Prescott postpones Prescott Plaza Hotel decision, demands historic preservation analysis by August 5

Prescott Postpones Whiskey Row Hotel to August 5, Demanding Historic Preservation Analysis Before State Deadline Triggers Automatic Approval

On July 9, 2025, Prescott City Council voted unanimously to delay its decision on the controversial Prescott Plaza Hotel—a 47-room, 4-story boutique hotel proposed for Whiskey Row—and set an emergency council meeting for August 5 at 3:00 p.m. to allow staff and the Historic Preservation Commission to complete a detailed analysis of whether the revised design conforms to the city's historic preservation guidelines. The decision came after three hours of intense public testimony, legal arguments about property rights versus community character, and a stark reminder of the city's 60-day statutory deadline (August 15) under Arizona's Permit Freedom Act, after which the city risks automatic approval if it takes no action.

Key Speeches

"Mr. Grisset has a right to lawfully use his property and to develop it. He wants to replace an aging, underused structure with a boutique hotel that would serve the community, boost tourism, and bring renewed vitality to Whiskey Row." — John Riches, Goldwater Institute attorney representing developer Jim Graassette

"The Arizona legislature passed what's known as the permit freedom act, codified at Arizona revised statute 9-843. When this council is considering a permit application, it has to base the adoption or denial on clear and specific criteria. It can't rely on vague and subjective criteria." — John Riches, Goldwater Institute

"Whiskey Row is the crown jewel of Prescott We have only one chance to get this right. If we don't get it right, we will not have whiskey row. Mr. Grisset is doing an end run on the preservation commission. He is coming towards you instead of coming towards us. We should have been seen these plans first." — Rick Spring, Historic Preservation Commission Acting Chair

"We're a little weak on the amount of information that we need to make a decision on this. I would recommend that we postpone action until we receive the full analysis coming from the community development and historical preservation commission specialist and then we can decide what action that we want to take at that time." — Mayor Good

"I look at this thing if I depart my emotion from the fact that I was told today by the historic preservationists that this project is now mostly in conformance. And so then I have to analyze, do I say no just because I don't want this project there and then bring the city into a situation where we're going to be spending taxpayers dollars to defend something that we're probably never going to win at the end of the day." — Mayor Pro Tem (unnamed in transcript)

Timeline

• Original proposal & denial (July 2023): Prescott Preservation Commission voted 7-0 to deny the hotel project (then five stories, 60 feet).
• Council appeal & uphold (March 26, 2024): City Council voted unanimously to uphold the PPC's denial.
• Redesign submitted (June 16, 2025): Applicant Jim Graassette resubmitted revised design (reduced to four stories, 48 feet maximum height, added Juliet balconies, removed sandstone banding, reconfigured windows/entries).
• Applicant presentation (July 9, 2025, ~2:00 p.m.): Planning Manager Alex Brammelt presented the revised design. Goldwater Institute attorney John Riches argued the city's design guidelines violate Arizona's Permit Freedom Act (ARS 9-843) by relying on vague criteria like "mass and scale" without clear, objective standards. He invoked Barry Goldwater's legacy on property rights and warned of a 60-day state deadline (August 15) and potential litigation exposure.
• Public comment (July 9, ~2:15–3:15 p.m.): Thirteen speakers (multiple opponents, one supporter). Opponents raised concerns about historic preservation, parking, traffic, construction disruption, market saturation, and procedural impropriety. Supporters argued the revised design was compatible and would benefit downtown.
• Council discussion (July 9, ~3:15–3:45 p.m.): Council members expressed frustration with incomplete information and conflicting legal interpretations. Mayor Pro Tem, Patrick Grady, Councilwoman Furworth, and Councilman Mononttoya all requested detailed written staff analysis before voting. Ted Gambogi argued the discussion had become too emotional and called for objective criteria. Mayor Good moved for postponement.
• Vote to postpone (July 9, ~3:45 p.m.): Ted Gambogi moved to schedule a special meeting August 5 at 3:00 p.m. to allow preservation specialist Kaylee Nunees to prepare a detailed conformance/non-conformance analysis. Motion passed 7-0.
• Coordination discussion: City Clerk and staff confirmed availability; Historic Preservation Commission Acting Chair Rick Spring agreed to attempt a special PPC meeting before August 5 (next regular meeting is August 8, which falls after the council deadline).

Opposition

Number of speakers against: 9 public speakers opposed the hotel project; 1 supportive.

Main concerns (opponents):

1. Historic Preservation Conflict: The Whiskey Row district is Prescott "crown jewel" and symbol of the city's identity. A four-story hotel, even if reduced from five stories, remains architecturally incompatible with the low-scale Victorian storefronts and saloons that define the district. Multiple opponents and the HPC chair noted that minor modifications (Juliet balconies, removal of sandstone banding) do not fundamentally alter the building's massing and scale.

2. Procedural Impropriety: David Seagull and others cited Prescott Administrative Procedures 9.18.1, arguing that the council's March 2024 denial was final and should not be revisited as a "continuation of appeal." The correct process, they contended, was to require the applicant to file a new application, thereby triggering full administrative completeness review and preservation commission consideration. Instead, the applicant's rebuttal was routed directly to council, bypassing the PPC and allowing an "end run" around preservation oversight.

3. Market Saturation & Economic Harm: Rick Potok noted the city already has five downtown hotels (Venome, St. Michael, Hiaampa, others) with 60–70% peak occupancy. A sixth hotel would cannibalize business from existing properties without attracting additional visitors to Prescott The city should regulate the number and location of lodging to protect existing investments.

4. Construction Disruption & Parking: Ralph Rodardi and others raised concerns about the demolition and 12+ month construction timeline blocking Montezuma Street, forcing closure of the city's downtown parking garage, and disrupting holiday parades and events. Additionally, the applicant did not propose adequate parking solutions; one commercial real estate appraiser with 50 years' experience recommended requiring 50 additional parking spaces if the building footprint changed more than 15% (which it has).

5. Lack of Objective Design Standards: Opponents and Goldwater Institute attorney John Riches sparred over whether the city's historic preservation design guidelines are sufficiently "clear and unambiguous" per Arizona Permit Freedom Act (ARS 9-843). Opponents argued the guidelines reference subjective concepts (character, compatibility, mass, scale) drawn from National Park Service Secretary of Interior Standards for Historic Preservation, and those are sufficient. The Goldwater Institute countered that the guidelines are too vague to satisfy state law and expose the city to litigation.

6. Inadequate Analysis by Council: Multiple council members—Mononttoya, Furworth, Patrick Grady, Moore—noted they lacked detailed staff analysis of where the revised design conforms to and where it deviates from historic preservation standards. Voting without that data risked exposing the city to litigation and failed the public's need for transparent, informed decisions.

7. Special Use Permit Still Required: Councilman Moore and others emphasized that even if council approved the design, the applicant still must obtain a special use permit, which requires separate PPC and PNZ review and recommendations. The council's approval of the design does not guarantee a special use permit will be issued.

Most compelling arguments:

• Rick Spring (HPC Acting Chair): "Whiskey Row is the crown jewel of Prescott We have only one chance to get this right. If we don't get it right, we will not have whiskey row." He cited John Steinbeck's Grapes of Wrath and JFK to argue that preserving historical character is an investment in the community's future.

• Mel RP (experienced development consultant): Detailed observations that the design changes are not "major" in the context of historic preservation; most modifications are cosmetic. A truly compatible design would require a more modest, creative proposal that reflects the site's physical constraints and the community's wishes. The current design is "overscaled" and "overdesigned."

• David Seagull (attorney perspective): The council's March 2024 decision was final under city code. The applicant has no legal right to present an appeal without filing a new application and court suit. Allowing this continuation invites further circumvention of proper administrative procedures.

• Ted Gambogi (council pushback on emotion): Warned the council against being swayed by theatrical language like "keep Prescott" and slippery-slope arguments. The project is zoned for a hotel; the question is whether the design meets objective standards, not whether the council dislikes hotels. However, even he acknowledged the need for clarity on what "substantially compliant" means.

Organized groups: Historic Preservation Commission (official recommendation: reject continuation, refer to commission for review); Bradshaw Senior Living residents and Canyon Run residents (present for unrelated CDBG housing crisis testimony, but their displacement due to affordability pressures underscored council frustration with market-rate development priorities).

Support

Number of speakers in favor: 1 public speaker (Sandy Griffith).

Main arguments (supporter):

• The revised hotel project honors Whiskey Row's past while serving its future, ensuring the district remains vibrant and relevant for future generations. Prescott has always been a city of "charm, character, community and courage," and this project is consistent with that legacy.

Most compelling argument:

• Sandy Griffith's statement that she supports the hotel but also agrees that "any development in our historical area must honor the past while serving its future"—implicitly acknowledging the legitimacy of preservation concerns while arguing this project does so.

Project Details

• Case number: HP25-004 (Historic Preservation appeal).
• Applicant / developer: Jim Graassette (property owner), architect Doug Strow.
• Attorney: John Riches, Goldwater Institute (representing applicant).
• Location / address: 136–140 South Montezuma Street (Whiskey Row Historic Preservation District #1, Courthouse Plaza).
• APN: 109-02-014A.
• Current zoning → Proposed zoning: DTB (Downtown Business); remains DTB. Project also requires a Special Use Permit.
• Density / units / square footage: 47-room hotel (no residential units); four-story structure.
• Changes from previous version (if reconsideration):
  • Height reduced: Five stories (60 feet) → four stories; top of parapet at 43 feet 6 inches; maximum height including elevator overrun: 48 feet.
  • Rooftop terrace moved: Fifth-floor rooftop terrace → fourth-floor rooftop terrace.
  • Juliet balconies added: Middle of second and third stories to break up massing.
  • Sandstone freeze and banding removed: From front facade.
  • Window and entry reconfiguration: Redesigned ground-floor entries and storefront fenestration.

Vote Breakdown

• Final vote on postponement: 7-0 (unanimous).
• Yes: Mayor Good, Mayor Pro Tem Lois Fruhwirth, Councilwoman Mary Frederickson (Furworth), Ted Gambogi, Councilman Patrick Grady, Councilman Jay Ruby (Mononttoya), Councilman Moore.
• No: None.
• Abstentions / absences: None.

Note: The vote was on a motion by Ted Gambogi to schedule the item for August 5, 2025, at 3:00 p.m., not on the merits of the application itself.

Outcome & Next Steps

Decision: The council voted unanimously (7-0) to postpone all action on the Prescott Plaza Hotel appeal and scheduled a special emergency council meeting for August 5, 2025, at 3:00 p.m. to hear and deliberate on the matter anew.

Conditions and requirements for August 5 meeting:

1. Historic Preservation Specialist Analysis: Kaylee Nunees, the city's historic preservation specialist, will prepare a detailed written analysis comparing the revised design against the city's historic preservation design guidelines. The analysis must identify specific areas of conformance and non-conformance, not merely a summary statement that the design is "mostly in conformance."

2. Possible Historic Preservation Commission Review: The HPC will attempt to convene a special meeting before August 5 (the regular August PPC meeting is August 8, which falls after the council deadline) to review the revised plans and provide its professional recommendation to council. However, this is contingent on achieving quorum and scheduling feasibility. At minimum, Kaylee Nunees and HPC Acting Chair Rick Spring will report findings to council on August 5.

3. State Law Deadline: The applicant submitted the revised design on June 16, 2025. Under Arizona Permit Freedom Act (ARS 9-843), the city must take "action" on the application by August 15, 2025 (60 days from submission), or the application is deemed approved. The August 5 meeting is scheduled to meet this deadline. If council does not act on August 5, the applicant will submit a notice that the deadline has been missed, and the project is automatically approved unless the city files a declaratory judgment action challenging whether the continued postponement constitutes "action" under state law.

4. Special Use Permit Still Required: Even if the council approves the design on August 5, the applicant must still obtain a Special Use Permit. That process will include a courtesy review by the HPC, formal review and recommendation by the Planning & Zoning Commission, and final council approval.

What comes next:

• Staff prepares detailed conformance analysis by August 5.
• HPC may conduct a special meeting in late July or early August to review the revised design.
• Council reconvenes August 5 at 3:00 p.m. in a special session.
• Council votes to approve, deny, or impose conditions on the appeal.
• If approved, the applicant proceeds to Special Use Permit application and review (estimated 60–90 days, based on PNZ and council schedules).
• If denied, the applicant may file a court challenge under the Permit Freedom Act or pursue a new application with further design modifications.

Controversies & Context

Historic Preservation vs. Property Rights: The case encapsulates a fundamental tension between two competing principles. The Goldwater Institute and John Riches invoked Arizona's Permit Freedom Act (ARS 9-843) to argue that Prescott historic preservation design guidelines are unconstitutionally vague and infringe on private property rights. They framed the issue as a battle for the "rule of law" and clarity—developers and property owners deserve to know upfront whether a design meets the city's criteria, not face arbitrary denial based on subjective notions of compatibility.

Conversely, the Historic Preservation Commission, community members, and some council members argued that historic districts inherently require qualitative judgment about "character," "scale," "massing," and "compatibility." Those concepts are intentionally flexible to allow sensitive case-by-case review. They cited the National Park Service Secretary of Interior Standards for Historic Preservation, which are widely adopted by states and municipalities and are not vague in practice—they have been litigated and clarified over decades. To replace them with purely quantitative rules (e.g., height limits, setbacks, footprint ratios) would reduce the historic district to a formulaic exercise and expose Whiskey Row to generic development.

State Law Preemption Risk: The Permit Freedom Act (ARS 9-843) imposes a 60-day deadline and requires "clear and unambiguous" criteria. If the city does not act within 60 days, the application is deemed approved. Multiple council members expressed fear that if they deny the project, the applicant will sue, and the courts may side with the Goldwater Institute's argument that the city's guidelines are too vague. Even if the city wins, it will have spent tens of thousands of dollars in litigation and diverted attorney and planning resources. Given the political sensitivity and fiscal pressure, some council members (particularly Mayor Pro Tem) argued it is cheaper and safer to approve the project now than to fight in court later.

However, Mayor Good and others countered that approving a mediocre project to avoid litigation is poor policy and undermines community trust. They called for detailed staff analysis to ensure the decision is based on law and fact, not fear.

Procedural Disputes: David Seagull, a community member, and some opponents questioned whether the applicant had the legal right to resubmit the design for council consideration after the council had upheld the PPC's denial on March 26, 2024. According to Prescott Administrative Procedures 9.18.1, once an appeal is decided, it is final unless a new appeal is filed with a court within 30 days. The applicant did not file a court appeal; instead, it resubmitted a revised design. The city attorney and planning staff took the position that the substantial redesign warranted treating the resubmission as a "continuation of the appeal" rather than a new application. Opponents argued this was an improper circumvention of the administrative process and deprived the HPC of its right to review the revised design before it reached council.

The council ultimately sided with opponents, agreeing that the HPC should have the opportunity to review the revised design before council acts. This is a tacit acknowledgment that the applicant's attempt to bypass the HPC was procedurally questionable.

Historical Context: The Prescott Plaza Hotel has been the subject of public debate since 2022. The applicant, Jim Graassette, was reported to have said multiple times in prior meetings that the project was "his gift to the city" and that he was deeply committed to making it work. The HPC and council denied the original five-story design in 2023–2024. Rather than abandon the project, Graassette invested in a redesign (presumably at significant cost) and resubmitted. The council's recognition of this effort, and Mayor Pro Tem's acknowledgment that the applicant had indeed revised the plan after the council requested modifications, suggests a shifting tone toward accommodation. However, the public's concern that Whiskey Row's historic character is at stake remains unresolved.

Relation to Goldwater Institute's Broader Agenda: The Permit Freedom Act (ARS 9-843) is part of a national movement, championed by libertarian and property-rights organizations, to limit local land-use regulation. The law requires municipalities to base permits on "clear and unambiguous" criteria, theoretically to protect developers and property owners from arbitrary denial. However, critics argue it undermines local control and can expose historic districts and neighborhood-character protections to legal challenge. The fact that the Goldwater Institute (which carries Barry Goldwater's name and operates from Arizona) is directly litigating this issue signals that Arizona municipalities may face an increasing number of such challenges in the coming years.

Economic and Equity Concerns: Notably, the council meeting also included extensive public testimony on a separate crisis: the displacement of seniors from Bradshaw Senior Living and Canyon Run complexes as those facilities, built with HUD subsidies, reach the end of their 20-year affordability requirements and convert to market-rate pricing. Several residents described 10% annual rent increases on fixed incomes of $175–$200 per month, forcing homelessness. This context—aired just before the Whiskey Row discussion—highlighted a stark disparity: the city was devoting hours of legal and staff resources to a luxury hotel project while seniors faced housing crisis with limited CDBG resources (only $275,264 annually, allowing only three to six months of rental assistance per household). Councilman Moore sardonically suggested that if Graassette wanted to give a "gift to the city," he should build affordable housing instead. While that comment did not change the vote, it underscored the tension between property-rights arguments and community needs.

Duration

• Prescott Plaza Hotel item (HP25-004): Approximately 2 hours 15 minutes (from applicant presentation through postponement vote), including three hours of public comment and council deliberation.
• Total meeting: Approximately 4 hours 30 minutes (from opening invocation ~3:05 p.m. to adjournment ~7:35 p.m.), including consent agenda, liquor licenses, pavement and water/guardrail projects, CDBG Consolidated Plan, Senator Cottages subdivision, Prescott Plaza Hotel, and executive session on attorney-client privilege.

Other Notable Items

Senator Cottages Subdivision (Final Plat Approval – 7-0)

Lion Engineering presented a 37-unit residential subdivision on 11 acres at the old drive-in property off Senator Highway (APN 1110-06-002F, SF-9 zoning). Planning Manager Tammy Dwick confirmed substantial conformance with the preliminary plat. Public commenter Sue Tatar raised concerns about increased traffic on Senator Highway, which has become "increasingly dangerous" due to concurrent development (Yavapai College expansion, Groom Creek 30-unit project). She questioned whether traffic calming measures were planned. Applicant Scott Lion noted that the project includes a left-turn lane improvement on Senator Highway and a secondary emergency access (gated) to a neighboring subdivision. Council members Gambboji and Furworth acknowledged the cumulative traffic impact and asked city staff to request that the Planning, Building & Transportation Advisory Commission (PBTAC) conduct a traffic-calming study of Senator Highway. The final plat was approved 7-0. This illustrates ongoing tension between approving individual projects that are technically compliant with land-use code and addressing cumulative impacts on aging infrastructure.

2025–2029 Consolidated Plan & First-Year Annual Action Plan (Approved 6-1)

Michael McInness, Community Development Block Grant Coordinator, presented the five-year strategic plan for the city's $275,264 annual CDBG allocation (federal requirement). Public hearing included extensive testimony from seniors facing displacement at Bradshaw Senior Living and Canyon Run due to expiring HUD affordability restrictions and soaring market-rate rents. Residents described 10% annual increases on fixed incomes of $175–$200/month, creating homelessness risk. McInness acknowledged CDBG can fund rental assistance (three to six months under standard CDBG; up to one year under prior COVID funds) but that the program's limitations and the scale of the crisis make comprehensive solutions impossible within the current budget. Council discussed potential 30-year (rather than 20-year) affordability requirements for future projects, but the 20-year units (Bradshaw, Canyon Run) are not retroactively subject to new rules. Consolidated Plan approved 6-1 (one dissent, voter not clearly identified in transcript). The vote underscores council frustration with market-rate conversion of subsidized senior housing and the inadequacy of CDBG resources to address the crisis.

PFAS Remediation Study Contract with Dibble & Associates (Approved 7-0)

Utilities Manager Steve Ulers presented a contract with Dibble and Associates Consulting Engineers to study per- and polyfluoroalkyl substances (PFAS) contamination in Prescott municipal water system. Well 5 at the airport measures 15 parts per trillion (ppt), exceeding the EPA standard of 4 ppt. Other wells are compliant. The 48-week study will examine blending, treatment alternatives (granular activated carbon, ion exchange), and infrastructure layouts. Funded from prior PFAS settlement funds ($500K+), no general fund impact. Mayor Good noted the enormous market opportunity (approaching $1 trillion globally) in PFAS treatment and the risk of investing in now-archaic technology that will be obsolete in three years. The strategy is to focus on Well 5 while monitoring emerging technologies. Approved 7-0.

Pavement Preservation Program FY2026 – SR-89 & Prescott Lakes Parkway (Approved 7-0, Night Work Approved)

Public Works Director Janet Ramsey and Pavement Management Program Manager Greg Patrick presented a $494,000 project using government procurement alliance contracts. Highway 89: Yavapai connector to Willow Lake Road; Parkway: Highway 89 to Highway 69. Construction July–November (120 days). Stone matrix asphalt (durable, high-performance) on Highway 89; chip seal on Parkway. The project is part of the city's pavement management program, which targets midlife preservation to maximize return on investment and achieve a Pavement Condition Index (PCI) of 80 (currently 74–75). Councilwoman Furworth raised a concern: the Watson traffic circle (a point of recent study-session complaints) falls within the project scope. Why not redesign it while paving? Staff noted the circle redesign would occur 16+ months in the future and would be a separate project. The circle will be difficult to navigate during construction but is not included in the scope. Approved 7-0.

Bradshaw Drive Guardrail Installation (Approved 7-0)

Public Works Capital Program Manager Tim Sherwood presented a $494,444 contract with Hawk Contracting LLC (22% over engineer's estimate of $463,225, due to elevated steel, rebar, concrete costs). Bradshaw Drive is a minor collector between Goodwin Street and Jacob Lane. Kimley Horn roadside barrier analysis recommended guardrails on outside curves. School buses' rear wheels cross the center line on narrow shoulders; widening will prevent larger-vehicle tracking. ~45-day construction timeline. Councilman Moore asked why now (the road has existed 40–50 years); staff cited a traffic engineer recommendation and the Kimley Horn study. Approved 7-0.