Center Bay Gardens, L.L.C. v. City of Tempe City Council

• Decision Date: 30 January 2007
• Docket Number: No. 1 CA-CV 05-0460.,1 CA-CV 05-0460.
• Citation: 214 Ariz. 353,153 P.3d 374
• Parties: CENTER BAY GARDENS, L.L.C., an Arizona limited liability company; Wood River University Square, L.L.C., an Arizona limited liability company; University Pointe Limited Partnership, an Arizona limited partnership, Plaintiffs/Appellants, v. CITY OF TEMPE CITY COUNCIL; City of Tempe, Arizona, a municipal corporation; 1010 E. Lemon, L.L.C., as successor in interest of University Mobile Home Park, L.L.C., Defendants/Appellees.
• Court: Arizona Court of Appeals

153 P.3d 374

214 Ariz. 353

CENTER BAY GARDENS, L.L.C., an Arizona limited liability company; Wood River University Square, L.L.C., an Arizona limited liability company; University Pointe Limited Partnership, an Arizona limited partnership, Plaintiffs/Appellants, v. CITY OF TEMPE CITY COUNCIL; City of Tempe, Arizona, a municipal corporation; 1010 E. Lemon, L.L.C., as successor in interest of University Mobile Home Park, L.L.C., Defendants/Appellees.

No. 1 CA-CV 05-0460.

Court of Appeals of Arizona, Division 1, Department A.

January 30, 2007.

As Amended February 6, 2007.

Gammage & Burnham, P.L.C. By Cameron C. Artigue, Phoenix, Ellen M. Van Riper, Phoenix, Co-Counsel for Plaintiffs/Appellants.

Tempe City Attorney's Office By Marlene A. Pontrelli, Clifford L. Mattice, Janis L. Bladine, Tempe, Attorneys for Defendants/Appellees Tempe.

Richardson & Richardson PC By William R. Richardson, Wilford R. Richardson, Mesa, Attorneys for Defendants/Appellees 1010 E. Lemon L.L.C.

OPINION

BARKER, Judge.

¶ 1 We address in this opinion the issue of standing as applied to those seeking to challenge zoning variances granted by a city council to an adjacent property owner. For the reasons that follow, we reverse the trial court's decision finding a lack of standing in this case.

I.

¶ 2 Plaintiffs-Appellants Center Bay Gardens, L.L.C., Wood River University Square, L.L.C., and University Pointe Limited Partnership, (collectively "Center Bay") each own one of three apartment complexes on East Lemon Street in Tempe. The apartment complex that is the subject of the proposed development is also on Lemon Street, directly across the street from Center Bay's apartment complexes. The development proposal for the subject property is for a mixed-use development that would include four stories of housing above three levels of parking, two of which would be underground. Some retail space would be built at street level. A mobile home park currently sits on the subject site.

¶ 3 In April 2003, Meyer Residential, L.L.C. submitted three applications to the City of Tempe regarding the property. One, designated ZON-2003-09, sought to change the zoning on the property from R-4 (multi-family residential) to MG (multi-use general district). A second application, GEP 2003.46, was for a general plan amendment, and the third, SPD 2003.35, sought a preliminary and final planned area development with seven zoning variances and a use permit. On July 8, 2003, Tempe's Planning and Zoning Commission held public hearings on the three applications. Representatives of Center Bay expressed their opposition and concerns both at the hearing and in an earlier letter forwarded to the Commission. The Commission unanimously recommended approval of all three applications to Tempe's City Council.

¶ 4 The Tempe City Council held a hearing on July 17, 2003, on the general plan amendment and a second hearing on August 14, 2003, on all three applications. Representatives of Center Bay appeared at the hearings and voiced opposition to the applications. Center Bay also submitted letters to the City Council outlining its objections. On August 14, 2003, the Tempe City Council unanimously approved all three applications.

¶ 5 On September 4, 2003, Center Bay filed a special action complaint against the City of Tempe Board of Adjustment, the City of Tempe, and Meyer Residential. Count one of the complaint asserted that the granting of the variances was arbitrary, capricious, and an abuse of discretion.¹ Counts two and three sought declaratory judgments that the City Council had failed to make findings required by law before granting the variances and acted in excess of its authority. Count four sought a declaratory judgment that the zoning change from R-4 to MG constituted illegal spot zoning. Count five sought a declaratory judgment that Tempe's existing general plan was null and void because it had not been ratified by public vote and that therefore the general plan amendment approved by the City Council was also null and void.

¶ 6 In November 2003, University Mobile Home Park, L.L.C. ("UMHP") moved to intervene in the action, explaining that it owned the subject property and that the original defendant, Meyer Residential, L.L.C., had failed to fulfill its purchase obligations and no longer had any interest in the property. Intervention was granted. In June 2004, UMHP moved to dismiss counts four and five, asserting that Center Bay lacked standing to challenge the City of Tempe's zoning change and general plan amendment. UMHP did not challenge standing as to counts one through three, dealing with the variances. UMHP argued that, to have standing, Center Bay was required to demonstrate a particularized injury beyond general economic or aesthetic losses and greater than any injury suffered by the community. UMHP argued that Center Bay had not articulated any particularized harm it would suffer separate from the effects on the community and that therefore Center Bay lacked standing to challenge the Council's decision. Center Bay asserted that, because of the proximity of its property to the development, it would be particularly affected by the development. Center Bay acknowledged that its objection to the development was economically motivated but also argued that it would suffer special damage because of the increase in the number of dwelling units per acre, the lack of setbacks and landscaping, the height of the proposed structure, and the apparent intent to change the character of the neighborhood through development like the proposed project.

¶ 7 The trial court granted UMHP's motion to dismiss. It found that Center Bay had no standing on the specified counts because it did not claim a particular injury other than general economic or aesthetic losses. The trial court entered judgment dismissing counts four and five on August 26, 2004. Center Bay appealed the court's ruling. This court affirmed. Center Bay Gardens, L.L.C. v. City of Tempe City Council, 1 CA-CV 04-0699 (Ariz.App. Aug. 16, 2005) (mem.decision) ("Memorandum Decision").

¶ 8 On March 30, 2004, while the first action was proceeding, UMHP submitted to the Tempe City Council another application, designated SPD 2004.29, for a preliminary and final planned area development with five variances for the same property with a new developer, JPI Apartment Development, L.P. The proposed project was essentially the same as the first. The requested variances were five of the seven sought in the first application.

¶ 9 Tempe's Planning and Zoning Commission held a public hearing on the application and unanimously recommended its approval to the City Council. The Tempe City Council held two hearings on the application and also unanimously approved the application. At each of the three hearings, Center Bay addressed the Commission and voiced its concerns about the project. Center Bay stated that its concerns included those raised as to the first project: the increase in density, the increase in building mass, and the lack of landscaping and setbacks. Center Bay also submitted letters detailing its objections to the project.

¶ 10 In July 2004, Center Bay filed another special action complaint against the Tempe City Council, the City of Tempe, and UMHP ("Appellees"),² challenging the Council's decision granting the planned area development and five variances. A subsequent amended special action complaint asserted that the City Council lacked the authority to approve the variances and that if it had the authority its actions were arbitrary, capricious, and an abuse of discretion. The complaint further sought declaratory judgments that the City Council failed to make requisite findings, that the City Council lacked the authority to grant one of the variances, and that the City Council lacked the authority to substitute itself for the Tempe Board of Adjustment for the purpose of granting the variances.

¶ 11 In addition to other arguments, Appellees asserted that Center Bay lacked standing to challenge the decision of the City Council to grant the variances and asserted that the prior decision was the "law of the case." Center Bay argued that its amended special action complaint adequately pleaded special damages sufficient to establish standing to maintain the challenge. Specifically, Center Bay relied on its allegations that it would be specially damaged because it owned property adjacent to the proposed project and the value of its property and the quiet use and enjoyment of the property would be compromised if the project were constructed. Center Bay based this claim on the lack of setbacks for the proposed structure, the building mass and height, the lack of landscaping, and the density of the project. Center Bay also alleged that its property would be at an economic disadvantage because it did not enjoy the same land use entitlements granted to the project, and that because its property would directly front the project its apartment units would be less desirable because of the lack of setbacks and landscaping.

¶ 12 In November 2004, the trial court granted the parties' request to consolidate the remaining counts in the first case with the second special action. The trial court granted Appellees' motion to dismiss. The trial court did not base its ruling on the law of the case doctrine. It found that Center Bay's claimed damages were not specific and could be categorized as generalized economic or aesthetic effects for which standing was not appropriate.

¶ 13 Center Bay appealed. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") § 12-2101(B) (2003).

II.

¶ 14 The trial court's decision in this case, although a ruling on a motion to dismiss a special action petition, was in the nature of a summary judgment. In determining that Center Bay lacked standing, the court relied on the existing record made before the City Council. We therefore treat this matter as a summary judgment. Blanchard v. Show...