Fountain Hills unanimously approves Toll Brothers' 235-unit Adero Canyon Phase 2 development
FOUNTAIN HILLS, ARIZONA — February 7, 2018

Fountain Hills unanimously approves Toll Brothers' 235-unit Adero Canyon Phase 2 development

Council unanimously approved Toll Brothers' Adero Canyon Phase 2 development (235 units with increased open space preservation) and a resolution calling for increased Arizona education funding and teacher salaries, while opposing state legislation that would deregulate home-based businesses.

Fountain Hills Council Clears Toll Brothers' Adero Canyon Phase 2 with Unanimous Votes; Passes Forceful Education-Funding Resolution

Fountain Hills Town Council moved swiftly through a long agenda on February 7, 2018, approving the Toll Brothers Adero Canyon Phase 2 residential development unanimously while devoting substantial meeting time to a newly crafted resolution calling for Arizona to dramatically increase education funding and teacher salaries. The body also took a hard stance against pending state legislation that would strip local zoning authority over home-based businesses, with Town Manager Grady calling the bills "draconian."

The meeting, held at Town of Fountain Hills Council Chambers, resulted in zero votes of dissent across all major items. Yet the education-funding resolution revealed meaningful council division over strategy—some members pushing for quantified spending targets, others warning that specifics would fracture the broad coalition the resolution aimed to build across Arizona municipalities.

Adero Canyon Phase 2: Development Overview and Approval

The Toll Brothers application, spanning Items 14–19 on the agenda, involved multiple resolutions, a rezoning ordinance, a preliminary master plat, and cut-and-fill waivers for a 226-acre residential project located at 13300 North Eagle Ridge Drive in the Adero Canyon master-planned community.

Project Details:

Changes from previous version: The December 2017 general plan amendment (not before council on this night) authorized density transfers that underpin this phase-2 proposal. Toll Brothers is shifting from a mix of custom single-family hillside lots and up to 120 apartments or hotel rooms (phase one, in partnership with Copperwind) to townhouses and semi-custom single-family homes positioned lower in the canyon, with significantly more dedicated open-space preservation.

Key Speeches

"We are very excited to finally be here. This has been quite a monumental effort. We are extremely grateful for your town staff—really your entire town staff, from Grady through Bob through Randy—through the town attorney. Everybody really helped us continue to push this ball to get here this evening." — Wendy Riddell, Attorney on behalf of Toll Brothers

"We think this is a very good proposal for Fountain Hills. We think this provides an opportunity to diversify the kind of housing stock that is here in Fountain Hills from an award-winning home builder. We also think it's a great opportunity to preserve the scenic views, to increase the contiguous open space, and orient the homes lower down in the canyon." — Wendy Riddell

"I am not aware of anyone, any opposition to this whatsoever, and with that we respectfully request your approval." — Wendy Riddell

Timeline

Project Details (Expanded)

Settlement Agreement and Master Developer Transition:
Current settlement agreement between the Town and MCO Properties governs both Darrell Canyon and Eagles Nest properties. The second amendment to the Final Settlement Agreement divides rights and responsibilities: the Adero Canyon Phase II Development Agreement will address Darrell Canyon; the amended settlement will address Eagles Nest. According to Bob Rogers, the "rights and responsibilities of the developer and the town haven't been changed by these agreements; the division is just one settlement agreement being separated into two agreements according to which development they relate to."

Cut-and-Fill Waivers:
Toll Brothers' proposed grading plan requires substantial cut (excavation) and fill (placement) to create level building pads and usable rear yards. Cut areas max out at approximately 29 feet along rear property lines. Fill waivers, primarily at right-of-way and wash crossings, reach 20–30 feet. Planning and Zoning Commission and staff both recommended approval of these waivers as necessary for the proposed preliminary plat to be developed as designed.

Open Space Commitment:
One of Toll Brothers' key selling points: Parcels 9 and 10, roughly 40+ acres, are being reserved entirely as open space and will not be developed. Rogers stated these parcels are "not included in this plat" and "will not be developed at all." Wendy Riddell emphasized "significantly more dedicated, preserved open space" compared to the previous 238-unit plan, and described the development as an opportunity to "preserve scenic views [and] increase the contiguous open space."

Other Parties Mentioned:

Vote Breakdown

Outcome & Next Steps

Toll Brothers received entitlements to proceed with design and permitting. The project is expected to begin construction following the company's purchase of the property from MCO Properties. Town staff and council indicated the entitlement process has been substantially completed; no continuance or further approvals were noted as required. The developer indicated earlier in the call-to-the-public segment (see below) that phase-2 development would follow completion of phase-1 construction, expected for May–June 2018.

During the call-to-the-public, Bart Shea, developer of the downtown Park Place project, publicly thanked Mayor Cavanaugh, Vice Mayor Brown, and Councilman Yates for "hard work through this last development agreement" over four years of negotiation. Shea highlighted the project's scope: $70 million in downtown investment, $5 million in infrastructure contributions from the developer to the town at no cost, and a reduction in the residential component from 72 to 30 units in phase-2 planning. He acknowledged "a lot of collateral damage, a lot of hard feelings, both sides" during the negotiation process but concluded with appreciation for the council's and staff's efforts. The rental office was fully operational, and first residents were scheduled to move in the weekend following the meeting.

Arizona Education Funding Crisis Resolution: Debate Over Strength and Strategy

The second major item commanding council attention was Councilman Magazine's Resolution 2018-14, expressing serious concern about Arizona's education funding levels and teacher salaries, and calling upon every Arizona municipality to adopt similar resolutions. The resolution passed unanimously, but only after a revealing debate in which Vice Mayor Brown and Councilman Yates pushed for "more teeth"—specific spending targets or mandates—while others cautioned that precision would fracture the coalition.

Key Speeches

"Starting salaries are in the 20s, 30s—well, okay, whatever it is, it's terrible. How can we get the best and the brightest and how can we keep them here? How long will they stay?… I had a woman approach me who told me that she had been teaching here for 20 years and she was being paid somewhere in the 40s, and after teaching all day, what did she do? She went to her second job." — Councilman Allen Magazine

"I am here to read a letter on behalf of another resident in town who could not make it tonight… Arizona's public schools are in a funding crisis… If fountain hills town council takes the lead and invites other municipalities to stand for public schools, it shows forward thinking initiative and encourages inclusivity of all cities and towns to stand as one." — Vicki Dirksen, reading a letter from Beth Simek, President of the Arizona Parent Teacher Association

"My last four years [as superintendent] were spent going to teachers and saying, 'Due to budget cuts we don't have your position for next year.'… Your job as council members is really pretty simple—it's just not easy. You have to have the vision to determine what is in the best interest of building the community, and you have to take into consideration the voices of the people." — Tom Lindsay, retired educator and former superintendent in Queen Creek

"Our state's bottom-ranking per-pupil funding and teacher pay is detrimental to businesses and our economy… perhaps if our town council and other town and city leaders express their concerns regarding Arizona's inadequate education funding and teacher shortage that has reached crisis level, maybe our state's leadership will have no choice but to increase funding and teacher pay." — Denise Weinrich

"My son is a high school senior… his applications are being compared to applicants from across the nation… their teachers were paid ten thousand, twenty thousand dollars [more]… I think we're expecting too much and giving too little." — Denise Weinrich

"I taught many years in California… Never was the consideration of the individual student as big as it is here… If the kids needed a particular class but only four signed up, a teacher will step up and offer that in addition to an existing class… so that the students get the individual care… and you see when they graduate they do extremely well." — Edith Stock, School Board Member

"Public education is the backbone of what made America a leader amongst industrial nations. We now rank 17th in the world in education… Tech jobs go unfilled because teacher jobs go unfilled… Tesla batteries, Amazon headquarters, new and emerging markets are going elsewhere for lack of a qualified workforce… The teachers need us. They can't afford lobbyists either, nor do they have the time." — Nicole Perkins, PTO President, Fountain Hills School District

Timeline

Opposition to the Resolution

None formally registered. Two speakers submitted statements of support without oral testimony. No council member voted against. No public speaker opposed.

Support for the Resolution

Number of speakers: Seven public speakers, all favorable.

Main themes (in order of frequency):

  1. Teacher pay crisis: Multiple speakers (Lindsay, Weinrich, Perkins, Stock) highlighted the inadequacy of Arizona teacher salaries compared to other states and the national average.
  2. Teacher retention and recruitment: Lindsay and Perkins emphasized difficulty attracting and retaining quality educators; Weinrich noted that her college-bound son is applying out of state, partly due to education system quality.
  3. Economic impact: Perkins and Yates (during council discussion) cited tech companies, Tesla, Amazon, and other employers considering Arizona—and leaving—based on workforce capability, which depends on education quality.
  4. Individual student care: Stock praised the Fountain Hills school district for its personalized attention to students, contrasting it with her experience in a large California district.
  5. State budget mechanics: Lindsay and Magazine cautioned that the governor's budget, while containing education funding proposals, does not guarantee legislative approval or passage at the level needed.
  6. Constitutional obligations: Weinrich noted ongoing lawsuits forcing the state to "keep up with constitutional demands" and maintain education spending consistent with inflation.
  7. Anti-voucher/anti-ESA sentiment: Perkins and Weinrich opposed education savings accounts (ESAs) and universal vouchers as a diversion of public funds; Stock advocated for alternative revenue streams (e.g., excise taxes on power exports) to fund schools without raiding the general fund.

Most compelling arguments:

Organized groups:

Council Discussion: The Debate Over Specificity

The resolution text, as read by the clerk, made sweeping statements about education funding shortfalls but stopped short of demanding a specific percentage increase or endorsing/rejecting the governor's budget. This prompted Vice Mayor Brown and Councilman Yates to advocate for amendments.

Councilman Yates' position:

"I'm wondering if your resolution could have more teeth in it to say, instead of just pointing out the problem, that we specify we want a one percent increase, a five percent increase… I was hoping you were going to go for the jugular and say, like Edith pointed out, 'Hey, let's get an excise tax or something like that.'"

Yates clarified that he supports the resolution's underlying message but wanted to know whether Magazine would consider an amendment adding specificity before the vote.

Vice Mayor Brown's position:

"I have to agree that if we were to put a little more backbone in it… I think if we aren't asking for something or saying this is what we need, along with the resolution, I think we are missing the ball… I think you're it's okay. I like the idea. I commend you for doing it, but I think we need to give just a little more thought and put some more requests or some more strength in it."

Brown suggested postponing the vote to allow time for a work-study session or special meeting to craft stronger language.

Councilman Magazine's response: Magazine acknowledged the tension. He noted that the governor's budget, while proposing education increases, "is broken down into a pupil funding [component] and teacher salary [component]," and he was unsure how to specify a "percentage above that" without inadvertently setting a ceiling lower than what the governor had already proposed. He also worried that precision would "shortchange" the effort:

"I certainly would consider any amendment that would increase the amounts. I don't want to shortchange them or us by saying one percent, two percent. I'd like to see 15 or 20, but it's not going to happen, and so I just think it gets a little dicey if we start to narrow down specifically what it is we want."

Councilman Leger's position (supporting Magazine):

"I think as the resolution stands, it makes sense… to vote on and move us forward as presented. It's clear that the underlying theme is to make education funding a top priority, and I think that's the message that we want to share with the legislators… in terms of the microdynamics of how they move through that, I think that's a different scenario."

Councilman Tolis' clinching argument:

"Now he said mention that we're going out and asking other municipalities to sign on to this. I think it's specific enough that I think we could get 100 percent support for it, but I worry that if we put anything else into it or start to put maybe something more personal for our needs, we're not going to get other municipalities to sign on for it… we're going to get into discussion around that, and I think we lose the impact and the message."

Final vote: Magazine moved approval of the resolution "as read," and the council voted unanimously to adopt it without amendment.

Outcome & Next Steps

Resolution 2018-14 passed unanimously. Town Manager Grady directed staff to send the resolution to all Arizona state legislators and all Arizona municipalities, accompanied by a cover letter highlighting that the Fountain Hills Town Council voted unanimously to adopt it and encouraging other communities to take similar action. The resolution was also to be sent to Governor Ducey's office.

Legislative Opposition: Home-Based Business Deregulation and Other Bills

The final major item on the agenda involved discussion of pending state legislation, during which Town Manager Grady and council members expressed vociferous opposition to bills that would strip local zoning authority and deregulate home-based businesses.

Legislation Under Review

HB 2116 ("Limitation of Actions and Dedicated Property"):
This bill would limit a developer's liability on a project that received a permit from a city or town to eight years from the date of substantial completion. Grady noted that the Home Builders Association of Central Arizona supports the bill, as it shifts liability away from builders and toward municipalities after the eight-year window. Grady warned that contractors' use of substandard materials or faulty construction methods could surface after the deadline, leaving the town liable for remediation and affecting the town's insurance trust participation.

HB 2333 ("Home-Based Businesses and Local Regulations"):
Grady described this bill as "draconian." It would deregulate home-based businesses and supersede local zoning ordinances. Under the proposed law, homeowners could establish auto-mechanic shops, manufacturing operations, and other intensive uses in residential neighborhoods without town approval, overriding Fountain Hills' zoning code.

SB 1002 and SB 1175 (Home-Based Business Variants):
Both bills, sponsored by Senator Farnsworth, mirror or closely resemble HB 2333. SB 1175 was specifically noted as allowing auto-mechanic work and manufacturing in homes.

Council Discussion and Vote

Grady opened with staff's position: strong opposition to all bills, particularly HB 2333 and its variants.

Councilman Magazine (supporting staff):

"What I find interesting about both of these bills, in the number of years I've been on council, is the first time staff has actually stepped up and stated how draconian, particularly the home-based business [bill]… I would definitely be opposed to both these bills and support the league in that regard."

Councilman Yates:

"The home-based businesses one, to me, is an absolute disaster, and I wish there were more that we can do than just vote opposition to it… I can't even imagine us having to work with that kind of a change."

Yates emphasized the need for individual council members to contact their legislators serving on the committees where the bills will be heard—a point he underscored by noting he had already "spoken to mine" regarding HB 2333 because one of his state representatives sits on the Government Committee.

Councilman Leger (supporting targeted opposition): Leger recommended council members contact legislators directly, as it "means a lot to just vote together with this."

Councilman Tolis (strategic framing): Tolis reframed opposition as part of a broader effort to protect local quality of life and zoning authority, noting that the bills represent state preemption of municipal control.

Vote

Councilman Magazine moved that the Town of Fountain Hills send letters of opposition to legislators regarding:

The motion was seconded. The council voted unanimously in favor (7-0). Individual votes not stated in transcript.

Outcome & Next Steps

Town Manager Grady confirmed that staff would send letters of opposition to all state legislators, copy all Arizona municipalities, and send a copy to Governor Ducey's office. Grady also noted that the League of Arizona Cities and Towns is conducting negotiations on some bills, but Grady stated his position as total opposition to HB 2333 and its variants.

The council also unanimously approved a 12-item consent agenda (7-0), including:

All items passed unanimously.

Other Recognition Items

Lieutenant Christian Deaver Introduction:
Captain Brandon Martin introduced newly assigned Lieutenant Christian Deaver, formerly of the County Sheriff's Office policy division (17 years service, mostly on the west side, including four years in detectives—three in computer crimes, one in general investigations). Deaver expressed enthusiasm for serving the town and mentioned having seven children. Mayor Cavanaugh (in jest) suggested Deaver could "populate our schools" and help with housing development. Captain Martin also recognized former Lieutenant (now Captain) Richard Johnson, promoted and reassigned to the Cave Creek–Carefree substation (District 4). Johnson thanked the council and residents for welcoming him in his short tenure and for the leadership of Captain Martin. Captain Martin also introduced Mark Fisher (administrative deputy) and Sergeant Mike Lawson (newly assigned administrative sergeant, a local resident).

Civic and Cultural Association Leadership Academy Graduation:
The second graduating class of the Fountain Hills Civic and Cultural Association's Leadership Academy was recognized. Approximately 14 students/participants were called forward to receive plaques from the mayor. (Full names transcribed from certificate readings; several attendees were noted as absent—including one who was reportedly in Dallas—or their attendance status was unclear.)

Duration

Context and Notable Themes

State Preemption and Local Zoning Authority:
The home-based business bills represent a significant state-level push to preempt local zoning ordinances. Grady's characterization of HB 2333 and its variants as "draconian" underscored council concern that unfettered home-based commercial activity would degrade the town's residential quality-of-life standards and burden the town with enforcement and liability issues it cannot currently anticipate. This is a recurring tension in Arizona land-use governance: state legislators periodically attempt to deregulate industries (home-based businesses, short-term rentals, etc.) that towns have traditionally controlled through zoning, citing economic freedom and reducing regulatory burden. The Fountain Hills council's unanimous opposition suggests broad agreement that local land-use control is essential to the town's character.

Education Funding as Economic Development Strategy:
The council's education-funding resolution frames school quality as integral to business recruitment and workforce development. Speakers and council members repeatedly noted that companies (Tesla, Amazon, and others) consider education quality and teacher quality when deciding whether to relocate to Arizona. This positions education funding not as a social-welfare issue but as a municipal economic-development asset—a framing that may resonate with business-oriented lawmakers. However, the tension between Magazine's caution (adding specifics might alienate other municipalities) and Yates' desire (for quantified targets) reflects a broader strategic disagreement: whether to signal urgency through boldness or maintain coalition strength through generality.

Master Developer Transition and Density Transfer:
The Adero Canyon Phase 2 approval illustrates a common post-recession land-development pattern: a master developer (MCO Properties) acquired major parcels over time, approved large-scale density, and then divested assets to national homebuilders (Toll Brothers) to monetize and exit the market. The December 2017 general plan amendment authorized density transfers—allowing Toll Brothers to shift approved units from one part of the parcel (the ridges, with custom homes) to another (the canyon floors, with townhouses and semi-custom homes), while preserving open space on the highest-elevation lands. This is an increasingly common mechanism to deliver both density and conservation, particularly in hillside communities where viewshed protection is a priority.

Downtown Revitalization and Developer-Council Relations:
Bart Shea's spontaneous thank-you speech during the call-to-the-public revealed the emotional toll of multi-year development negotiations. His acknowledgment of "collateral damage" and "hard feelings" on both sides, followed by gratitude for council and staff persistence, suggests that the Park Place project—a $70 million downtown investment with $5 million in town infrastructure contributed by the developer—was hard-won. This reflects the difficulty of negotiating major urban infill projects in towns with strong resident input and detailed design/entitlement review. Shea's brief also serves as a preview of continued development pressure downtown, as phase-2 planning is underway with a reduced residential component.

Vote Tally Summary

ItemVoteResult
Consent Agenda (12 items)7-0Approved
Board of Adjustment AppointmentsUnanimousApproved
Resolution 2018-12 (Settlement Agreement Amendment)UnanimousApproved
Resolution 2018-13 (PAD Public Record)UnanimousApproved
Ordinance 18-04 (Rezoning)UnanimousApproved
Preliminary Master PlatUnanimousApproved
Resolution 2018-11 (Development Agreement)UnanimousApproved
Cooperative Purchase C2018 (Fuel)UnanimousApproved
Cooperative Purchase C2016-182 Amendment (Concrete)UnanimousApproved
Cooperative Purchase C2018-054 (Hazardous Waste)UnanimousApproved
Contract C2018-072 (In the Loop Magazine)UnanimousApproved
Resolution 2018-14 (Education Funding)7-0Approved
Legislative Opposition (HB 2116, HB 2333, SB 1002, SB 1175)7-0Approved

All votes were unanimous or near-unanimous (7-0). Individual council-member votes were not recorded by name in the transcript for most items; "all in favor" and silence on "opposed" are the only indicators of unanimity.