Cave Creek unanimously rejects Meritage Homes' 56-unit rezoning bid, preserves rural character

Town Council Unanimously Rejects Meritage Homes Rezoning; Density and Rural Character Cited

On April 25, 2016, the Cave Creek Town Council voted 0-7 to deny Meritage Homes' application to rezone 12.2 acres from Desert Rural (DR89) to Commercial Buffer (CB) for a 56-unit residential development north of Carefree Highway and 54th Street. The vote capped an evening of contentious testimony, with 21 public speakers voicing overwhelming opposition to the project and concerns that it would fundamentally alter the town's rural character. The council's decision followed the Planning Commission's unanimous rejection of the same proposal weeks earlier.

Key Speeches

"Although we did not get their support we actually left the meeting feeling pretty good because there were a lot of very positive comments about the proposal." — Greg Davis, Irvine Consulting, representing Meritage Homes

Stephen Oral, a resident at 3421 North 54th Street directly north of the site, directly challenged this characterization:

"There are a number of people in this room who were at that commission hearing there was not any measurable positive support among any of the public that spoke. I think to say that there was simply not true." — Stephen Oral, North 54th Street resident and South 40 subdivision opponent

Council member Thomas McGuire expressed his position on zoning standards:

"I think if we want to consider a change in zoning we need a more definite plan on what is to be built." — Councilman Thomas McGuire

Mayor Vince Francia later invoked the town's founding identity, reading from his own written statement delivered by a resident:

"Cave Creek has an enviable lifestyle. Rural may be as dated as Norman Rockwell Saturday Evening Post cover but it is alive thriving and current in Cave Creek. Who didn't want to be a cowboy or a cowgirl when you were a kid? Our horses buck, our cowboys are real, authentic and when they speak they do so with a made in the USA drawl." — Mayor Vince Francia (prepared statement read into the record)

Timeline

• Applicant presentation: Greg Davis and Troy Hill (Meritage Homes) presented a conceptual site plan for 56 single-family homes at 4.6 units per acre on 12.2 acres. Davis emphasized Meritage Homes's reputation for energy-efficient homes, the project's minimal density relative to allowable commercial uses under the specific area plan (SAP), and proposed conditions: rezoning contingent on site plan conformance within one year or automatic reversion to DR89 zoning. Davis also stated the applicant would accept Multi-Residential (MR) zoning instead of Commercial Buffer if that resolved council concerns.

• Staff recommendation: Town staff reported the Planning Commission voted unanimously 0-7 to recommend denial; staff likewise recommended denial, advising council that the rezoning does not merit approval without a more definite plan.

• Public comment: 21 speakers; approximately 12 against, 9 for. Opponents included Stephen Oral (immediate neighbor, South 40 subdivision officer Lawrence Pace), Carrie Smith (presented housing market data showing Cave Creek median prices dropped from $787,000 in May 2014 to $424,000 in April 2015, with foreclosure rates twice that of Phoenix), Cheryl Kitchell (14-year resident citing SAP overlay status and neighborhood preservation), Linda (30-year Phoenix resident who witnessed similar rezoning-to-density transitions erode her previous neighborhood), Suzanne Dell (objected to zoning classification switch from MR to CB and concern about future commercial use), Kathy Green, and Art Robertson (noting most supporters were not local property owners). Supporters included Andrew Fowler (7-year resident), Steve Knot, Carl Lorenzo (also benefiting from elimination of adjacent equestrian nuisance), Tim Spence (North 53rd Street, seeking to eliminate horse ranch problems), Dennis Coleman (acknowledging equestrian nuisance—flies, manure, light pollution from Lowe's—but conflicted over density), and others. Notable: three residents (Coleman, Pace, Spence) acknowledged the existing horse ranch creates genuine nuisance problems (flies, manure, light pollution) and would welcome its elimination through development.

• Council discussion: Mayor Francia clarified that the motion before council was solely on rezoning to Commercial Buffer, not site plan approval. Councilman Ernie Bunch raised the discrepancy: had the applicant advertised MR originally, why switch to CB? Staff confirmed CB allows retail, office, and hotel uses beyond residential; MR restricts to residential only. Bunch moved to give first reading to the rezoning ordinance for discussion. Councilman McGuire stated he did not believe rezoning merited approval without a definite plan. Councilman Tim Clancy seconded the motion "for discussion only" and stated he opposed Commercial Buffer zoning. Councilman Joe Freedman expressed concern that the Specific Area Plan itself was inappropriate for these parcels and wanted to "make the best of a bad situation," but stated "definitely not" to Commercial Buffer rezoning. After brief remarks from Mayor Francia (reiterating his prepared statement on Cave Creek's rural identity), Vice Mayor Lamar Lively spoke of his 28-year residency and affection for Cave Creek's character, noting that despite the quality of the project, the proximity to Lowe's and the commercial buffer category opened the door to other uses he preferred to avoid. All seven council members voted no.

• Vote: 0-7 (all against). Individual votes: Councilman Ernie Bunch—no; Councilman Tim Clancy—no; Vice Mayor Lamar Lively—no; Councilman Thomas McGuire—no; Councilman Wayne Lipsky—no; Councilman Joe Freedman—no; Mayor Vince Francia—no.

Opposition

Number of speakers against: Approximately 12 of 21 speakers.

Main concerns:

1. Density incompatibility: 4.6 to 5 units per acre fundamentally contradicts Cave Creek's one-acre-or-greater lot character; Stephen Oral noted "nowhere else anywhere in the area where we have much more than one house per acre or acre and a half."

2. Rural character degradation: Multiple speakers (Kurt Manson, Suzanne Dell, Linda, Art Robertson) cited Cave Creek's Western, equestrian identity as a brand and tourist/quality-of-life draw; rezoning to CB and residential density would erode this identity permanently.

3. Commercial Buffer zoning opens door to undesired commercial uses: Suzanne Dell and others expressed concern that CB zoning allows retail, office, hotel, and other commercial uses beyond the residential project; if Meritage Homes's project fails or is resold, CB zoning invites incompatible commercial tenants (hotel, car dealership, etc.) directly adjacent to low-density neighborhoods.

4. Bait-and-switch on zoning designation: Cheryl Kitchell noted Meritage Homes originally advertised the project as MR zoning in marketing materials but officially requested CB, raising credibility concerns about the developer's intentions.

5. Precedent and cumulative effect: Stephen Oral warned that approving this rezoning would set a precedent for further density increases; Linda and Art Robertson cited their own experiences witnessing neighborhoods eroded by incremental zoning changes and density creep.

6. Market conditions do not support robust demand: Carrie Smith presented data showing Cave Creek's median home prices dropped from $787,000 (May 2014) to $424,000 (April 2015) and foreclosure rates twice that of Phoenix, suggesting Meritage Homes's market assumptions may be overstated and the project economically questionable.

7. Infrastructure and water capacity concerns: Carrie Smith raised questions about water capacity, noting the general plan appendix flagged infrastructure as "fragile" and in need of replacement; adding 112 residents could strain the Central Arizona Project line serving Cave Creek.

Most compelling arguments:

Stephen Oral's direct refutation of the applicant's claim of Planning Commission support had particular force; residents in the hearing room confirmed his characterization. Carrie Smith's housing market analysis (median price decline of 46% in one year) and foreclosure data challenged the developer's economic case and raised questions about Meritage Homes's knowledge of local conditions. Linda's personal narrative of her former Phoenix neighborhood's transformation through similar rezoning and density increases resonated as a cautionary tale. Suzanne Dell's concern about the open-ended nature of Commercial Buffer zoning—what happens if Meritage Homes sells the property or the project fails?—highlighted a structural vulnerability in the applicant's conditional-approval proposal.

Organized groups:

South 40 subdivision residents (Lawrence Pace representing property owners; members included Peterson, Cherry, Bowden, Lisenby, Gibson, Elder, Kors, Bruni), opposed unanimously.

Support

Number of speakers for: Approximately 9 of 21 speakers.

Main arguments:

1. Project quality and builder reputation: Andrew Fowler, Steve Knot, and Carl Lorenzo praised Meritage Homes as a high-quality builder with proven track record; Knot stated "I don't see how it impacts anyone" and expressed confidence in the company's commitment to the site plan.

2. Minimal traffic impact: Multiple supporters (Knot, Lorenzo) argued that the internal streets (53rd and 54th) form a U-turn loop serving only the development; no through-traffic to surrounding neighborhoods; Carefree Highway already carries traffic.

3. Housing diversity and community support: Andrew Fowler argued the specific area plan contemplated this zoning; Meritage Homes's offer of conditional approval (site plan conformance within one year or reversion to DR89) addressed neighbors' concerns about bait-and-switch.

4. Elimination of existing equestrian nuisance: Three property owners adjacent to or near the existing horse ranch (Tim Spence, Dennis Coleman, Lawrence Pace, Carl Lorenzo) testified that the ranch produces severe nuisance: flies, manure, light pollution, dust. Spence and Lorenzo stated they have endured complaints from neighbors for years; residential development would resolve the nuisance while supporting local restaurants and retail. Lawrence Pace (though speaking for the South 40 opposition) acknowledged the existing equestrian problems; Tim Spence and Carl Lorenzo argued development is the lesser evil.

5. Economic benefit to cash-strapped town: Carl Lorenzo and another speaker emphasized Cave Creek is "in debt" and needs development to support restaurants, schools, and town services; 56 new families would generate sales tax and impact fees to help the town achieve fiscal stability.

6. Specific area plan alignment: Andrew Fowler and Greg Davis argued the SAP was designed precisely to contemplate this kind of transitional zoning between high-intensity commercial (Lowe's to the east) and low-intensity residential (to the north and west).

Most compelling arguments:

The equestrian nuisance argument had surprising rhetorical force: residents who had endured decades of flies, manure odor, light pollution, and dust from the existing horse ranch testified that residential development, while increasing density, would eliminate a genuine quality-of-life problem. Carl Lorenzo's appeal to town financial hardship and the need to support local business owners (whom he claimed to have interviewed) resonated as a pragmatic counterweight to abstract rural-character arguments.

Organized groups:

None formally identified, though Cactus Shadows High School Mountain Bike Team was later mentioned in connection with the separate Gateway Trail head resolution.

Project Details

• Case number: Ordinance 2016-01

• Applicant / developer: Meritage Homes (Arizona-based, headquarters in Scottsdale, established 1985; known for energy-efficient homes with spray insulation, rain-sensor irrigation, and other efficiency innovations)

• Attorney / representative: Greg Davis, Irvine Consulting; Troy Hill, Meritage Homes (also present for applicant)

• Location / address: Approximately 12.2 acres located about one mile north of Carefree Highway and about one-quarter mile west of Cave Creek Road, just north of the northwest corner of Carefree Highway and 54th Street. Immediately east of Lowe's; future commercial (McDonald's, retail) to the south; low-density residential to the north and west.

• APN (if stated): Parcels 016a and 21-47100 (as stated in ordinance caption)

• Current zoning → Proposed zoning: Desert Rural (DR89) with Specific Area Plan (SAP) overlay → Commercial Buffer (CB). Applicant later stated willingness to accept Multi-Residential (MR) designation instead.

• Density / units / square footage: 56 single-family homes on 12.2 acres = 4.6 units per acre. Home sizes designed at 1,700 to 2,700 square feet. Mixed front/side-entry garages. Open-space courtyard design with shared amenities (pool, clubhouse, community center). Trail connections to north (existing Water Ranch trail), west (pedestrian trail to west properties), and south (connection to future retail area).

• Changes from previous version (if reconsideration): Not applicable; this was initial application. However, applicant did modify its position during the hearing process: originally advertised project as MR zoning (per Suzanne Dell's testimony), but officially requested CB zoning upon approach to town (citing SAP overlay). During the council hearing, applicant offered to accept MR designation if council preferred, and offered conditional approval: rezoning would be contingent on submission of conforming site plan within one year; failure to submit would allow council to direct staff to revert zoning to DR89.

Vote Breakdown

• Final: 0-7 (unanimous denial)

• Yes: None

• No: Councilman Ernie Bunch, Councilman Tim Clancy, Vice Mayor Lamar Lively, Councilman Thomas McGuire, Councilman Wayne Lipsky, Councilman Joe Freedman, Mayor Vince Francia

• Abstentions / absences: None

Outcome & Next Steps

The rezoning application was denied unanimously. The applicant requested and was granted a continuance to April 18, 2016 (a later council meeting), presumably to allow time for regroup or revised proposal, though the transcript does not specify terms. No conditions or pathway to approval was established; council's position was that the rezoning itself—not site plan details—was incompatible with town character and policy. The property remains zoned DR89.

Controversies & Context

Planning Commission reception dispute: Greg Davis testified that although the Planning Commission did not approve the application, Meritage Homes "actually left the meeting feeling pretty good because there were a lot of very positive comments about the proposal." Stephen Oral, a resident present at that hearing, directly refuted this, stating "there was not any measurable positive support among any of the public that spoke. I think to say that there was simply not true." Multiple residents in the council chamber confirmed Oral's characterization. This credibility clash undermined the applicant's claim of broader acceptance.

Zoning classification bait-and-switch: Suzanne Dell noted that Meritage Homes's original marketing materials listed the project as seeking MR zoning, but the official application requested CB. When asked why, Greg Davis explained that the SAP overlay prescribed CB zoning for the area and that Meritage Homes had only recently learned it could pursue MR instead. Council members (particularly Ernie Bunch) expressed frustration at the inconsistency. The distinction matters: CB allows retail, office, hotel, and assisted-living uses; MR restricts to residential only. Dell and others worried that CB zoning, once approved, would invite future commercial uses unrelated to Meritage Homes's project if the developer sold the property or the housing market changed.

Equestrian nuisance vs. development trade-off: A surprising tension emerged among neighbors. While Lawrence Pace (South 40 subdivision president) and his neighbors unanimously opposed the rezoning, three property owners immediately adjacent to the existing horse ranch (Tim Spence, Dennis Coleman, Carl Lorenzo) acknowledged enduring years of flies, manure odor, light pollution, and dust from the equestrian operation. Spence and Lorenzo argued that residential development would eliminate these nuisances and support local restaurants and town finances, effectively suggesting that accepting higher density was preferable to living with ranch-generated pollution indefinitely. This divide—between neighbors far enough away to prioritize rural character and those adjacent to the ranch who experience the nuisance firsthand—highlighted a moral and practical tension that did not, however, sway the council's decision.

Market viability questioned: Carrie Smith presented detailed housing market data showing Cave Creek median home prices had collapsed from $787,000 in May 2014 to $424,000 in April 2015 (a 46% decline in one year), with foreclosure rates twice that of Phoenix and nearly double the national average. She questioned whether Meritage Homes possessed market knowledge that justified a 56-unit project in a declining market and whether the builder's economics truly required exactly 56 units or whether the number was inflated to maximize profit. Greg Davis responded that 56 was "the minimum number that we feel that comfortable that we can move forward with" but acknowledged he could not guarantee that losing one or two units would not kill the project. Smith's data—presented as current ("this afternoon from zero")—suggested Meritage Homes's assumptions were out of touch with market conditions.

Infrastructure fragility: Carrie Smith also raised concerns about water capacity, noting that the general plan appendix flagged infrastructure as "fragile" and in need of replacement. Adding 112 new residents (at 2.3 people per household) would require verification that the Central Arizona Project water line serving Cave Creek had adequate capacity. This concern was noted but not resolved in council discussion.

Specific Area Plan controversy: Multiple residents (Cheryl Kitchell, Linda, Stephen Oral) questioned whether the SAP itself—which prescribed CB zoning for this area—was appropriate or had been imposed under duress. Cheryl Kitchell stated, "I know you're sick of hearing the SAP and I've been told never to bring it up again can't help it is an overlay it is a plan it is not a zoning change." She and others suggested that the original SAP may have been the result of a previous property owner's litigation threat and was therefore not a valid guide for future decisions. The council did not directly address this, but Councilman Joe Freedman did state: "I thought the SAP was entirely inappropriate for these parcels and uh but it is what it is so my goal now and in the future would be to make the best of a bad situation."

Communication breakdown with Desert Community Association (separate item): Earlier in the meeting, council approved a one-year waiver of the $3 per-ticket facility fee for the Desert Community Association's rodeo event due to what town staff acknowledged was a "miscommunication" regarding the applicability of a new fee policy. Council instructed that all future communications be in writing to avoid recurrence. This separate item was noted as a signal that the town had internal communication problems and should be wary of conditions tied to future submissions (a possible subtext of the conditional-approval debate on Meritage Homes's application).

Duration

• This item (Meritage Homes rezoning, including public hearing and council discussion): Approximately 90 minutes (from start of staff presentation through final vote, including five-minute recess)

• Total meeting: Approximately 2.5 hours (four substantive agenda items: Meritage Homes rezoning, consent minutes with reconsideration, Desert Foothills Mountain Bike Association resolution, Desert Community Association fee waiver; public announcements, recognition of volunteers, and procedural time also included)

Other notable items (brief)

Desert Foothills Mountain Bike Association Gateway Trail head grant support (Resolution R2016-08): Council unanimously approved directing the town manager to support the DMBA's $7,500 REI grant application for phase one development of a Gateway Trail head and parking area near Water Ranch. The project connects approximately 100 miles of regional trails with about 50 miles of Cave Creek trails; no town financial commitment required, only staff time. Young members of the Cactus Shadows High School Mountain Bike Team spoke in favor, emphasizing the trail's importance to their training.

Desert Community Association rodeo facility fee waiver (Resolution R2016-07): Council unanimously approved a one-year waiver of the $3 per-ticket facility fee for the Desert Community Association's April 2016 rodeo event. Staff acknowledged poor communication regarding the new fee policy's applicability; council instructed that all future communications with event organizers be in writing to prevent recurrence.