AZ Appeals Court Finds Abuse of Discretion in Conditional Use Permit Battle

This post was authored by Gregory Ahlsen, Jacob D. Fuchsberg Touro Law Center

In January 2017, a water company applied for a conditional use permit with the City of Sedona, Arizona (the “City”) to construct a water tank and pumping plant on a vacant lot in a residentially zoned district. The water company held public meetings with residents to discuss the proposed project. In August 2018, the City’s Planning and Zoning Commission (the “Commission”) held its first public hearing on the permit application. The water company submitted a staff report describing the findings required under the Sedona Land Development Code 420.06 (the “Code”). The report explained that under the Code the Commission would grant a conditional use permit only if: (1) the project agreed with the Code’s objectives and the zoning district purpose in which it was proposed, (2) granting the permit would not be materially detrimental to the public health, safety or welfare, (3) the proposed use was reasonably compatible with the types of use permitted in the surrounding area, (4) the proposed use would comply with the Code and (5) any proposed expansion or change would be no more deleterious than the current use. The report detailed its findings on how the water company’s proposal met each requirement of the Code. After listening to the presentation from the water company and hearing comments from the public, the Commission expressed concerns over the proposal and voted to continue the hearing until October 2018 with guidance for the water company on redesigning the project.

In October 2018, a second hearing was held where the water company presented several design changes to the project. The Commission listened to the presentation, asked questions, and allowed the public to comment before voting on the matter. The Commission voted to grant the permit based on the water company’s compliance with all ordinance requirements of the Conditional Use Permit findings and Code requirements.

Shortly after the Commission granted the permit, Vincent McGeary, a Sedona resident, appealed the Commission’s decision to the City Council (the “Council). The Council held a special meeting to hear McGeary’s concerns. McGeary claimed that the Commission did not properly make the required findings under the Code because the Commission adopted the findings from the water company’s staff report rather than make their own findings. The Council affirmed the Commission’s decision after finding that the Commission properly adopted the findings of the staff report that there was compliance with the Code.

McGeary filed a special action with the Superior Court of Arizona alleging that the Commission and Council failed to make independent findings required by the Development Code and lacked the authority to adopt the water company’s staff report findings. The court stated that it could not decide the merits of the underlying dispute because the lack of specific findings to the claim prevented meaningful judicial review. The court vacated the Commission’s decision to grant the permit and remanded the case to the Commission and Council for further explanation. McGeary then asked the court to enter final judgment by arguing that the court lacked the authority to remand the case to a municipality. After briefing on the issue, the court vacated the remand portion of its decision and entered final judgment for McGeary. The City and Council appealed the Superior Court’s decision.

The Court of Appeals of Arizona determined that the superior court accepted jurisdiction when it entered a final judgment on the claims. The Court of Appeals reviewed the superior court’s decision for an abuse of discretion. The Court stated that neither the superior court or the Court of Appeals has the jurisdiction to substitute its opinion of the facts for that of the Commission. The Court also stated that if there is credible evidence to support the Commission’s decision, then the decision must be affirmed by the superior court and the Court of Appeals. Despite McGeary’s claim, the Court determined that there is no requirement for the Commission to make its own findings of compliance to the requirements of conditional use permit in the Code. Additionally, the Court found that the staff report submitted by the water company explained each finding in detail. The Court found that the Commission reviewed several presentations and reports and held public hearings prior to adopting the findings outlined in the staff report. The Court determined that by adopting the findings of the staff report, the Commission thus made the findings required by the Code.

The Court found that there was substantial record evidence to support the Commission’s decision to grant the permit and that the superior court had to affirm the decision. The Court found that the superior court abused its discretion by vacating the Commission’s decision, and reversed the court’s orders vacating the Commission’s grant of the conditional use permit.

McGeary v. City of Sedona, 2022 WL 5237715 (AZ 10/6/2022)