Fountain Hills approves one-year extension for 134-unit Hemingway assisted living facility despite community opposition
FOUNTAIN HILLS, ARIZONA — June 27, 2018

Fountain Hills approves one-year extension for 134-unit Hemingway assisted living facility despite community opposition

Town council approved a one-year extension for Hemingway assisted living PAD despite significant community opposition and legal challenges regarding property transfer, special use permit expiration, and general plan consistency, with councilmember concerns about variance proliferation splitting a previously unanimous 2015 approval into a 4-2 vote.

Town Council Splits 4-2 on Hemingway Assisted Living PAD, Approving One-Year Extension Despite Legal Disputes and 300-Signature Petition

Fountain Hills Town Council approved a contentious one-year extension for the Hemingway assisted living facility on June 27, 2018, reviving a project unanimously approved in 2015 but now facing significant community opposition and unresolved legal questions about property ownership, permit expiration, and variance portability. The 4-2 vote represented a dramatic reversal from the project's seven-zero approval three years earlier and exposed fault lines within the council itself over the town's approach to development and adherence to zoning ordinances.

The extension request came after the property transferred from applicant Dan Kaufman's personal ownership to Pinnacle View Development LLC, a change that raised questions about whether existing zoning variances and permits remained valid. The vote split along fiscal and planning philosophy lines, with Vice Mayor Brown supporting the extension to address the town's revenue challenges following a 66-percent rejection of a property-tax measure, while Councilmember Magazine opposed on the grounds that the council has already approved too many variances, rendering original development intent unrecognizable.

Key Speeches

"I've been a resident of fountain hills for 25 years first of all i want to i guess talk about some rumors are flying around out there or being spread and set it straight... we're all aware that this will go back to c1 if it's not approved and then at that point it's commercial and we're aware of that you know as a consul and a as a local business owner i've been here 25 years and have done a lot for the community and we want don't want to drive businesses away we need uh you know smart growth." — Dan Kaufman, applicant/property owner

"Extension hearings they provide us that rare opportunity for us to employ that hindsight and those lessons learned along the way as we consider the path forward tonight... the pathway to get here tonight i think we can all admit is a bit windy i've not seen anything like this with two pads in front of a planning and zoning commission in my entire career... when do we stop pulling all the energy and resources down the drain and shore this process up when does a property which is purchased as c1 zoning respect its adjacent land holders their investments." — Peter Gray, resident and healthcare development professional

"This is exactly the same project that was passed in 2015 7-0... the economy plays a huge part in what we're doing... we're going to have to find somehow to get some revenue going in this town and i have a fly that i might catch it here in a minute i'm not crazy but somehow this town's going to have to start generating some revenue and so we don't want to tax and we don't want development so what are we going to do set and go broke because those are the three options we've got." — Vice Mayor Brown, supporting the extension

"My colleague uh councilman brown said we don't want development and uh i take issue with that we've approved a lot of development and we will in the future the question is the development the kind of development we want in the right place... in my view we have and i've been part of this approved too many zoning requests variances um special use permits and so on which then renders the original intent almost unrecognizable... i'm going to oppose the one year extension for the same reasons that i voted against the project originally it's in violation of the plan it's in violation of the zoning." — Councilmember Magazine, opposing the extension

Timeline

Opposition

Number of speakers against: 6 (plus 2 additional speaker cards recorded as opposed)

Main concerns:

  1. Property transfer as trigger of reversion clause: Original 2015 ordinance language stated: "if the applicant does not construct the project proposed or sells the property which it has been the pad in additional waivers become void and reverted back to c1." Deed of trust transferring title from Dan Kaufman to Pinnacle View Development LLC (with recorded consideration of $10) constitutes a "sale" triggering reversion.

  2. Special use permit expiration: Ordinance 2.02 F 0.1 mandates building permit secured within six months of approval; failure to do so renders special use permit "null and void." SU 2015-06 issued November 21, 2015; six-month term expired November 21, 2015. PAD approval and SU permit are "two distinctly different elements" and SU requires new application, not extension.

  3. Zoning variances non-transferable post-ownership change: Ordinance 207 B1 states variances are "personal to the applicant... shall run with the land only after construction of the structure or structures is completed." Applicant transferred property prior to construction, voiding all three variances embedded in the PAD, leaving base C1 zoning.

  4. Wrong entity filed application: CA Ventures (applicant in 2015) filed extension application June 1, 2018, but property now owned by Pinnacle View Development LLC. Ordinance requires applicant control of property; unclear if CA Ventures authorized by current owner. "Global concern is ca's role as a stakeholder in the hemingway project none of us knows any of that."

  5. Parking inadequate: 90 spaces provided vs. 171 required (Thousand Oaks, California ordinance 9-4 0.2402, which studied similar parking issues); 81-space deficit. Secondary use as apartments would require 203 spaces (113-space deficit). Steep grades, two football-field distances from residences to clubhouse demand vehicle use; overflow parking would impact 30-foot-wide residential streets (Burkimo, Trevino, Monterey) with no sidewalks.

  6. General Plan inconsistency: Ordinance 2306 requires PAD consistency with town General Plan; assisted living use "no longer consistent with the town general plan or strategy." Policy decision made in 2015 does not override current plan requirements.

  7. Financial viability in doubt: Applicant's own legal counsel (Nick Woods) stated at prior council meeting that the Hemingway was a "bad design" and not built because it is "plain and simple a bad design." CA Ventures previously disclosed at community meetings the design was a "revenue loser." Why approve extension for project applicant's counsel calls unworkable?

Most compelling arguments: Larry Myers synthesized the ownership-transfer legal issue most sharply: the deed of trust transferring the property from sole proprietor Kaufman to LLC Pinnacle View, recorded December 27, 2017, combined with explicit reversion language in the 2015 ordinance ("if the applicant... sells the property... the pad in additional waivers become void and reverted back to c1"), created a trigger event for automatic reversion. Ted Bell reinforced the variances issue: the three zoning variances embedded in the PAD run with the land only after construction; the pre-construction transfer voided them, leaving only base C1. Elinka Zermatt isolated the special use permit expiration, noting the 2015 ordinance and 2.02 F 0.1 create two independent expiration clocks—the PAD's three-year term (expiring May 21, 2018) and the SU's six-month term (expiring November 21, 2015)—and that failure to secure a building permit within the SU's six-month window made the SU "null and void," requiring a new application.

Organized groups: Petition signed by 300+ residents opposed to the extension (referenced by multiple speakers). Jane Bell spoke on behalf of neighbors and referenced 350+ signatories across all related concerns.

Support

Number of speakers in favor: 2

Main arguments:

  1. Project design is proven and residential: Dan Kaufman and Tim Delaney both emphasized the Hemingway design is cluster housing—small multi-building assisted living—not a monolithic structure. Tim Delaney noted the design is common in the Southwest, being built in Goodyear, Chandler, Mesa, and Phoenix. Lots for similar projects range 4–10 acres; buildings 8,000–20,000 square feet each. Allows phased construction and segregation of care needs by building.

  2. Ownership transfer is standard organizational restructuring: Tim Delaney, as commercial real estate broker who facilitated the buyer introduction, explained the $10 consideration in the deed of trust is "standard language that's used throughout the industry" and represents a restructuring of title, not a sale. Town Attorney echoed: "our position would be that it was not a sale of the property it was just a organizational shift."

  3. Parking exceeds city requirements: Kaufman stated he is providing "three times what the parking requirements are by the city fire approval" and all approvals were completed prior to the original 2015 PAD approval.

  4. Town needs revenue and development: Vice Mayor Brown emphasized that a property-tax measure failed 66 percent; the town faces a revenue crisis and must choose between taxation, development, or insolvency. The Hemingway, though residential-looking compared to the recently denied senior living PAD, is a valid revenue source. "I think we would be doing an injustice to the town as fountain hills... if we don't support extending the this project."

  5. Extension delays are normal and economic: Tim Delaney explained the 18-month escrow delay during which he and a potential buyer attempted to redesign the project (ultimately denied at council meeting three weeks prior). This is not Kaufman's fault but a function of market conditions. Kaufman has clarified he remains personally involved.

Project Details

Vote Breakdown

Outcome & Next Steps

The town council approved Resolution 2018-31 granting a one-year extension to the Hemingway PAD. Construction must commence by May 21, 2019. If construction does not begin by that date, the applicant may file another one-year extension request. If no extension is filed or approved, the PAD expires and the property reverts to base C1 zoning with all PAD conditions and variances void. Any changes to the approved PAD design would require a new public hearing; administrative approval is not available.

Controversies & Context

Property Transfer and Reversion Clause: The June 2015 ordinance 15-05 approving the original PAD included language: "if the applicant does not construct the project proposed or sells the property which it has been the pad in additional waivers become void and reverted back to c1." In December 2017, Kaufman transferred the property via deed of trust to Pinnacle View Development LLC, listing consideration at $10. Town Attorney William characterized the transfer as an "organizational shift" and "not a sale of the property," relying on the $10 recital as standard industry language and the continuity of beneficial ownership by Kaufman. Speakers disputed this, arguing a transfer of title—regardless of form—constitutes a "sale" triggering the reversion clause and that the $10 recital is insufficient to defeat the plain language of "sells the property."

Special Use Permit Expiration Ambiguity: Ordinance 2.02 F 0.1 mandates that a building permit for any special use permit must be secured within six months of approval, or the SU becomes "null and void." SU 2015-06 was issued November 21, 2015; six months passed on November 21, 2015, with no building permit obtained. Speakers argued the SU is therefore void and requires a new application. Town Attorney countered that the PAD ordinance language stating the "terms of the pad superseded the zoning ordinance" extended the SU term coterminous with the PAD's three-year initial term. The legal question—whether a PAD can resurrect or extend an expired SU—was resolved by the town attorney in favor of the applicant but remains contested by speakers citing plain ordinance language.

Variance Portability Post-Ownership Change: Ordinance 207 B1 states variances are "personal to the applicant" and "shall run with the land only after construction of the structure or structures is completed." The original 2015 PAD approval included three zoning variances (per multiple speakers). The pre-construction transfer of title to Pinnacle View Development LLC raises the question whether these variances survive. Town Attorney and staff did not directly address this issue in the public hearing.

Fiscal Pressure and Planning Philosophy Split: Vice Mayor Brown's pivotal support for the extension centered on the town's financial distress: a property-tax measure was rejected 66 percent by voters, and the town faces a trilemma of taxation, development, or insolvency. However, Councilmember Magazine explicitly stated that approving development and approving the right development in the right place are different propositions. He cited the council's pattern of approving "too many zoning requests variances special use permits and so on which then renders the original intent almost unrecognizable" and noted that he voted 7-0 for the Hemingway in 2015 but would not vote for it today given changed circumstances and the council's cumulative variance approvals. This suggests the split vote reflects evolving perspectives within the council on growth and planning discipline, not a simple reversal of prior judgment.

Applicant Credibility Questions: Multiple speakers cited statements by Nick Woods (the applicant's legal counsel) and CA Ventures that the Hemingway design was a "bad design" and a "revenue loser" not worth building over three years. Speakers asked why the council should approve an extension for a project the applicant's own counsel has characterized as unworkable. Tim Delaney's testimony that he (not Kaufman) was responsible for the 18-month escrow delay (through introduction of an alternative buyer attempting a redesign that was later denied) partially addressed this but did not fully resolve the perception of lukewarm commitment.

Recent Precedent and Momentum Shift: Three weeks prior to this June 27 hearing, the same council voted down a different senior living PAD (the Fountain Hills Senior Living PAD) amid similar community opposition. That vote signaled a shift in council appetite for senior living projects. Speakers urged the council to "continue the momentum of three weeks ago" and revert the Hemingway to C1. Vice Mayor Brown explicitly acknowledged the recent denial but argued the Hemingway is a better design (residential-looking cluster housing vs. a large single building) and thus worthy of extension despite the fiscal-revenue motive.

Duration

Other Notable Items

1. Prior Property-Tax Rejection: Vice Mayor Brown cited a property-tax measure defeated 66 percent by voters, framing the town's fiscal emergency and revenue-generation necessity as context for the extension approval. This reflects state-level tax constraints (likely Arizona property-tax limitations) forcing towns to rely on development fees and commercial revenue.

2. Recent Senior Living PAD Denial: Councilmember Magazine and other speakers referenced the council's denial of a different senior living PAD (Fountain Hills Senior Living PAD) approximately three weeks prior to this meeting. The timing and similar opposition raised questions about consistency and whether the Hemingway's extension represented a reversal of recent sentiment.