the decision of the Court, in which
Presiding Judge Andrew W. Gould, and Judge Peter B. Swann joined.

T H O M P S O N, Judge:

¶1            In this appeal from a statutory special action,
plaintiffs/appellants U-Haul Co. of Arizona, Freight Sales, Inc. dba as
Audio Express, and Edward Santacruz (collectively Appellants) appeal
from the superior court’s decision in favor of defendants/appellees City of
Tempe (the City), and El Fenix, LLC and El Fenix II (collectively the El
Fenix entities). The court found that the City did not act in an arbitrary or
capricious manner or abuse its discretion when the Tempe City Council
approved a rezoning application, a General Plan Amendment, and a
Planned Area Development (PAD) Overlay, dismissed two other counts
alleging the City violated the gift clause of the Arizona Constitution and
violated Arizona Revised Statutes (A.R.S.) § 9-402 (2008), which requires
cities and towns to seek bids before selling any property, and concluded
that the City’s approvals conformed to the General Plan. For the
following reasons, we affirm.

                 FACTS AND PROCEDURAL HISTORY

¶2           U-Haul Co. and Audio Express own and operate businesses
on adjoining parcels north of property owned by the El Fenix entities on
Scottsdale Road in Tempe. 1 South of and adjoining the El Fenix property

1     Santacruz is the Trustee of the Edward Santacruz and Nancy
Santacruz Revocable Trust dated 10/27/94, which owns the property on
which Freight Sales, Inc operates Audio Express.

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is a sliver of land owned by the City located along the banks of Tempe
Town Lake (the Sliver Parcel). The El Fenix property and the Sliver
Parcel comprise the Hayden Harbor Property.

¶3             In October 2010, the El Fenix entities applied for
amendments to the City’s Zoning Map and General Plan, as well as a PAD
overlay, in anticipation of developing seven high-density and mixed-use
towers on the property. The application incorporated the Sliver Parcel
into the proposed development, and the City of Tempe, as owner of the
Sliver Parcel, was a co-applicant. U-Haul and Audio Express filed a legal
protest against the project. 2 They raised concerns about increased traffic
congestion along Scottsdale Road adjacent to their properties and claimed
they would be subject to particularized harm because their property
already suffered from extreme traffic congestion and vehicle stacking as
well as impaired access from Scottsdale Road, in that vehicles could make
only a right turn into their premises and a right turn exiting their premises
traveling south and could not access the location at all traveling north.
They further claimed that the project would impair their historical ingress
and egress over the Fenix property to reach a signalized intersection south
of their property at Playa del Norte and Scottsdale Road, noting that they
had proposed they be given a perpetual easement over the El Fenix
property, but that the El Fenix entities had not agreed.

¶4            The Development Review Commission held public hearings
on January 25, 2011 and February 22, 2011, and the Tempe City Council
held public hearings on March 10, 2011, and March 24, 2011. U-Haul and
Audio Express appeared and testified at each hearing. They requested
that the City require as a condition of approval that the El Fenix entities
give U-Haul and Audio Express a permanent easement to allow access to
their properties from the Playa del Norte intersection. The Mayor
expressed concern that such a condition would convey a gift of value
without compensation to the City in violation of the gift clause of the
Arizona Constitution. The traffic engineer for El Fenix entities opined that
the driveway U-Haul was seeking would create a potential safety hazard
on the property. U-Haul asserted that granting such a condition was
appropriate for the safety of the public; however, the Mayor expressed the
view that the benefit sought was more for the convenience of the
businesses north of the project than it was for public safety.

2     When a legal protest is filed, a zoning map amendment must be
passed by a three-fourths vote of the Tempe City Council. Tempe Zoning
& Dev. Code § 6-502(C).

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¶5            On March 24, 2011, the Tempe City Council, by a 7-0 vote,
adopted Resolution No. 2011.06, amending the City’s General Plan with
respect to the Hayden Harbor Property from open space to mixed-use
high density and passed Ordinance No. 2011.05 amending the Zoning
Map to designate the Hayden Harbor Property as a Mixed-Use High
Density District with a Planned Area Development Overlay (collectively
the March 2011 Development Approvals). The City Council imposed
certain conditions on the project, but did not impose a requirement that U-
Haul and Audio Express be given an easement across the El Fenix
property.

¶6             Appellants filed a special action pursuant to A.R.S. § 9-
462.06(K) (2008) seeking review of the City’s decision. Appellants’ four-
count complaint claimed that the City’s decision was arbitrary, capricious
and an abuse of discretion; that the City had included the Sliver Parcel in
the project and bestowed on the El Fenix entities benefits in the form of
tax credits, rebates, and waivers arising from a Development and
Disposition Agreement (DDA) with Playa Del Norte, L.L.C., the El Fenix
entities’ predecessor developer, and that such benefits constituted illegal
subsidies under the Gift Clause of the Arizona Constitution; that by
allowing the Sliver Parcel to be incorporated into the project, the City had
transferred the Sliver Parcel without competitive bidding in violation of
A.R.S. § 9-402; and that the effect of the City’s adoption of Resolution No.
2011.06 and Ordinance No. 2011.05 was a compensable regulatory taking
of their properties. Appellants sought an injunction to enjoin enforcement
of the resolution and ordinance.

¶7            The City filed a motion to dismiss Appellants’ claims for
violation of the Gift Clause and for failure to obtain competitive bidding
before transferring the Sliver Parcel, asserting that the claims were moot
or not ripe for adjudication. The City argued that the complained-of
benefits in the Playa DDA expired in 2005 by the terms of the DDA itself,
so any promises of benefits in that agreement were null and void, and that
the Sliver Parcel could not be the subject of a Gift Clause violation because
the City of Tempe still owned the property. Tempe also argued that,
because the Sliver Parcel was still owned by the City, Appellants’ claim
that the City had transferred it without competitive bidding failed.
Appellants responded that the status of the benefits under the Playa DDA
was not dispositive and that the actions of the City in allowing the Sliver
Parcel to be rezoned in support of the project without receiving
comparable consideration supported the claim for a violation of the Gift
Clause. Appellants further argued that in allowing the Sliver Parcel to be
incorporated into the project, the City effectively precluded compliance

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with the fair bidding requirement. The court granted the City’s partial
motion to dismiss, finding that the counts were not ripe for adjudication.

¶8            The parties submitted briefs on Appellants’ claim that the
City acted arbitrarily. Appellants argued among other things, that City
acted improperly by being a co-applicant with the El Fenix entities.
Appellants asserted that the project could not proceed without the Sliver
Parcel, owned by the City, and that the City therefore had to transfer the
Sliver Parcel to the El Fenix entities or enter into a joint venture
agreement, but did not. Appellants contended that the City acted as a co-
applicant to avoid taking the necessary proper steps to transfer the
property because they were problematic.          Appellants argued that by
approving the redevelopment plan and the zoning under these
circumstances, the City abused its discretion. Appellants further argued
that the City acted arbitrarily by not mitigating the adverse impacts the
project would have on U-Haul and Audio Express, particularly regarding
increased traffic and lack of access to the Playa Del Norte intersection, that
the March 2011 Development Approvals did not conform to the City’s
General Plan and did not consider the impact on the Salt River Outfall
Interceptor, a regional pipeline running under a portion of the El Fenix
entities’ property that transports wastewater to a treatment facility, and
that the City Council failed to make findings on the record as required by
the Zoning Code.

¶9            The court rejected Appellants’ arguments regarding the
Sliver Parcel, noting that the site plan was conceptual and subject to
change and concluding that the premise that the Sliver Parcel was
necessary to the rezoning and to the project was not supported by any law
or evidence. The court found that the City Council’s decision not to
impose an easement on the El Fenix entities for the benefit of Appellants
was not an abuse of discretion, noting that the Council had considered the
concerns regarding the traffic and recognized the negative impact, but had
indicated an intent to address the concerns during the project
development process. The court also found the Council had legitimate
concerns regarding granting an easement from one private property
owner to another private property owner without compensation. The
court rejected Appellants’ claim that the rezoning did not conform to the
General Plan, finding that the record supported the Council’s approval.
The court noted, however, that the Council had not made findings on the
record as required by the Tempe Zoning and Development Code, and
ordered the Council to make the findings. The City Council made the
findings and filed them with the court.

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¶10           The court denied Appellants’ motion for new trial, and
stayed any proceedings on Appellants’ claim for a regulatory taking. The
court’s judgment included language pursuant to Rule 54(b), Arizona Rules
of Civil Procedure. Appellants appealed. We have jurisdiction pursuant
to A.R.S. § 12-2101(A)(1) (Supp. 2013).

                               DISCUSSION

¶11          Appellants first argue that the trial court erred in dismissing
their claims that Tempe violated the Gift Clause and the statutory
requirements for the sale of property.

¶12           We review a decision granting a motion to dismiss de novo.
Coleman v. City of Mesa, 230 Ariz. 352, 356, ¶ 7, 284 P.3d 863, 867 (2012).
We accept as true the facts alleged in the complaint and will affirm the
dismissal only if the plaintiff would not be entitled to relief under any
interpretation of the facts susceptible of proof. Fidelity Sec. Life Ins. Co. v.
State, 191 Ariz. 222, 224, ¶ 4, 954 P.2d 580, 582 (1998). We do not, however,
accept as true conclusions of law or unwarranted deductions of fact. Folk
v. City of Phoenix, 27 Ariz. App. 146, 150, 551 P.2d 595, 599 (1976). We
resolve reasonable inferences in favor of the plaintiff. McDonald v. City of
Prescott, 197 Ariz. 566, 567, ¶ 5, 5 P.2d 900, 901 (App. 2000). In reviewing
the decision, we may consider documents attached to the pleading
because such documents are not “outside the pleading” under Rule
12(b)(6), Arizona Rules of Civil Procedure. Strategic Dev. & Contr., Inc. v.
7th & Roosevelt Partners, L.L.C., 224 Ariz. 60, 63, ¶ 10, 226 P.3d 1046, 1049
(App. 2010).

¶13           Appellants’ Count II alleged that the March 2011
Development Approvals violated the Gift Clause of the Arizona
Constitution because of tax credits, rebates, and waivers contained in the
Playa DDA and because the Approvals included the Sliver Parcel.

¶14           The Arizona Constitution directs that no city, town, or
municipality can “give or loan its credit in the aid of, or make any
donation or grant, by subsidy or otherwise, to any individual, company,
or corporation.” Ariz. Const. art. 9, § 7. A government entity violates the
Gift Clause when it receives inadequate consideration for the expenditure
of public funds such that the transaction constitutes a gift or subsidy to a
private entity. Turken v. Gordon, 223 Ariz. 342, 349, ¶ 30, 224 P.3d 158, 165
(2010).

¶15          Appellants argue that they adequately stated a claim for a
Gift Clause violation based on the inclusion of the Sliver Parcel in the

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March 2011 Development Approvals. They contend that their complaint
adequately stated that the Sliver Parcel was a necessary component of the
development project and that the City of Tempe received no
compensation or consideration from the El Fenix Entities for using the
Sliver Parcel.

¶16           The Sliver Parcel has not, however, been used in the project.
As alleged by Appellants, the Sliver Parcel is owned by the City of Tempe.
That ownership has not been altered by the rezoning of the parcel along
with the El Fenix entities’ property. Even if the Sliver Parcel is a necessary
component of the project, 3 the City has not as yet transferred the Sliver
Parcel to El Fenix entities. There has as of yet been no expenditure or
conveyance by the City requiring consideration.

¶17           Appellants also contend that they stated a valid current
claim for a Gift Clause violation based on tax credits, rebates, and waivers
contained in the Playa DDA. They argue that the court wrongly
considered unsupported factual allegations that the Playa DDA was void
and assert that the continuing validity of the DDA is irrelevant to whether
the complaint adequately stated a claim.

¶18           Appellants not only attached a copy of the Playa DDA to the
complaint, but also expressly incorporated that document by reference.
The court could therefore properly consider it, as it was not outside the
pleadings. See Strategic Dev. & Contr., Inc., 224 Ariz. at 63, ¶ 10, 226 P.3d at
1049. In Section 5.5.1 of the Playa DDA, the parties recognized that the
development was economically feasible only by the City of Tempe
waiving “fees for all planning and building plan check fees, excavating
and grading fees, engineering fees, and building permit fees.” In Section
5.5.2 the parties acknowledged that the development would be
economically feasible only by the City of Tempe granting “a sales tax
rebate of the City’s share of construction sales taxes . . . and excise sales
taxes.” Both sections limited the benefits “to projects for which the City
issue[d] a building permit within twenty four (24) months of the effective
date” of the agreement. The date of the agreement was August 21, 2003.
Appellants’ complaint recognized that Playa did not develop the
property. Consequently, any commitment to benefits in the form of tax

3     This assertion has been repeatedly refuted by El Fenix entities,
which has stated that the drawings used for the proceedings showing use
of the Sliver Parcel were conceptual only and that the project could
proceed without the Sliver Parcel.

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credits or fee waivers expired in August 2005 under the plain terms of the
Playa DDA. Therefore, Appellants could not maintain a claim based on
the waivers or tax credits included in that agreement.

¶19            Appellants also argue that the court wrongly concluded that
their claim that the City of Tempe violated A.R.S. § 9-402 was not ripe.
That section provides that a city or town may sell or convey all or any part
of its real or personal property, but must first issue a public invitation for
bids. A.R.S. § 9-402(A), (B) (2008). Appellants contend the March 2011
Development Approvals effectively transferred control of the Sliver Parcel
to the El Fenix Entities without the City of Tempe having complied with
the bid requirement. Appellants acknowledge that the City of Tempe has
not actually transferred the Sliver Parcel to the El Fenix entities. The
Appellants assert though that the March 2011 Development Approvals
have precluded fair bidding because the Sliver Parcel has been rendered
useless to any potential bidder other than the El Fenix entities.

¶20          The court properly found Appellants’ claim to be premature.
Because the City of Tempe has not sold or conveyed the Sliver Parcel, it
cannot have violated a statute requiring bidding before a sale or
conveyance. What might be done with the Sliver Parcel in the future is
speculation. At this time, the failure to invite bids on property prior to a
sale or conveyance cannot be a violation when no sale or conveyance has
occurred. 4

¶21            Appellants ask this court to remand the matter with
directions allowing them to amend their complaint. Appellants’ claims of
violations of the Gift Clause and of § 9-402 are not susceptible to
amendment. They are based either on a transfer of the Sliver Parcel,
which has not occurred, or on benefits provided in the Playa DDA, which
have expired. Amendment under these circumstances would be futile.
See Bishop v. State, 172 Ariz. 472, 474-75, 837 P.2d 1207, 1209-10 (App. 1992)
(court does not abuse discretion in denying a motion to amend where
amendment would be futile).

4      The City also argues that, as a Charter City, it is not subject to the
requirements of A.R.S. § 9-402. See City of Tucson v. Arizona Alpha of Sigma
Alpha Epsilon, Inc., 67 Ariz. 330, 335, 195 P.2d 562, 565 (1948). Because we
find that the statute is inapplicable because Tempe has not conveyed the
Sliver Parcel, we do not address this alternative argument.

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¶22         Appellants assert several bases on which it argues that the
Tempe City Council acted arbitrarily and capriciously with respect to the
March 2011 Development Approvals.

¶23            In making zoning decisions, a municipal body acts in a
quasi-administrative and legislative role. Town of Paradise Valley v. Gulf
Leisure Corp., 27 Ariz. App. 600, 605, 557 P.2d 532, 536 (1976). In reviewing
such decisions, courts are limited to determining whether the decision is
arbitrary or capricious, or an abuse of discretion. Murphy v. Town of Chino
Valley, 163 Ariz. 571, 574, 789 P.2d 1072, 1075 (App. 1989). The reviewing
court cannot substitute its opinion for that of the municipal body. Id. If
credible evidence supports the decision, the decision must be affirmed.
Austin Shea (Arizona) 7th St. & Van Buren, L.L.C. v. City of Phoenix, 213 Ariz.
385, 392, ¶ 29, 142 P.3d 693, 670 (App. 2006).

¶24            Appellants contend that the City improperly acted as a co-
applicant with the El Fenix entities. 5 They argue that the project cannot
be built without the Sliver Parcel, that the City was therefore required to
transfer the Sliver Parcel to the El Fenix entities, and that because the
means of transferring the Sliver Parcel would run afoul of the Gift Clause
and A.R.S. § 9-402, the City acted as co-applicant to allow the El Fenix
entities to obtain rezoning for the project.

¶25           Appellants’ argument is based on the faulty premise that the
Sliver Parcel was necessary to the project. Even if the parties intend that it
become part of the development, the testimony before the City Council
was clear that the development proposal at this stage is conceptual only.
The representative for the El Fenix entities told the City Council that they
were at the beginning of the planning process, that they were not sure
what the site plan would be, and that as they moved forward they would
determine where the buildings would be placed. The record does not

5      The City argues that Appellants have waived this issue by not
raising it before the City Council. See Englert v. Carondelet Health Network,
199 Ariz. 21, 26, ¶ 13, 13 P.3d 763, 772 (App. 2000) (appellate court
generally does not consider issues raised for the first time on appeal).
Appellants, however, were not required to raise the matter before the City
Council before challenging the ordinance in court. See Manning v. Reilly, 2
Ariz. App. 310, 313, 408 P.2d 414, 417 (App. 1965) (one need not exhaust
administrative remedies to challenge an invalid zoning ordinance).
Appellants did raise the issue in superior court.

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support the assertion that the project cannot proceed without the Sliver
Parcel.

¶26          Furthermore, the City still owns the Sliver Parcel, and
Appellants offer no authority to suggest that the City cannot apply to have
its own property rezoned, whether it does so independently or in
conjunction with another applicant.

¶27           Appellants further argue that the City acted arbitrarily and
capriciously by failing to require the El Fenix entities to give them an
easement across the El Fenix property as a condition of approving the
March 2011 Development Approvals. Appellants had raised concerns
about increased traffic congestion on Scottsdale Road with cars stacking
up in front of their properties. They sought to have permanent access
across the El Fenix property to reach a traffic light at Playa Del Norte and
Scottsdale Road south of Appellants’ property. 6 The City Council did not
impose the requested condition for an easement. The Council did not
abuse its discretion.

¶28          Section 6-601 of the Tempe Zoning and Development Code
provides:

      The decision-making body may impose conditions on any
      approval. Such conditions shall be designed to implement
      the requirements of this Code, protect the public from
      potential adverse impacts from the proposed use or
      development, or to fulfill an identified need for public
      services.

Under this provision, the City Council may impose conditions on
approval but is not required to do so.

¶29           The provision is intended to apply to protect the public from
negative impacts from a development. Despite Appellants’ assertion that
the City Council acted arbitrarily in not imposing the condition in light of
the potential drastic impact of the project on the traveling public,
Appellants do not explain how the easement they requested would ease
the anticipated traffic congestion or benefit any members of the public

6      Although Appellants refer to being allowed “continued” access
across the El Fenix property, they have no actual easement and have not
asserted prescriptive rights.

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other than their businesses and their customers. The Mayor recognized
this discrepancy, noting that traffic studies showed only twenty or thirty
vehicles entering and exiting the U-Haul property per day, expressing
skepticism that the easement would change the traffic congestion in any
way, and concluding that the requested easement would provide value to
U-Haul and Audio Express only. Both the Mayor and another councilman
expressed concern about imposing a condition on one private party for the
benefit of another private party. The Mayor also suggested that a more
appropriate time to address and resolve traffic issues would be at a future
date when an actual design for construction on the site was being
prepared.

¶30           In addition, the traffic consultant for the El Fenix entities
acknowledged that traffic was congested and that the development would
have a major impact on future traffic conditions at three intersections in
the area, including the intersection at Playa Del Norte and Scottsdale
Road.     That consultant also testified, however, that the easement
requested by Appellants would create a potential safety hazard because
vehicles traveling on the proposed easement would have to join an
existing queue at the development’s driveway waiting for the light at the
intersection.

¶31          The record here contains evidence to support the City
Council’s decision to not impose an easement on El Fenix entities for the
benefit of Appellants. The City therefore did not abuse its discretion in
denying Appellants’ request.

¶32           Appellants also argue that the City Council failed to
consider the impact of the proposed development on the Salt River Outfall
(SRO) Interceptor, a pipeline located on the Hayden Harbor Property and
operated by the Subregional Operating Group (SROG). This claim lacks
merit.

¶33           The March 2011 Development Approvals included seven
conditions, one of which provided:

      Prior to final acceptance of the request to relocate the Salt
      River Outfall (SRO) Interceptor and its easement, located
      near the northwest portion of the property, the Sub-Regional
      Operating Group (SROG) Advisory Committee of the Joint
      Municipal Water Reclamation System shall review the
      request to make a determination of approval on any changes
      related to the interceptor. This approval shall be completed

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      prior to issuance of any building permits which may affect
      the area within the easement of the SRO Interceptor.

Clearly, the City Council considered the SRO Interceptor and addressed
any concerns by requiring approval by SROG before the City will issue
building permits on any project.

¶34           Appellants also argue that the City Council abused its
discretion because it failed to make required findings under the City’s
Zoning and Development Code. Under Section 6-502(B), “findings of fact
justifying the decision shall be noted for the record.” Tempe Zoning &
Dev. Code § 6-502(B). A zoning ordinance enacted without substantial
compliance with statutory requirements is void. Manning v. Reilly, 2 Ariz.
App. 310, 313, 408 P.2d 414, 417 (App. 1965).

¶35           The City Council here failed to make findings at the time of
its decision. The Council did, however, comply with the substantive
requirements of § 6-502. The Council conducted public hearings, gave the
applicants the opportunity to explain the project, gave the protestors the
opportunity to explain their opposition, applied the appropriate standard
requiring a three-fourths majority for approval because of the legal
protest, and rendered its decision. Tempe Zoning & Dev. Code 6-502(A),
(B), (C). Although the City Council failed to make the required findings
for the record at the time, it has since done so, and Appellants have raised
no argument finding fault with those findings. Given the Council’s
compliance with the procedural requirements in the conduct of the
hearings, we view the failure to make its findings at the time of the
hearing to be a technical failure, now remedied, that does not require
finding the ordinance void.

¶36           Appellants also argue that the March 11 Development
Approvals do not comply with the City’s General Plan and therefore the
City Council abused its discretion in adopting them. They also contend
that the rezoning violates the policies and intent behind the General Plan.

¶37          The Tempe Zoning and Development Code provides that no
General Plan Amendment shall be approved unless it substantially
conforms to the following criteria:

      1.     Appropriate short and long term public benefits;

      2.    Mitigate impacts on land use, water infrastructure of
      transportation;

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      3.    Helps the city attain applicable objectives of the
      General Plan;

      4.     Provides rights-of-way, transit facilities, open space,
      recreational amenities or public art;

      5.   Potentially negative influences are mitigated and
      deemed acceptable by the City Council; and

      6.      Judgment of the appropriateness of the amendment
      with regard to market demands, and impacts on
      surrounding area, service, fiscal, traffic, historic properties,
      utilities and public facilities.

Tempe Zoning & Dev. Code § 6-302(D). Without elaborating, Appellants
assert that the March 2011 Development Approvals do not substantially
conform to any of these criteria.

¶38           According to the development plan presented to the
Council, the completed project, on land currently vacant, would stimulate
the economy of the area. A development including office space, shops,
restaurants, and entertainment facilities would increase demand for
commercial services on and off-site, increasing the City’s tax base. The
project intended to provide access to the open space and recreational
amenities of Town Lake and to create a garden-like environment with
pockets of open space. These features conform to the stated criteria.

¶39           In addition, the Tempe General Plan 2030, adopted in 2003,
projected that the area in question would be mixed-use. The Staff
Summary Report (SSR) for the City Council’s March 24 hearing noted that
the requested amendments would more accurately align the properties
intended for development from those properties intended to be open
space, consistent with the General Plan. In explaining why the rezoning
would be in the public interest and why it would conform to and facilitate
the General Plan, the SSR stated that the rezoning would be consistent
with the General Plan Land Use maps and provide the property with
necessary infrastructure and improvements that benefit Tempe’s goal for
development around Town Lake. In recommending approval of the
General Plan Amendment, Zoning Amendment, and PAD Overlay, the
SSR expressly found that the request met the criteria. Specifically, the SSR
found that the project met the Projected Land Use and Projected
Residential Density for the site under the General Plan and that the
Zoning Amendment was compatible with similar projects around the
Tempe Lake vicinity.

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¶40           The record contained adequate evidence from which the
City Council could conclude that the requested amendments were
consistent with the General Plan. This court is not in a position to second
guess the City in making such a decision. See Murphy, 163 Ariz. at 574, 789
P.2d at 1075.

¶41          Appellants also assert that, because the project was not
intended to begin vertical construction until 2015, the City Council’s
decision violated a development policy for the Rio Salado Specific Area
Plan, which provided:

       Land speculation is strongly discouraged.         Developers
       should be prepared to begin substantial (i.e. vertical)
       construction of at least the first phase of any project within
       two years of Council approval.

The City Council imposed a condition on the El Fenix entities requiring
them to complete a building permit application by February 24, 2015, with
the intent to commence construction, or the zoning could revert back to
open space. The Council thereby allowed the El Fenix entities two years
longer than the policy indicates.

¶42            The policy does not impose a mandatory deadline requiring
developers to build within two years; rather it states that applicants
“should be prepared” to build within two years. The policy also does not
constrain the City Council from modifying the deadline. The Council here
was advised that the Rio Salado Specific Area Plan applied, as evidenced
by a copy of the policies being included in the SSRs for both the March 10
and March 24 hearings before the City Council. Although it does not
appear that the policies were discussed at either hearing, the Mayor noted
in another context that funding for the project in the existing economy
would be difficult. He also noted that the owners were attempting to
bring the property out of a bad financing situation involving bankruptcy
so they could move forward toward development, which would benefit
the community. We cannot find that the City Council’s decision to allow
time in excess of the Rio Salado Specific Area Plan policies was an abuse
of discretion.

                              CONCLUSION

¶43            We affirm the superior court’s dismissal of Appellants’
claims for violation of the Gifts Clause and for failing to invite bids for the
sale of the Sliver Parcel. Appellants’ claims fail because the City did not
transfer the property and because the alleged gifts under the Playa DDA

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                     U-HAUL et al. v. TEMPE et al.
                        Decision of the Court

have expired. We find no abuse of discretion in the City Council’s
approval of the General Plan Amendment, the Zoning Amendment, and
the PDA Overlay. We further find that the record supports the conclusion
that the March 2011 Development Approvals conform to the General Plan.
The superior court’s ruling is affirmed.

                                 :MJT

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