Prominent downtown property owners are seeking City Council approval for a medical marijuana dispensary in downtown Scottsdale –one year after a similar effort failed in the face of local opposition.
The applicant is also asking the city to reduce separation requirements in downtown for dispensaries and protected uses like churches, schools and daycares.
According to an application filed in September, an entity owned by Shawn and Steven Yari is requesting a conditional use permit to allow a dispensary as part of a larger redevelopment in the Entertainment District.
A lawyer for Equity Partners Group LLC filed a separate rezoning application for the Shoeman Lane project that would allow it to redevelop three existing buildings it owns near Shoeman Lane and Wells Fargo Avenue into a two-story building with a dispensary and retail uses on the first floor and a boutique office on the second floor.
The Yaris owns Equity Partners Group, according to Arizona Corporation Commission records.
The buildings are currently operating as a pizza parlor and taco shop.
The Yaris are also asking Council to reduce separation requirements. A city ordinance requires a dispensary to be 1,500 feet from schools, parks, churches, daycares and residential zones.
The application asks the city to reduce that separation to 650 feet for downtown dispensaries only.
Shawn and Steven Yari operate Stockdale Capital Partners and own dozens of properties downtown, including the Galleria Corporate Centre, W Scottsdale hotel and much of the property in the Entertainment District.
In December 2019, the Progress reported the brothers were in the process of seeking city approval for Scottsdale Collection, a massive redevelopment of the Entertainment District that would see many clubs and bars replaced by hotels, office and retail uses and apartments.
The Yaris’ dispensary application comes nearly a year after another attempt to bring a dispensary downtown was canceled following backlash from local property owners.
At the time, an applicant sought to open a Sunday Goods dispensary in the former Club Tattoo building east of 5th Avenue and Scottsdale Road, just one-quarter mile from the Yaris’ new site.
Several local property owners opposed that project, arguing it violated city rules requiring 1,500 feet of separation between dispensaries, schools and other protected uses.
The Sunday Goods site was located near a local preschool and a Christian Science reading room.
At the time, representatives for the proposed dispensary said they were in talks to buy out both the preschool and the reading room.
Neighboring property owners Gary Bohall and Daniel Spiro also argued the proposed two-story dispensary would negatively impact a larger-scale redevelopment they planned for the area.
Spiro and Bohall eventually gathered enough signatures to invoke a rule requiring supermajority approval by Council to approve the dispensary’s rezoning application.
The Sunday Goods team pulled its application from consideration after it became clear it did not have the five votes needed for approval.
While opposition from neighbors to the Shoeman Lane project is unlikely because the Yaris own much of the property surrounding the new project, the separation requirement remains a problem for them.
Based on measurements available in Google Maps, the proposed dispensary is about 1,300 feet away from Perform to Learn Preschool – the same school that caused problems for the Sunday Goods proposal.
If the separation requirement is reduced to 650 feet, the proposed dispensary would not be located within that radius near a school, church, daycare or park, according to the application.
The project is just 60 feet from The Stetson apartment complex but it does not qualify for a protected residential use requiring 1,500 feet of separation.
“The 1500-foot separation applies to residential uses that have residential zoning,” Scottsdale Senior Planner Greg Bloemberg said. “The residential to the south of the applicant’s location does not have residential zoning. As such, the 1500-foot separation does not apply.”
According to the County Assessor, the Stetson complex is zoned commercial.
Still, if the Sunday Goods battle was any indication, the project is likely to draw significant interest from both those in favor and against bringing a dispensary to downtown Scottsdale.
In the permit application, attorney Jason Morris argued that southern Scottsdale is an underserved community – the same argument the applicant made in the Sunday Goods case.
Morris said Scottsdale’s southern half only has one dispensary, which is located farther north at Via de Ventura and Loop 101.
By comparison, northern Scottsdale has four dispensaries.
The Arizona Department of Health Services, which regulates dispensaries, used so-called Community Health Analysis Areas to determine where dispensaries can be located.
Two CHAAs cover the vast majority of Scottsdale, with one in the north and one covering an area from about Via de Ventura in central Scottsdale to the city’s southern border with Tempe.
The department originally issued one permit for the southern Scottsdale CHAA that is now in operation as Monarch Wellness Center.
It issued a second permit in 2017 but that permit holder has yet to find a property in the southern Scottsdale area that conforms with all of Scottsdale’s separation requirements, which are stricter than comparable cities in the Valley.
For medical marijuana patients living in downtown or further south in Scottsdale, the closest dispensaries are Monarch Wellness Center or other facilities in Tempe or Phoenix – all of which are six miles or more away from the southern edge of downtown Scottsdale.
During the Sunday Goods debate, some residents called these distances prohibitive to care.
In August 2019, resident Thomas Lovell told the Planning Commission he was undergoing cancer treatment and had to drive 30 minutes to the nearest dispensary.
“That’s a nuisance when you’re not feeling well,” Lovell said.
The permit application could also be inextricably tied to the fate of Prop 207, the recreational marijuana proposition.
That proposition, if approved, would give existing medical marijuana dispensaries a head start in receiving recreational licenses from the state, so any dispensary approved now would have a fast track to selling recreational weed.
The results of Scottsdale’s own City Council election could also determine the project’s fate.
Shoeman Lane does not currently have a date for Council consideration and if it reaches City Hall after Dec. 31, it will likely face a very different Council as three seats are up for election.
At a candidate forum in June, Council hopefuls laid out their opinions on recreational marijuana.
Tom Durham, Betty Janik, Becca Linnig and incumbent Councilman Guy Phillips said they did not support legalizing recreational marijuana.
Tammy Caputi and John Little said they supported legalization.
Even if the Shoeman Lane project receives Council approval, it’s unclear when a dispensary would go into operation.
That’s because, unlike Sunday Goods, the building owner does not currently have a deal in place with the second dispensary license holder in the southern Scottsdale CHAA.
“We are representing the landlord/developer and there is not a specific licensee associated with the application at this juncture,” Morris said.