Scottsdale Consults Legal Counsel on State Housing Legislation and Axon Referendum Challenge

Scottsdale Council Enters Executive Session on State Housing Law and Axon Referendum

On May 20, 2025, Scottsdale City Council convened a brief special meeting before moving immediately into executive session to consult with city attorneys on two intersecting legal challenges: the implications of newly enacted state housing and zoning legislation, particularly Senate Bill 1543, and a pending referendum against the previously approved Axon development near the 101 and Hayden Road intersection. The unanimous motion to close the meeting for legal advice underscores mounting pressure on municipal zoning authority from state preemption and grassroots opposition to a major approved project.

Session Details

All seven council members were present: Mayor Lisa Borowsky, Vice Mayor Jan Dubauskas, and Barry Graham, Adam Kwasman, Kathy Littlefield, Maryann McAllen, and Solange Whitehead Manager Greg Kaitton and City Attorney Sher Scott also attended. The meeting lasted only minutes in open session before the council voted unanimously to adjourn to executive session.

Stated Purposes

The council motion, read by Lisa Borowsky, identified four specific legal consultation objectives:

1. To discuss and consult with city attorneys and representatives regarding position and instruction on Senate Bill 1543 and related recently enacted state legislation.

2. To address legal advice concerning Axon's previously approved zoning case and development agreement for property near the 101 and Hayden Road intersection.

3. To consider the pending referendum regarding the same Axon zoning case and development agreement.

4. To consult on legal advice related to recent state housing and zoning regulation legislation, including impacts to the city's single-family and multifamily residential land uses, related zoning code regulations, policy documents likely to be affected, and the city's potential policy and legislative response options.

No substantive discussion occurred in open session. The motion received no opposition and no debate.

The Dual Pressure: State Preemption and Local Referendum

The simultaneous mention of state legislation and the Axon referendum in a single executive session highlights a critical tension in Arizona municipal governance. Senate Bill 1543, enacted in the 2024-2025 legislative session, imposes state-level constraints on local zoning discretion, particularly regarding residential density, single-family zoning, and multifamily housing requirements. Cities must now reconcile preemptive state mandates—which may require increased density and reduced single-family exclusivity—with local opposition movements that use referendum power to challenge approved developments.

The Axon project, already approved at the zoning and development agreement stage, now faces a referendum petition from community opposition. A successful referendum would place the zoning decision on the ballot for voter approval or rejection. This procedural threat, combined with state-mandated zoning code revisions, creates a legal and political minefield: the city may be required by state law to approve more density and mixed-use housing, yet local voters may reject individual projects or demand a reversion to single-family zoning patterns.

The executive session suggests the city attorney and council are preparing for multiple scenarios: defending the previously approved Axon case if the referendum proceeds to a ballot measure, amending zoning code to comply with state legislation while managing political fallout, and clarifying the city's legal obligations and liabilities under both state and local law.

No Public Comment; No Open Debate

The special meeting format—convened solely to enter executive session—precluded public comment or council debate. No speakers opposed or supported the motion. No council member voiced concerns or dissent. The vote was unanimous and immediate.

This procedural closure reflects the confidential nature of attorney-client privileged discussions. However, it also means the public record contains no narrative of council member concerns, legislative intent, or strategic direction. The city's legal vulnerabilities, negotiating positions, and policy options remain sealed.

Senate Bill 1543 and State Zoning Preemption

SB 1543 is part of Arizona's broader 2024-2025 housing-policy shift toward state mandates on local zoning. The statute constrains municipal authority to:

• Require minimum lot sizes for single-family residential.
• Prohibit duplexes, triplexes, and fourplexes in single-family zones.
• Impose restrictions on multifamily housing density.
• Maintain overly restrictive parking requirements that discourage housing development.

Cities must now revise their zoning codes to comply, or face legal challenges and state attorney general intervention. Scottsdale's mention of reviewing "single family and multifamily residential land uses" and "related zoning code regulations" confirms the city is undertaking a comprehensive audit of its municipal code for state-preemption compliance.

This is a resource-intensive, contentious process. It often requires hiring outside counsel (Arizona cities frequently retain Withey Morris, PLC; Pew & Lake, PLC; or Gallagher & Kennedy, P.A. for such work), engaging planning staff, holding stakeholder meetings, and drafting amendments. It also invites local pushback from neighborhood preservation groups and single-family zoning advocates who view state preemption as a threat to community character.

The Axon Project Context

The Axon development near the 101 and Hayden Road intersection was previously approved by the city through a rezoning decision and execution of a development agreement. Project-specific details—size, density, use type, timeline—were not disclosed in this brief open session. However, the referendum threat indicates community opposition organized enough to gather petition signatures and trigger a voter-approval requirement.

In Arizona, a referendum on a zoning decision or development agreement requires proponents to submit a petition signed by registered voters equal to at least 10% of the city's registered voter count within 30 days of the decision. If successful, the approved matter goes to the ballot in the next election cycle. Voters then vote yes or no on the approved zoning or agreement.

The Axon referendum's legal status—whether petitions were submitted, verified, and certified—was not stated in the open session record. The executive session likely included discussion of:

• Verification status of the referendum petition.
• Timeline to a ballot measure.
• City's legal position if the referendum is upheld and sent to the ballot.
• Risk of reversal (if voters reject the approved zoning).
• Feasibility of defending the approval in public advocacy or media campaigns.
• Potential settlement or modification of the project to defuse opposition.

City Attorney Sher Scott's Role

City Attorney Sher Scott is the primary in-house counsel. Her presence in the executive session, along with the reference to "city's attorneys and representatives," suggests the city may also have retained outside counsel or intends to do so. Arizona municipalities frequently hire specialized land-use firms—such as Withey Morris, PLC or Pew & Lake, PLC—for complex zoning and state-preemption work, particularly when a city faces dual risks of state-mandate litigation and local referendum challenges.

The agenda's explicit reference to "discuss and consult with the city's attorneys" (plural) hints at multi-counsel involvement, though no outside firm name appeared in the open session.

Procedural and Political Implications

This executive session signals several strategic moves:

1. Proactive Compliance: The city is not waiting for state attorney general pressure or private litigation. It is self-initiating a legal review of state-preemption compliance.

2. Risk Mitigation: By consulting counsel on the Axon referendum before public debate, the city is identifying legal exposure early.

3. Policy Preparation: The reference to reviewing "policy documents likely to be impacted" and the city's "potential response" suggests the council is preparing for comprehensive zoning code amendments, possibly a formal adoption of new single-family and multifamily policies.

4. Electoral Consideration: Holding the meeting in executive session avoids public and media documentation of internal disagreements or hesitations. If council members were divided on whether Axon was a good project, or whether the city should fight the referendum or negotiate, those tensions remain private.

Timeline and Next Steps

The transcript does not state a scheduled return to open session, a date for future council discussion, or a timeline for submitting revised zoning code to the state or public. However, state-preemption deadlines (if any) would likely drive the pace. If SB 1543 includes a compliance deadline, the city must work within that window.

For the Axon referendum specifically, the next public milestone would be either:

• Certification of the referendum petition (if the city clerk verifies sufficient signatures), triggering a ballot measure date.
• Dismissal of the petition (if the city clerk determines insufficient signatures or procedural defects), allowing the approved zoning to proceed without a voter override.
• Negotiated modification or withdrawal of the project, if the developer and city reach a compromise.

None of these outcomes was previewed in the open session.

Absence of Public Engagement

A notable absence from the meeting record is any mention of community input, planning commission consultation, or public hearing on the state-preemption implications. The executive session format, appropriate for attorney-client privilege, nonetheless deprives the public of transparency on how the city is responding to state mandates that will reshape Scottsdale's zoning landscape.

Typical zoning code revisions include planning commission hearings and public comment periods. If Scottsdale intends to amend its single-family and multifamily zoning regulations, those public processes remain ahead. However, the council's preliminary legal strategy, internal concerns, and political calculus will remain sealed.

Conclusion

Scottsdale's May 20, 2025 executive session captures a moment of acute legal and political stress. State legislation is removing municipal zoning authority. Local opposition is threatening to overturn an approved development via referendum. The city must navigate both constraints simultaneously: complying with state mandates while respecting (or managing) local referendum power and community opposition.

The unanimity of the vote to enter executive session masks what may be significant internal disagreement on Axon, zoning philosophy, or state-compliance strategy. Those discussions will occur behind closed doors. The public will learn of the outcomes only when the city council takes action in open session: either proposing zoning code amendments, deciding to defend or abandon the Axon project, or negotiating a settlement.

The meeting lasted only minutes in public view. Its consequences will unfold over months.

Vote Summary

• Motion: Enter executive session for legal consultation on state legislation and Axon referendum.
• Vote: Unanimous (7-0).
• Outcome: Executive session convened; no public record of discussion or decisions.

Attendees

• Mayor Lisa Borowsky
• Vice Mayor Jan Dubauskas
• Councilman Barry Graham
• Councilman Adam Kwasman
• Councilwoman Kathy Littlefield
• Councilwoman Maryann McAllen
• Councilwoman Solange Whitehead
• City Manager Greg Kaitton
• City Attorney Sher Scott
• City Treasurer Sonia Andrews
• City Clerk Ben Lane

Duration

The open session lasted approximately 3–4 minutes. The duration of the executive session was not stated in the transcript.