Fountain Hills Council Re-adopts Downtown Overlay, Blocks Mini Storage There, Approves Statewide C2 Mini Storage Via Special Use Permit

Fountain Hills Council Splinters on Downtown Zoning and Mini Storage: 4–2 Vote Rejects Downtown Use, Then Approves Town-Wide Allowance, Raising Questions of Consistency

On September 16, the Fountain Hills Town Council approved a re-codification of its downtown Shopping Plaza overlay district but removed a staff-recommended allowance for mini storage facilities there, then—in a nearly contradictory motion—approved a separate text amendment permitting indoor climate-controlled mini storage throughout the community's C2 zones under special use permit. The back-to-back votes exposed fundamental council disagreement about whether downtown Fountain Hills should prioritize retail vitality and entertainment or welcome any substantial business investment, and whether a town-wide zoning text amendment could be reconciled with a downtown-specific rejection.

Key Speeches

"I honestly thought that you and I were going to agree on something tonight. I am just absolutely baffled that we are constantly talking about the vitalization of the area, and by no stretch of the imagination do I want to ever tell a business owner not to invest in fountain hills. That's not the point. I just think that if fountain hills was the size of scottsdale or tempe or something like that, where you have to drive a ways to get to a public storage place, we literally can drive less than three miles to any one of these storage places that are in town." — Councilman Brown

"I do want to hear those proposals. I want to have them have the opportunity to be heard and I want to have them have the opportunity to justify why their business is going to be a good fit for our community… You have to have a critical mass so there's a lot of businesses that have to be interconnected to make that happen and to create the environment for success for all of them. So that's not to be too quick to shoot these proposals down." — Councilman Tolas

"We have a very limited amount of land in that area and I just think we need to be very cautious about what we do with that land because it has such a long-term ramifications to the way forward with the town." — Councilman Spellich

Timeline

Ordinance 20-14: Shopping Plaza Overlay District

• Staff Presentation: Senior Planner John Wesley outlined the history of Plat 208, the downtown core north of Avenue of the Fountains from La Montana to Palisades. The overlay was originally created in 1992 to permit zero-lot-line commercial development on small parcels with shared rear parking. When the town formally adopted its zoning code in 1993, the overlay was inadvertently omitted—though the town continued to treat the property as if it remained in effect for decades. Wesley proposed re-codification to formalize existing conditions, with a few amendments: removal of outdoor activity-screening requirements for sidewalk cafés, clarification of parking standards, and a new option to reduce parking on larger lots (over 10,800 sq ft) by up to 50% via special use permit.

• Planning & Zoning Commission Recommendation: The commission recommended approval but included a provision to allow indoor mini storage in the overlay district as a special use permit—a use not in the original 1992 code. Staff noted concern that mini storage lacked foot traffic and pedestrian activity consistent with downtown vitalization goals, and that no comparable cities' downtown core zones permit such facilities.

• Public Comment: One speaker, architect Donald Andrews (formerly on the board of adjustments in the 1990s), argued that Plat 208 had historically been a "failure" because its small-lot ideology dated to 1960s federal planning assumptions, not modern needs. He distinguished "internalized" climate-controlled mini storage (for commercial tenants and residents needing backup space) from "mini storage" (outdoor, uncontrolled), and noted that downtown entertainment districts rely on support services because small lots cannot absorb back-storage functions. He offered pro-bono planning assistance.

• Council Discussion: The debate split clearly. Councilmen Brown and Spellich opposed the mini storage allowance, citing the town's 50th-anniversary vision of a "Beverly Hills of Arizona"—implying high-end retail, restaurants, and entertainment, not warehousing. Brown noted that three miles away, six or seven existing storage facilities serve the community, and that the downtown corner lot in question already has a car wash across the street and an antique-car repair facility nearby, which he deemed inconsistent with vitality. Spellich emphasized that "we have the opportunity to build things in town, but sometimes we pick the wrong locations."

  Councilmen Tolas and Spellich countered that shooting down investment proposals without hearing them was unfair. Tolas recited the story of his 2002 mortgage-company proposal to the planning commission, which was rejected but the property later became an assisted-living facility. He argued the council should hear what a developer planned to build and how it would be designed before refusing it. He also noted that the downtown area, originally platted for 70,000 residents, was more sprawled than Scottsdale or Tempe, so expectations for it must be realistic. Spellich pointed out that if a custom-designed building "looks like a high-end apartment complex or condos," it would not read as a storage facility.

  Councilman Brown articulated the risk: "I'm not against business… I just think we need to be very cautious about what we do with that land because it has such a long-term ramifications." Councilman Spellich reiterated staff's recommendation that no other town's downtown core allows mini storage. He also raised the point that approving the use in the downtown overlay while rejecting it elsewhere might later expose the town to litigation from property owners of other C2 parcels who had proposed similar uses and been denied.

• Vote: Motion by Councilman Spellich to approve Ordinance 20-14 but remove the mini storage provision and add a parking-reduction option for lots over 10,800 sq ft. Second by Councilman Brown. The amended motion passed 4–2. (The transcript does not explicitly name the two dissenters, but the context of the discussion indicates Brown and Spellich voted yes, along with two others; Tolas and possibly one other voted no or abstained.)

Case 2020.05: Indoor Mini Storage in C2 Districts Town-Wide

• Staff Presentation: Senior Planner Farad presented a staff-initiated text amendment to permit indoor climate-controlled mini storage in C2 (intermediate commercial) zoning districts under special use permit. Currently, mini storage is allowed by right only in C3 (general commercial) and in industrial zones. The amendment would add it to the list of uses in Section 12.05 of the zoning ordinance (special uses in C2 only) and require a special use permit for approval. Farad defined "indoor mini storage" as climate-controlled units (typically 8×8 or 8×10 feet) housed entirely within an air-conditioned building, intended for residents within a small radius and designed with enhanced architectural treatment to improve curb appeal. He noted that of 16 Phoenix-area jurisdictions studied, 13 allow mini storage by right in some zones; three require a special use permit regardless of zone; and none permit it in urban cores or downtown overlays. Farad recommended approval to expand inventory of potential sites town-wide while allowing the council and commission to review traffic, appearance, noise, and business-hours impacts.

• Planning & Zoning Commission Recommendation: Approval (unchanged from staff).

• Public Comment: Two speakers. Donald Andrews repeated his point about the semantic difference between "mini storage" (outdoor, generic) and "internalized storage" (climate-controlled, security-enabled, suitable for commercial tenants). He urged the council to use precise terminology in the ordinance and offered to help study best practices. Bob Mandel, a non-profit founder based in Fountain Hills, argued that mini storage is "a quiet business, no noise, no traffic" and would attract other businesses to invest in underutilized C2 sites. He urged the council to hear proposals rather than pre-judge them.

• Council Discussion: The debate continued the tension from the first item. Councilman Spellich re-raised his earlier objection: the council had just denied mini storage in a C2 district (the downtown overlay), so why pass a town-wide amendment permitting it elsewhere in C2 with only a special use permit? He suggested the amendment was meaningless if the council could already deny any special use permit on discretionary grounds. "I'm not understanding why we're spending the time going through an amendment when the council has all the authority in town to say you bet this C2 district will work."

  Vice Mayor Sharma clarified the mechanics: currently, mini storage is not listed as a permitted use (even with a special use permit) in C2 zones anywhere. The amendment would add it to the list of allowable uses with a special use permit, creating an application pathway. Without the amendment, no property owner could even apply for a special use permit for mini storage in C2—it would be categorically prohibited. Councilman Brown acknowledged the distinction but asked whether the council was creating litigation risk by carving out mini storage from the downtown overlay while allowing it elsewhere in C2, thereby treating downtown C2 parcels differently from all other C2 parcels.

  Town Attorney Aaron (surname not provided in transcript) clarified that the overlay district and non-overlay C2 zones are distinct legal classifications. The council was not diminishing any existing rights of downtown property owners by re-codifying the overlay consistent with historical practice; it was simply declining to add a new use. Councilman Tolas remained concerned about the asymmetry: other special uses allowed in C2 (listed in Section 12.03, such as RV parking) were historically available to downtown overlay properties, but staff was not proposing to restrict those from the overlay. Why single out mini storage for exclusion downtown while allowing it town-wide? Aaron clarified that Section 12.05 uses (mini storage being added) were not historically available in the overlay; Section 12.03 uses (pre-existing special permits) remained available to overlay properties.

  Councilman Tolas pressed further: if the council rejected mini storage downtown because of vitality concerns but then approved it town-wide, was the council implicitly saying that mini storage was acceptable somewhere and should not be pre-judged everywhere? Councilman Spellich remained unmoved, noting that the downtown has unique importance and does not need mini storage to succeed, while the rest of the town might benefit from the use. Councilman Brown, conversely, noted that code enforcement staff should, by motion passed earlier in the meeting, move toward more proactive enforcement of property maintenance, and allowing mini storage elsewhere in C2 does not conflict with protecting downtown from it.

  Vice Mayor Sharma suggested amending the ordinance text from "indoor mini storage" to "internalized climate-controlled storage" to match Andrew's semantic precision and avoid confusion with outdoor mini storage. The council agreed, and Councilman Brown moved approval of Case 2020.05 with the terminology change.

• Vote: Motion to approve Case 2020.05 with the wording changed from "indoor mini storage" to "internalized climate-controlled storage." Motion passed by voice vote; vote tally not recorded in transcript.

Opposition

Ordinance 20-14 (Downtown Overlay) – Mini Storage Provision:

• Number of speakers: 1 public comment (Donald Andrews, who was actually nuanced and not purely opposed).
• Main concerns:
  1. Mini storage lacks foot traffic and pedestrian vitality essential to downtown core.
  2. No comparable city allows mini storage in its urban core or downtown overlay.
  3. The downtown area is unique—the "focal point of the town" and driver of economic activity—and deserves careful stewardship.
  4. Six to seven existing storage facilities within three miles of downtown already serve the community's need.
  5. A high-end vision for downtown ("Beverly Hills of Arizona") is incompatible with warehousing.
  6. The corner lot in question (Plat 208 at Palisades and Verde River Drive area) is better suited to retail, entertainment, or office space.
  7. Limited downtown real estate should be reserved for uses that drive regional draw and vitality, not internal support functions.
• Most compelling arguments:
  • Councilman Spellich: "We have the opportunity to build things in town, but sometimes we pick the wrong locations." He cited the failed hotel proposal on Monterey (rejected because it conflicted with nearby residential condos) as a cautionary tale of misplaced investment.
  • Councilman Brown: "I just think we need to be very cautious about what we do with that land because it has such a long-term ramifications to the way forward with the town."
  • Vice Mayor Sharma (reading from staff report): "No city or town with specific downtown or town center zoning allowed indoor mini storage as a use in these areas. This type of use is not consistent with the nature of an urban core setting."
• Organized groups: None identified.

Case 2020.05 (Town-Wide C2 Mini Storage) – Procedural and Policy Concerns:

• Number of speakers: 2 (Andrews and Mandel; the council did not formally organize opposition, but Spellich and Brown expressed skepticism during council discussion).
• Main concerns:
  1. The amendment undermines the council's just-stated position that mini storage does not belong in downtown C2 zones; why allow it elsewhere in C2 if the principle is that it lacks vitality?
  2. Lack of clarity about when the council can actually deny a special use permit versus when it must approve an allowable use; special use permits are not true discretionary gates.
  3. Potential litigation risk: property owners of other downtown C2 parcels might argue that the council's carve-out of mini storage from the overlay while permitting it elsewhere in C2 violates equal-protection or fair-treatment principles.
  4. Ordering of agenda items: presenting the town-wide amendment after the downtown rejection, rather than before, altered the council's frame of reference and prevented full debate about whether mini storage should be broadly allowable.
• Most compelling argument:
  • Councilman Spellich: "I'm not sure why we're going through this exercise at all. The council just denied it in a C2 district because they didn't think it belonged there. But if the council believed that it should have been there, they would have approved it. So I'm not understanding why we're spending the time going through an amendment when the council has all the authority in town to say you bet this C2 district will work."

Support

Ordinance 20-14 (Downtown Overlay) – Mini Storage Provision:

• Number of speakers: 1 (Donald Andrews, offering conditional support and nuance).
• Main points:
  1. The downtown "small-lot" character of Plat 208 reflects 1960s ideology and has always been the "inherent problem" with downtown vitality. Codifying the overlay is correct, but allowing support uses (mini storage) is necessary for downtown entertainment and retail to succeed.
  2. "Internalized" climate-controlled mini storage is fundamentally different from outdoor "mini storage" and serves commercial tenants, not just homeowners. Many downtown entertainment districts rely on such facilities.
  3. A downtown with restaurants, food services, and retail cannot absorb back-storage on small lots and therefore needs nearby commercial storage.
  4. Climate-controlled internalized storage facilities can be designed to look like "high-end apartment complexes or condos" and need not resemble typical storage facilities.
  5. Staff should study the distinction between mini storage and internalized storage and possibly restrict the overlay to the latter.
• Organized groups: None.

Case 2020.05 (Town-Wide C2 Mini Storage):

• Number of speakers: 2 (Andrews and Mandel).
• Main points:
  1. (Mandel) Mini storage is "a quiet business, no noise, no traffic" and will attract other business investment to underutilized C2 sites. The town should welcome investment and hear proposals rather than pre-judge them.
  2. (Mandel, indirectly) The town has a track record of criticizing itself for vacant downtown space; mini storage, while not glamorous, is a productive use of land that adds tax base and may catalyze further investment.
  3. (Andrews) The amendment should specify "internalized climate-controlled storage," not "mini storage," to avoid confusion and to signal that outdoor, uncontrolled storage is not permitted.
  4. (Council sentiment, Tolas and Spellich) Business investment and job creation matter; the council should allow proposals to be heard before rejecting them.
• Most compelling arguments:
  • Councilman Tolas: "I want to have them have the opportunity to be heard and I want to have them have the opportunity to justify why their business is going to be a good fit for our community… I don't ever want to turn anyone away that's going to invest in our community. I want to hear what they have to say and get have them go through the channels."
  • Councilman Spellich: "There's a lot of businesses that have to be interconnected to make that happen and to create the environment for success for all of them."

Project Details

Ordinance 20-14: Shopping Plaza Overlay District

• Case number: Not assigned (ordinance designation 20-14).
• Applicant / affected parties: Plat 208 property owners and residents; no specific developer named on this item.
• Attorney: N/A (town-initiated re-codification).
• Location / address: North half of Plat 208, north of Avenue of the Fountains, from La Montana to Palisades Boulevard, Fountain Hills, Arizona.
• APN: Not stated in transcript.
• Current zoning → Proposed zoning: C2 (Intermediate Commercial) with re-adopted Shopping Plaza Overlay District (Chapter 26 of the zoning ordinance). No underlying zoning change.
• Density / units / square footage: Not applicable; overlay governs development form and use permissions.
• Changes from previous version: Removal of indoor mini storage provision from the draft ordinance; addition of parking-reduction option for corner lots (over 10,800 sq ft) allowing up to 50% reduction via special use permit (rather than requiring full compliance with Chapter 7 parking standards). Clarification of outdoor seating for restaurants (no screening required, unlike prior code). Updated lot-coverage language to allow maximum coverage on corner lots consistent with other setback and parking constraints.

Case 2020.05: Indoor Mini Storage in C2 Districts

• Case number: 2020.05.
• Applicant: Town of Fountain Hills (staff-initiated text amendment).
• Attorney: Town Attorney Aaron.
• Location / applicability: All C2 (Intermediate Commercial) zoning districts in the town of Fountain Hills, except where excluded by overlay (e.g., downtown Shopping Plaza Overlay, which does not permit this use per Ordinance 20-14).
• Current zoning → Proposed zoning: No zoning change; text amendment to Section 12.05 of the zoning ordinance (special uses in C2 district).
• Density / units / square footage: N/A; defines allowable use and permitting pathway, not density.
• Definition: Indoor climate-controlled mini storage or "internalized climate-controlled storage" facilities—modestly sized units (typically 8×8 or 8×10 feet), entirely indoors within air-conditioned building, intended for residential and small-radius commercial clientele. Designed with enhanced architectural elements for improved curb appeal.
• Permitting: Special use permit required; not a by-right use.

Vote Breakdown

Ordinance 20-14: Shopping Plaza Overlay District

• Final: 4–2.
• Yes: Councilmen Brown and Spellich, plus two council members not explicitly named in transcript (likely Brenda J. Kalivianakis and Mayor Dickey based on context, though voting pattern not definitively stated).
• No: Councilmen Tolas and one other (likely Allen Skillicorn or another member not definitively identified in transcript).
• Abstentions / absences: None stated.

Case 2020.05: Indoor Mini Storage in C2 Districts

• Final: Passed by voice vote; individual vote tally not recorded in transcript.
• Yes: Unanimous or near-unanimous (specific breakdown not stated).
• No: None recorded.
• Abstentions / absences: None stated.

Outcome & Next Steps

Ordinance 20-14:

• Approved and will be codified as Chapter 26 of the Fountain Hills Zoning Ordinance.
• Downtown Shopping Plaza Overlay District re-established with its historical conditions (small-lot zero-setback development, shared rear parking, pedestrian-oriented form).
• Mini storage use removed; property owners and potential developers seeking to operate such a facility downtown would need to pursue a C2 special use permit or pursue a zoning change to C3 (general commercial), which would unlock other uses beyond mini storage.
• Parking-reduction option (up to 50% for lots over 10,800 sq ft) added; staff to codify language in final ordinance.
• Council directed town staff to develop restrictions or guidelines for Avenue of the Fountains (identifying distinct commercial nodes and use categories to guide future development).

Case 2020.05:

• Approved; ordinance text to be finalized with terminology changed from "indoor mini storage" to "internalized climate-controlled storage" to reduce ambiguity.
• Effective upon adoption; any future application for indoor mini storage in a C2 zone (outside the downtown overlay) will trigger a special use permit process, subject to council and/or planning commission review of traffic, appearance, noise, hours of operation, and compatibility with surrounding uses.
• Property owners and developers in C2 zones can now apply for a special use permit for this use; council and planning commission will review each application on its merits but cannot categorically deny a conforming application without stated cause.

Controversies & Context

Downtown Vitalization vs. Business Expansion: The council's split votes reveal a fundamental policy tension. Councilmen Brown, Spellich, and Sharma framed downtown as Fountain Hills' "focal point" and engine of regional draw, and argued that limited downtown real estate should be reserved for uses that generate foot traffic, pedestrian activity, and economic synergy (retail, entertainment, office, high-end dining). Councilmen Tolas and Spellich countered that the town has suffered from vacant downtown space for years and should not turn away substantial business investment without hearing a proposal. Tolas cited his own experience in 2002 being rejected by planning and zoning for a mortgage-company office, which was later transformed into an assisted-living facility—both productive uses the market chose, not the planning commission. The disagreement is not fundamentally about mini storage per se, but about whether the town should pre-judge uses or hear business cases on their merits.

State Preemption and the "Mini Storage" Semantic: Arizona state law limits cities' and towns' ability to regulate short-term rental properties (highlighted in a separate council presentation by Sheriff Captain Kratzer). Similarly, the state has restricted towns' zoning authority in ways that motivate text amendments. The planning discussion revealed a semantic gap: "mini storage" (outdoor, uncontrolled, generic) is colloquially conflated with "internalized climate-controlled storage" (climate-controlled, secure, designed for commercial and residential small-footprint backup). The speaker Donald Andrews argued that the ordinance should distinguish these uses to allow downtown overlay regulations to prohibit the former while potentially permitting the latter if designed appropriately. The council's last-minute rewording to "internalized climate-controlled storage" reflects this concern.

Ordering and Framing: Councilman Spellich criticized the agenda order, suggesting that presenting Case 2020.05 (town-wide allowance) after rejecting mini storage downtown (Ordinance 20-14) created a confusing and contradictory frame. Had the council first approved a town-wide text amendment establishing the feasibility of the use, and then decided whether to exclude it from downtown, the debate might have proceeded more logically. The reversal led to the appearance that the council was being inconsistent.

Historical Code Gaps: The original Shopping Plaza Overlay (1992) was inadvertently omitted from the town's formal zoning code when it was adopted in 1993. For nearly 30 years, the town treated Plat 208 as if the overlay existed, even though it did not appear in the codified ordinance. This gap is not unusual in Arizona municipalities, but it created ambiguity about what rights property owners actually possessed and what the town could enforce. Re-codification clarifies the legal status but also—intentionally or not—modifies the allowable uses by excluding mini storage.

Litigation Risk: Vice Mayor Sharma and Councilman Tolas raised the concern that by permitting internalized mini storage in C2 zones outside the downtown overlay but denying it within the overlay, the town might invite equal-protection or fair-treatment challenges from C2 property owners in the downtown who believe they were treated unfairly relative to C2 owners elsewhere. Town Attorney Aaron opined that the overlay is a distinct zoning classification and that the town is not diminishing any existing rights, but rather declining to add a new use to an historically distinct zone. The legal weight of that position in litigation is uncertain.

The 50th Anniversary and General Plan Context: The mayor and council repeatedly referenced the town's 50th anniversary and an upcoming general plan (to be on the November ballot) that establishes a vision for downtown as a "high-end," "vibrant," "Beverly Hills of Arizona" kind of place. The general plan and overlay district re-codification are meant to work together to preserve and enhance downtown's unique character. Allowing mini storage downstream would undermine that vision, according to the dominant council sentiment.

Duration

• Ordinance 20-14 and Case 2020.05 (combined): Approximately 90–120 minutes, including staff presentations, council discussion, public comment, and votes.
• Total meeting: Approximately 3.5 hours (meeting began with invocation, roll call, council reports, and multiple other agenda items including a council seat appointment, economic development grants, code enforcement property-maintenance updates, and street-pavement management).

Other Notable Items

Council Seat Appointment: Unanimous approval to appoint Jerry Ferdell to fill the council vacancy left by Sherry Lecrone, who accepted a position as head of the Maricopa County Attorney's Office's newly created unit prosecuting crimes against law enforcement. Ferdell received the most votes in the primary election and was sworn in by Judge Milton during the meeting.

Small Business Assistance Program (CARES Act): Economic Development Director James Smith reported that 65 applications for pandemic-relief grants were received; 28 were fully funded ($140,000), 9 approved for payment ($45,000), and 40+ more under review. Approximately $240,000+ committed to date with the expectation of expending all $300,000 by end of September. Restaurants, bars, and service-industry businesses led the recipient categories.

Property Maintenance and Code Enforcement Ordinance (Ordinance 2020-17): Council approved amendments to Chapter 10 (Health and Sanitation) establishing clearer definitions of "developed property," "native vegetation," "natural desert," and "weeds" (6-inch height threshold). New sections specify landscape maintenance standards, weed control, sight-triangle requirements, and right-of-way responsibility. Council also directed staff to examine proactive enforcement (beyond complaint-driven response) and to study remedies for abandoned, fire-damaged, or incomplete-construction properties.

Street Pavement Management: Council approved a first amendment to the cooperative purchasing agreement with tanner (paving contractor) in the amount of $2.65 million, allowing completion of downtown pavement work (areas in red on the map already done by June 30; areas in blue now to be completed as soon as the Keystone and roundabout projects are finished, as early as October). The amendment also funds local-street crack-filling and research into longer-term rehabilitation strategies using new low-cost treatments (slurry seal, mineral bond, chip seal with cape) to extend road life seven to ten years at a fraction of reconstruction cost. Staff noted that the town's 10-year pavement management plan recommends $6 million annually, but current funding is approximately $2.5–3.3 million, requiring difficult prioritization. Council directed management to explore dedicating any CARES Act surplus to the street fund.

Reverend Jeff Temples' Opening Prayer and Perspective on 2020: Reverend Jeff Temples (Shepherd of the Hills Lutheran Church) opened the meeting with a reflection on 2020's disruptions, quoting Robert Burns' "To a Mouse" ("the best laid schemes of mice and men often go awry") and Proverbs 16:9 on divine guidance despite human planning, and offered a prayer for council decision-making and community resilience.