Plans for downtown Scottsdale’s first medical marijuana dispensary are on hold for now amid opposition from area property owners who are worry the project would stifle their own plans for redevelopment.
The Scottsdale City Council, which was scheduled to consider a rezoning and conditional use permit application by the Sunday Goods dispensary on Oct. 2, postponed the case at the applicant’s request.
Dispensary spokesman Jason Rose said the applicant wants more time to answer the community’s questions about the business, which would occupy the current Club Tattoo building at Fifth Avenue and Winfield Scott Plaza.
Rose also indicated some property owners were attempting to stonewall the project.
“Additionally, some questions have been raised by out of state property owners and anti-competitive businesses so we are going to take the time to properly answer them for the benefit of an area the state issued a new license for,” Rose told the Progress.
David Ortega, a former Scottsdale councilman who is representing some property owners opposing the dispensary, had a different opinion.
“They were going to lose,” Ortega said, indicating he thought the item was postponed because the applicant did not have enough support on the council.
The site is currently zoned as central business – which does not allow for medical marijuana, according to Jason Morris, a zoning attorney representing the dispensary.
The dispensary is requesting the zoning be changed to commercial office with a downtown overlay as well as a conditional use permit the city requires for marijuana businesses.
Much of the opposition has come from local property owners, some of whom are planning their own mixed-use development they believe would be negatively-impacted by the dispensary.
Two of those owners are Gary Bohall and Daniel Spiro, who each own properties that share an alley with the proposed dispensary site and oppose “spot zoning” the site to commercial-office, arguing it is not in line with the city’s downtown plan for the area.
Spiro, a local architect, and Bohall, a CPA from Colorado Springs, said their proposed mixed-use building 60 to 90 feet tall fall in line with that plan and the area’s existing C-2 zoning.
Bohall said he would like to see the existing tenants in the area occupy the new building, which he envisions with ground-level retail-office and residences above.
“We want the same mix of retailers and businesses we have now; we want them all to stay,” Bohall said.
Both Spiro and Bohall said they have discussed their plans with other property owners interested in partnering on the project, though they said the plans are in the early stages and they have not contacted development partners yet.
Rose said the dispensary will use the extra time allowed by Council to address all concerns from all neighbors – including Spiro and Bohall.
“A developer is attempting a land assemblage of the block to build a high rise and thinks if Sunday Goods is approved at low scale it will intrude on their vision,” Rose said. “No matter from whom, we intend to answer every question to ensure this redevelopment of a tattoo parlor makes as much sense as the public opinion polls that support it.”
Rezoning the dispensary site would not preclude Spiro or Bohall from building within C-2 zoning specifications.
However, they both argue it will be difficult to attract developers for taller heights on a block with a two-story building sitting in the middle of it.
Spiro, who runs an architecture business out of his building, also said he thinks the dispensary could hurt his business and the potential new development by pushing away current clients and tenants who do not approve of the use.
Rose, the dispensary’s spokesperson, called that argument “specious.”
“As for intruding on development, that makes me roll my eyes,” Rose said. “In north Scottsdale there are four dispensaries and it has not held up development or redevelopment there.”
Several other area property owners echoed Spiro’s concerns to the City Planning Commission and Council, including downtown dentist Michael Templeton and David Dodge, owner of the nearby Codakid coding academy.
Spiro insists he is not opposed to medical marijuana and he voted to legalize it in 2010.
“We don’t mind medical marijuana,” Spiro said. “What we do mind is medical marijuana right where we’re at; some of us have great reservations, because we know that recreational marijuana is going to follow.”
Ortega said he plans to ask the City Council at a future meeting to dismiss the dispensary’s application altogether on the grounds that Sunday Goods’ parking plan violates state rules for dispensaries.
According to City Code, the Sunday Goods project is required to provide eight parking spaces. However, the current application is calls for three parking spaces on site with an additional five “in-lieu” spaces, according to a City Council memo.
Through the in-lieu parking program, property owners in downtown Scottsdale can pay a fee instead of providing the required amount of on-site parking.
The Arizona Administrative Code states, “A dispensary shall provide onsite parking or parking adjacent to the building used as the dispensary.”
Ortega argued the in-lieu parking included in the dispensaries plan is not tied to physical spots at or near the dispensary.
Rose said the parking situation is one of the reasons the applicant asked for a continuance and he is confident they will solve the issue before the application comes back before the Council.
“We are working with the city to provide real parking spots in accordance with all city and state ordinances,” Rose said. “That is one reason we asked for more time, and we are confident we will do that.”
Rose argued that a tall mixed-use project would negatively impact downtown parking more than a dispensary, though Spiro said plans to include adequate on-site parking in a garage.
Spiro and Bohall also filed a legal protest of the project days ago with the City Clerk’s office that could require the project to garner support of three-fourths of the City Council rather than a simple majority.
They cite A.R.S § 9-462.04, which states a three-fourths vote is required for approval of a zoning amendment if 20 percent or more of the area property owners protest.
Spiro said the protest has the support of well over 20 percent of the property owners, though the Progress was unable to verify that support.
There is also some question about whether the current location qualifies for a dispensary due to a nearby preschool located within 250 feet of the site.
The city’s ordinance requires dispensaries to be 1,500 feet away from schools and state law requires at least a 500-foot separation.
However, a September 2018 letter from McCartney K. Hart, owner of the Perform to Learn preschool, said they “will cease operations prior to, or contemporaneous with” the dispensary’s permit application – a contention the preschool’s landlord has challenged in the past.
Hart did not respond to a voicemail requesting comment left with the preschool.
“It is unclear as to why the property owner and preschool owner (tenant) are not consistent,” said Scottsdale Senior Planner Bryan Cluff. “Either way, stipulation number one on (the case) does not allow the medical marijuana use to operate until the site is compliant with all separation requirements.”