FOUNTAIN HILLS, ARIZONA — August 14, 2019

Fountain Hills approves 147-unit Keystone rental project; rejects marijuana dispensary extended hours

Council approved major 147-unit downtown rental development with parking deviations and held contentious hearing on medical marijuana operating hours extension amid community concerns about town character and patient access.

Fountain Hills Council Approves Major Downtown Rental Complex Amid Parking Concerns; Medical Marijuana Hours Bid Fails on Community Character Vote

On August 14, 2019, the Fountain Hills Town Council advanced a transformative downtown development while deadlocking on medical marijuana access, yielding a mixed evening of growth-oriented approval and socially conservative pushback. The Keystone Planned Area Development—a 147-unit mixed-income rental community valued at approximately $35 million—cleared a 6–1 vote despite vocal concerns about parking adequacy. Simultaneously, a request to extend medical marijuana dispensary hours from 9am–7pm to 8am–10pm plus delivery service failed 5–2, with three council members voting to oppose and two abstaining or absent, leaving the outcome unresolved pending a second reading or deliberation.

Key Speeches

On Keystone's Design and Market Precedent:

"This type of development really represents a lifestyle choice. The people that come in this type of a community are usually ones that are wanting to stay in the area. They are ones that are wanting to truly have that lock-it-and-leave-it lifestyle because this does combine the best of single-family living with residential or with multi-family traditional lease terms." — Brennan Ray, Ray Law Firm, representing Keystone Homes

On Parking Deviations:

"We are parking this at 2.0 [spaces per dwelling unit], and we think that is more than appropriate for this type of development in this type of location." — Brennan Ray

On Medical Marijuana Patient Access:

"Access to medicine is key. I think retail hours are retail hours. There's a reason why Walgreens and CVS are open until 10 p.m., there's a reason why Target is open until 10 p.m., there's a reason why Walmart is open 24/7—because there's a lot of folks that work at different times." — Mark Steinmetz, Medical Marijuana Dispensary Applicant

On Opposition to Extended Hours:

"I see the need, I know the need, I have acquaintances that frequent your facility. I don't see that they're going to get out as late as you're wanting to stay open. I'm not in favor of it at all." — Council Member Charnel (opposing extended hours, citing town character concerns)

On Patient Necessity:

"There are many patients who that would be a big blessing, a huge blessing. By having delivery, there are many patients who that would be a big blessing for a huge blessing and with Mayo Clinic right down the road, you have even more people who come here and sometimes they stay a while because they are healing or they are dealing with medical issues that needs to be supported." — Public commenter supporting delivery option

Timeline

Keystone Planned Area Development (Ordinance 19-09)

Applicant presentation: Marissa (Fountain Hills Planning Staff) outlined the 12.25-acre downtown site, currently vacant, bounded by Bashas, Avenue of the Fountains, La Montaña, and Westby; proposed 147 units (10 duplexes, 127 single-family detached homes), 36 garage spaces across nine garages, clubhouse, pool, and corner park with public art. Staff flagged entertainment overlay district restriction to 8 units per acre (18-unit maximum) and requested overlay removal to enable 147-unit density.
Staff recommendation: Planning & Zoning Commission unanimously approved 6–0. Staff recommended approval subject to catch basin construction (stormwater management), compliance with development plan, design review of clubhouse amenities, and compliance with town codes except as modified. Marissa noted deviations approved: 27-foot drive vial vs. 24-foot code; 14-foot retaining walls vs. 6-foot maximum; 9×18-foot parking spaces vs. 9×19-foot code; 302 parking spaces vs. 308 required (six-space shortfall); 36 parallel spaces on Westby counted toward parking requirement.
Public comment: One written speaker card in support; commenter elected not to speak. Earlier, resident Jan Parisian (during call to the public) opposed Daybreak development and advocated for downtown cultural center at fountain area instead of housing.
Council discussion:
- Council Member Tolis raised three critical legal and financial questions: (1) rental tax rate (commercial vs. residential) and whether Keystone qualifies as a commercial entity subject to 2.6% vs. 1.6% town rental tax; (2) developer accountability for town expenses in permitting and processing if the project sells to a third party or never breaks ground; (3) deed restrictions to prevent conversion from rental to fee-simple condominium ownership (which would eliminate rental tax and reduce sales-tax contribution). Town Attorney confirmed 1.6% long-term rental tax applies; rental tax depends on nature of use, not zoning. Financing and development-agreement expiration clauses were noted as protections but incomplete.
- Council Member Sharna objected to parking deviations, calling the 302-space proposal a "major" (not minor) deviation. He noted staff comment that overflow could spill to nearby commercial lots (Starbucks, Senior Taco) and questioned adequacy of 9×18-foot spaces for varied vehicle sizes (citing his own Ford F-150 as 19 feet long). Sharna remained skeptical of staff assurance.
- Council Member Tolis (follow-up) requested Brennan Ray address concerns; Ray explained 2.0 parking spaces per unit (vs. code's 1.5 for one-bedroom, 2 for three-bedroom = 308 required), citing parking-study data from three-, five-, and seven-mile radii showing average 1.5–1.6 vehicles per renter-occupied unit, and anecdotal industry standard of 1.7–1.8. Ray clarified no intention to use commercial parking overflow.
- Council Member Brown moved to approve Ordinance 19-09 requiring catch basin construction and clubhouse design review, then requested unanimous consent (second by Council Member Spelich). Motion passed 6–1 (Council Member Sharna opposed on parking). Council Member Charnel noted the motion inadvertently omitted the ordinance number; Town Attorney Liz requested formal re-statement to include "Ordinance 19-09." After brief recess (for procedural clarification), Council Member Tolis re-made motion with full ordinance citation; Council Member Brown seconded; passed 6–1.

Medical Marijuana Hours and Delivery (Ordinance 19-14)

Applicant presentation: Staff (John) summarized request by Mark Steinmetz to amend town zoning code: extend hours from 9am–7pm to 8am–10pm (within state statutory limit of 7am–10pm); allow delivery service (state permits; town currently prohibits). Staff researched comparable ordinances: Phoenix 8am–10pm, Mesa 8am–9pm, Paradise Valley 2:30pm, others varied. No complaints on file regarding current hours. Planning & Zoning Commission voted 6–0 to recommend approval with modification: delivery hours limited to facility operating hours (8am–10pm).
Public comment: 15+ speakers over ~90 minutes.
- In support (5 speakers):
  - Council Member Spelich (during council discussion, not formal public comment): touted Steinmetz's professionalism, FDIC-insured banking relationship, secure facility design, and compassionate patient access; noted elderly and disabled residents benefit from delivery; distinguished medical from recreational cannabis; flagged upcoming recreational-legalization ballot.
  - Council Member Magazine: emphasized lack of distinction between pizza delivery (till 10pm) and medical delivery; noted Keystone project will increase customer traffic; criticized scrutiny as unfair to a legal business.
  - Faith (unidentified speaker): invoked town's healing mission and disabled/handicapped residents; proposed compromise of 10pm delivery limit with 9pm public closure; urged compassion.
  - Pam Agaloo: recovering opioid addict; contrasted painful withdrawal from opioids with medical cannabis as alternative; advocated delivery for disabled and immobile patients.
  - Doug Hebert (DEA retiree, substance abuse coalition, formal speaker): contradicted Steinmetz's claims, noting federal schedule-I classification, elevation-of-pharmacies argument (Fountain Hills pharmacies open ~70 hours/week vs. proposed 98 hours for dispensary); cited 2019 Addiction journal study linking dispensary proximity to 33% youth marijuana-use increase (2016–2018); noted illegal diversion: 1 in 5 eighth/tenth-graders, 1 in 3 twelfth-graders obtain medical cannabis from cardholders; warned of 87% THC concentrates without FDA clinical trial support; pointed out previous council promise (2017) not to return with extension requests (but applicant did, twice).
- Opposed (5+ speakers):
  - Council Member Charnel (council discussion): toured facility; acknowledged impressive security; opposed 10pm as excessive; noted no other businesses (pharmacy, retail) open 8am–10pm; reiterated previous objection.
  - Council Member Lacrone (council discussion): toured facility; shared concerns; opposed 10pm; noted only one Fountain Hills pharmacy open to 10pm (not medical).
  - Shelley Mowry: certified family recovery coach, fountain hills substance-abuse coalition; cited 2019 Addiction study, Arizona Criminal Justice Commission youth survey (33% increase 2016–2018, higher in Maricopa County and Fountain Hills 8th–12th grade); warned of diversion statistics and high-potency concentrates (87% THC, no clinical trials); called delivery a "drug delivery service" enabling diversion; urged denial.
  - Joanne Richards: family recovery coach; questioned percentage of clientele using cannabis for chronic pain vs. anxiety/depression/trauma; cited sister's Maine experience (child arrested twice after access to household medical card); described 15-year-old client in Karen rehab after three months, now in sober living; warned isolation and availability worsen substance abuse.
  - Frank Doolittle: general criticism of project completion and contractor accountability; opposed extended hours; anecdotal support for cannabis pain relief but opposition to extension.
- Neutral/Mixed:
  - Council Member Tolis: deferred to vote; noted compelling data on both sides.
Applicant rebuttal (Mark Steinmetz, oral testimony during public comment):
- Acknowledged Lacrone's earlier tour; rejected DEA retiree's elevation claims (dispensaries in Yuma/Page save travel time vs. Phoenix; Fountain Hills dispensary in "hostile" regulatory environment).
- Addressed banking (state-chartered FDIC-insured institution, rigorous cash-management reporting); cited 75K annual sales-tax revenue to Fountain Hills; emphasized all employees fingerprinted, background-checked, unmarked-vehicle delivery, zero incidents in six years of operation.
- Reframed medical necessity: evening use for pain relief and sleep medication (indica forms); data from CDC's Teen Health Assessment Risk Survey showing teen cannabis use declined where medical programs came online (17% drop first year, further drops in adult-use states); drew parallel to Prohibition-era alcohol (teen alcoholism fell post-repeal due to regulation, not underground production).
- Responded to gateway-drug claim: data shows cannabis regulation reduces methamphetamine, cocaine, heroin use among youth; black market (not dispensaries) is vector for diversion; delivery enables access for immobile/homebound patients; caregiver-card cost ($350/year) is burden alternative; state law permits 7am–10pm; virtually all Sun City dispensaries operate 7am–10pm; Arizona Dispensary Association president (Steinmetz); neighboring cities (Gilbert, Paradise Valley, Carefree) prohibit delivery, but others (Chandler, Mesa, Phoenix) permit it.
- Distributed articles on congressional cannabis policy and state deregulation progress.
Council discussion:
- Council Member Lacrone: Toured facility; personal opinion: 10pm too late; expressed concerns about accessibility ("psychologically a deterrent"); noted pizza delivery till 10pm does not deliver from 8am; only Fountain Hills pharmacy open to 10pm is non-medical; referenced own prior tour feedback to Steinmetz (rejected then, rejecting now).
- Council Member Charnel: Recalled prior council commitment not to revisit; opposed hours and delivery; gateway-drug concern ("more accessible, more children will use"); diversion ("one out of five...one out of three 12th graders"); noted no compelling reason to extend; agreed with coalition assessment.
- Council Member Magazine: Questioned why extending two hours matters if cannabis already accessible during day; emphasized Steinmetz's professionalism and state-law compliance; opposed scrutiny as unfair to legal business; noted recreational legalization likely by ballot and will obsolete these restrictions.
- Council Member Spelich: Toured facility; supports patient access; distinguishes between cannabis and recreational use; no issue with 10pm; supports delivery for immobile patients; argues market transparency (regulated vs. black market) reduces teen access; cites opiate-epidemic context; notes planning commission 6–0 support.
- Council Member Tolis: Deferred; noted compelling arguments both sides.
- Council Member Brown: No recorded statement; voted.
- Mayor Dickey: Called hearing; managed discussion; did not state personal position during council discussion.
Vote: Motion by Council Member Magazine to approve Ordinance 19-14 (extended hours and delivery); second by Council Member Spelich. Result: 5–2 rejection (or "failed," per mayor's clarification). Individual votes not stated verbatim in transcript; inferred opposition: Lacrone, Charnel. Inferred support: Magazine, Spelich, Tolis (based on tone), Brown (seconded earlier motion to close hearing). One council member status unclear from transcript.

Opposition (to Medical Marijuana Hours Extension)

Number of speakers against: 5+ (Charnel, Lacrone from council; Mowry, Richards, Doolittle, and implicit DEA retiree Hebert from public)

Main concerns:

Gateway drug and youth access: Illegal diversion via cardholders to minors; 33% spike in youth marijuana use 2016–2018 in Maricopa County; 1 in 5 eighth/tenth-graders, 1 in 3 twelfth-graders obtain cannabis from cardholders.
High-potency concentrates: 87% THC products lack FDA clinical trials; no evidence of medical benefit at such potency; risk of psychotic breaks, school failure, depression.
Violation of prior council commitment: 2017 hearing included promise not to return; applicant has requested extension three times, breaching good faith.
Community character and small-town values: Fountain Hills voters rejected medical marijuana ballot measure (4,757 against vs. 4,285 for); extended hours inconsistent with "respecting special town character" (town mission statement).
Unwarranted business favoritism: No comparable business open 8am–10pm in Fountain Hills; only one pharmacy open to 10pm (non-medical). Scrutiny justified vs. other retail.
Delivery as Pandora's box: Isolation of delivery reinforces substance-abuse patterns (seen in opioid crisis); no organized patient demand witnessed by councilmembers; alternative services (caregiver cards, transportation, other dispensaries) available.
Questionable patient justification: Applicant's stated reason (patients from Yuma/Page traveling long distance) contradicted by fact that identical products available in Phoenix at same price; applicant's Phoenix dispensary already open 8am–10pm and would serve those patients faster.

Most compelling arguments:

Shelley Mowry's pharmacological and epidemiological data (2019 Addiction study, Arizona youth survey, THC-potency research).
DEA retiree Hebert's federal-law perspective and comparative-hour analysis (98 hours vs. 70 hours average pharmacy, vs. pizza/retail norms).
Council Member Lacrone's reiteration of personal prior feedback (8am–10pm "too late") and parking-lot comparison (Walgreens, CVS, Target, Walmart do not offer 8am–10pm + delivery together).

Organized groups:

Fountain Hills Coalition (Substance Abuse Coalition): Shelley Mowry, Doug Hebert, Joanne Richards, Doug Hebert (DEA retiree, board member or advisor).

Support (for Medical Marijuana Hours Extension and Delivery)

Number of speakers in favor: 4 (Spelich from council; Magazine from council; Faith, Pam Agaloo from public)

Main arguments:

Medical legitimacy and patient access: Cannabis is ancient medicine; FDA-regulated by state Department of Health Services; patient testimonies (pancreatic cancer pain relief, chronic pain, sleep disorders).
State law and comparative cities: Arizona law permits 7am–10pm; Phoenix (8am–10pm), Chandler (9pm–10pm), Mesa (8am–9pm), Sun City (~7am–10pm); Fountain Hills discriminatory by restriction.
Data on youth effects: CDC Teen Health Assessment Risk Survey shows teen cannabis use declined post-medical-legalization in Arizona (17% drop year one); further declines post-adult-use legalization; regulated market reduces black-market diversion (opposite of gateway-drug narrative).
Operational security: Steinmetz's facility operates like bank (bulletproof glass, security equivalent to financial institution, zero incidents six years); employees fingerprinted, background-checked; no counterfeit-card incidents in two Arizona dispensaries over six years (card verified in state database every transaction).
Equity and accessibility: Immobile elderly, disabled, homebound patients need delivery; caregiver-card alternative costs $350/year and requires family burden; delivery with unmarked vehicles, restricted-hour compliance, and state oversight is legitimate accommodation.
Analogy to other retail: Target, Walgreens, CVS, Walmart open 8am–10pm (or 24/7) with over-the-counter medications; no different scrutiny applied; dispensary sales tax (75K/year) and business reputation incentivize lawful operation.
Opiate-crisis context: Cannabis as evidence-based pain alternative; states with regulated cannabis show corresponding drops in opioid deaths, methamphetamine use, cocaine use; prohibition drives black-market supply and youth access.
Professional credibility: Steinmetz's multi-state operations (Pennsylvania, Connecticut, Massachusetts, Michigan) and investor-backed company; FDIC-insured banking relationship; Arizona Dispensary Association president (industry expertise).

Most compelling arguments:

Council Member Magazine's retail-hours parity (pizza till 10pm, Target till 10pm, no scrutiny; why cannabis different?).
Steinmetz's data on teen use declining post-legalization and rising with black-market prohibition.
Faith's (public speaker's) invocation of town's healing mission and Mayo Clinic proximity (implicit elderly/disabled population).

Organized groups:

Medical marijuana industry representation (Steinmetz as Arizona Dispensary Association president).

Project Details (Keystone PAD)

Case number: Zoning Case 2019-01
Applicant / developer: Keystone Homes (Rich Ennime, founder/senior)
Attorney: Brennan Ray, Ray Law Firm
Location / address: Downtown Fountain Hills, parcel adjacent to Bashas Plaza, bounded by Avenue of the Fountains, La Montaña, Palisades, and Westby Street (catty-corner from Town Hall)
APN: Not stated in transcript
Current zoning → Proposed zoning: C2 (commercial) with Entertainment Overlay District (EO) → C2 (with overlay removal). Entertainment overlay restricted density to 8 units/acre (18-unit max). Removal enables 147-unit density under C2 standards with residential conversion.
Density / units / square footage: 147 total units (10 duplexes, 127 single-family detached), all rental. Unit mix: 46 one-bedroom (715–750 sq ft), 92 two-bedroom (~1,000–1,300 sq ft), 9 three-bedroom (~1,500–1,600 sq ft). Estimated project value: $35 million.
Changes from previous version: Site previously held development agreement for senior-living project (expired/not built); Keystone proposal is pure residential rental, not senior-restricted.
Amenities: Clubhouse, pool, corner park with sculptures, interactive seating, shade, pedestrian access (three ingress points off La Montaña, main entrances off Avenue of Fountains and Palisades); "grand paseo" internal walking area for community gathering; private rear yards for each unit; on-site parking garages and surface lot; 36 parallel spaces on widened Westby Street.
Off-site improvements: Median-cut widening at Avenue of Fountains / Town Crossing entrance; sidewalk widening and landscaping (Avenue of Fountains, Westby, Palisades); Westby Street formalization and parallel-parking spaces; coordination with ongoing traffic-circle design at Avenue of Fountains / La Montaña intersection.
Building design: Six building plans (Contemporary, Spanish, New Ranch, Modern), each with three color schemes (natural colors: grays, teals, muted tones). Gated community; facade setbacks 5–10 feet (vs. code's 25 feet for C2 non-residential-adjacent).
Target market: Millennials, seniors, long-term renters ("lock-it-and-leave-it" lifestyle).
Rental rates: $1,400–$2,200/month (estimated $3M annual gross rent; Brennan Ray cited figure; Council Member Tolis calculated ~$489K based on 147 units × $1,700 average × 12 months, suggesting lower average).

Vote Breakdown

Keystone PAD (Ordinance 19-09)

Final: 6–1
Yes: Council Members Brown, Spelich, Magazine, Tolis, plus two others (names not individually stated; inferred: Lacrone, possibly Mayor Dickey did not vote or abstained per typical mayor protocol, or cast deciding vote)
No: Council Member Sharna
Abstentions / absences: Not stated

(Note: Transcript shows six affirmative votes, one negative (Sharna); Mayor Dickey called vote but individual roll not restated post-motion.)

Medical Marijuana Hours and Delivery (Ordinance 19-14)

Final: 5–2 (rejected/failed)
Yes (Inferred): Council Members Magazine, Spelich, Tolis (implied by tone), Brown, and one unidentified
No (Inferred): Council Members Charnel, Lacrone
Abstentions / absences: Unclear; Mayor Dickey status not stated
Note: Transcript states "five to two" as final count; motion failed (did not pass). Individual votes not read aloud by name in closing tally.

Outcome & Next Steps

Keystone PAD

Approved 6–1 via Ordinance 19-09 (rezoning and Planned Area Development).
Conditions:
1. Construct catch basin per town engineer recommendation (stormwater management to coordinate with traffic-circle design).
2. Ensure compliance with Keystone development plan except as modified by council approval.
3. Ensure compliance with all town codes, standards, regulations except as specifically modified in Keystone PAD plan.
4. Review and acceptance of detailed clubhouse and amenities design by Development Services Director.
Next steps: Developer to submit Site Development Plan (SDP) and engineering drawings; coordination with town engineer on traffic-circle stormwater integration; performance bonding for public improvements (sidewalks, landscaping, utilities, drainage); potential development agreement (not yet required per staff comment); phased construction per applicant's move-in phasing plan (Phase 1 includes off-site perimeter improvements on Avenue of Fountains, Westby, Palisades; subsequent phases internal construction and residential release).
Timeline: No stated completion deadline in transcript; applicant referenced lending requirements for timely completion.

Medical Marijuana Hours and Delivery

Motion failed 5–2; no approval.
Ordinance 19-14 not adopted.
Next steps: Hearing closed; vote recorded as rejection. Applicant may reapply or seek council reconsideration (no timeline stated). Council did not schedule re-vote or continued hearing. Item effectively tabled unless applicant requests reconsideration (typical 30–90 days per Arizona municipal code, not stated here).

Flight Path Coalition (Jack Lunsford Presentation)

Outcome: Coalition forming with Scottsdale, Paradise Valley, Fort McDowell Yavapai Nation, Fort McDowell Indian Tribe leadership, and Fountain Hills; federal FAA negotiations ongoing.
Next steps: Meetings with regional FAA director expected; congressional delegation briefings (Senators McSally, Sinema; Congressman David Schweikert); elevation and flight-path modification proposals under evaluation; expected to extend "balance of year and into next year" (2019–2020+).

Controversies & Context

Parking Requirement Deviations (Keystone PAD)

Council Member Sharna raised concerns about a "major" (not "minor") deviation from parking code:

Required: 308 spaces (per town formula: 1.5 for one-bedroom, 2 for two/three-bedroom units).
Proposed: 302 spaces on-site (six-space shortfall).
Off-site: 36 parallel spaces on widened Westby Street (controversial; staff noted "overflow could go into nearby commercial parking lots," though applicant Brennan Ray denied intent to use Bashas/Senior Taco lots).
Stall size: 9×18 feet vs. code's 9×19 feet (one-foot reduction to accommodate parking stops and overhang for sidewalk access).
Staff position: Minor deviation; historical parking data from Fountain Hills rental properties (three/five/seven-mile radius) shows 1.5–1.6 vehicles per renter-occupied unit; applicant providing 2.0 spaces per unit meets or exceeds standard. Precedent: multiple Maricopa County casita-rental developments (Tucson, Queen Creek, Surprise) built with comparable ratios.
Council tension: Sharna opposed as "short-sighted"; Brown defended as acceptable based on past project experience and parking data; Magazine raised no objection. No amendment passed to restrict Westby parking from count. Parking concern did not block approval.

Medical Marijuana Hours: Town Character vs. Patient Access

Conservative objections (Charnel, Lacrone, Fountain Hills Coalition):

Town voters rejected medical marijuana ballot measure (4,757 vs. 4,285); extended hours signal municipal approval of controlled substance incompatible with town's self-image as "special," "healing" (Mayo Clinic, retiree population).
Previous council promises (2015, 2017 extensions) included implicit commitment not to seek further increases; third request perceived as breach of good faith.
Youth diversion data (33% use increase 2016–2018 in Maricopa County; 1 in 5 to 1 in 3 minors accessing cardholder supply) contradicts applicant's claims that regulation reduces youth access.
High-potency concentrates (up to 87% THC) without FDA trials raise health-risk profile beyond traditional medicine.

Progressive rebuttal (Magazine, Spelich, Tolis):

State law permits extended hours; comparable cities (Phoenix, Chandler, Mesa) allow equal or greater access; Fountain Hills' restriction is outlier, not norm.
Regulated market transparency (daily sales reporting, state database verification, zero counterfeit-card incidents) proves diversion risk manageable; black-market prohibition drives actual youth access.
Applicant's operational track record (six years, zero incidents, multi-state legitimacy, FDIC banking) merits professional treatment.
Patient compassion (immobile elderly, disabled, chronic-pain, end-of-life, sleep disorders) outweighs speculative youth-risk arguments; caregiver-card and transportation alternatives are burdensome.
Recreational legalization coming (likely 2020 ballot); distinction between medical/recreational will blur; extended-hours debate will become moot.

Unresolved tensions:

Council did not vote to table, defer, or schedule reconsideration; defeat was final for evening.
No compromise motion (e.g., 9pm hours without delivery, or delivery 8am–8pm) was offered.
Applicant threatened departure ("licensing is movable"; "don't want it to be the fountain hills license") if environment remains "hostile."

State Preemption and Local Regulatory Autonomy

Medical Marijuana:

Arizona statute (A.R.S.) permits 7am–10pm local hours; state Department of Health Services regulates cardholders, transactions, facility security.
Town ordinance more restrictive (9am–7pm); applicant challenges as unnecessary given state preemption of field.
DEA retiree Hebert countered that federal schedule-I classification limits state authority; Cole Memorandum (2014, reaffirmed by Congress 2019) merely constrains federal prosecution, not state/local regulation.
No explicit preemption analysis conducted during hearing.

Flight Paths:

FAA NextGen implementation is federal authority; towns' leverage limited to coalition advocacy with FAA regional director and congressional delegation.
Elevation concerns (ten years old, raised by Congressman David Schweikert) tabled pending flight-path resolution.

Financial Context (Addressed Separately in Revenue Hearing)

While not the focus of the Keystone or medical marijuana hearings, Council Member Tolis raised critical fiscal concerns:

Keystone's rental tax contribution (1.6%) vs. residential property tax (minimal for multi-unit); potential future conversion to fee-simple ownership would eliminate rental-tax revenue.
Town expenditure on development review and permitting without guarantee of project completion (precedent: Hilton project, Palisades/Shea, approved 2000, never built; town bore costs).
Development agreements expire; lack of completion guarantees or deed-restriction authority leaves town exposed to abandonment post-approval.

These concerns did not block vote but signaled council scrutiny of growth-at-cost-to-revenue-base model.

Duration

Keystone PAD item: ~90 minutes (staff presentation, council Q&A, applicant testimony, council discussion, public comment, vote, re-motion for ordinance citation, final vote)
Medical Marijuana item: ~120 minutes (staff presentation, council Q&A, applicant testimony, public comment ~15 speakers, council discussion, vote)
Total meeting: Not stated; likely 3–4 hours (began with roll call ~19:00, invocation, reports, flight-path presentation, Keystone, medical marijuana, public-comment on revenue, consent agenda; adjourned timing not recorded).

Other Notable Items (Brief)

Government Relations Lobbyist Presentation (Jack Lunsford): Jack Lunsford, founding director of office of government relations and external affairs at Maricopa Community Colleges (20 years), Arizona native, former Coconino County Assessor (youngest in state history), retained to represent Fountain Hills on FAA NextGen flight-path negotiations. Met with Senators McSally, Sinema; Congressman David Schweikert; Fort McDowell Yavapai Nation leadership; coordinating coalition with Scottsdale, Paradise Valley, and tribal nations to shift eastbound/westbound flight traffic east of residential areas, away from Fountain Hills. Expected 12–18 month negotiation process. Concept One (preferred modification to FAA proposal) supported by coalition; Concept Two opposed. Elevation concerns from 10 years prior tabled pending flight-path resolution.

Public Art Sculpture Acceptance (Sign Art): Council Member Magazine raised procedural concern: sculpture already installed and in ground before formal council acceptance. Staff (Ms. Goodwin, Development Services) acknowledged confusion in process, noted Public Art Committee gave tentative consent. Magazine moved approval with understanding that future public art approval process will be tightened per October 1 work session on public art policy. Approved; protocol to be revisited.

Public Safety Fee Removal (Item 8c.3): Council Member Brown moved to remove public safety fee from agenda due to legal challenges; approved. Fee hearing and ordinance not addressed in this meeting; de