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LLC v. City of Phoenix

Supreme Court of Arizona

August 10, 2017

Pawn 1st, LLC, an Arizona limited liability company, Plaintiff/Appellant,
v.
City of Phoenix, a political subdivision of the State of Arizona; Board of Adjustment of the City of Phoenix; and Bob Ford; Emilio Gaynor; Patrick Paul; Alex Tauber; Yvonne Hunter; Bettina Nava; and Emily Ryan, as members of and constituting the Board of Adjustment of the City of Phoenix, Defendants/Appellees, William Jachimek dba Central Pawn, Real Party in Interest/Appellee.

         Appeal from the Superior Court in Maricopa County The Honorable Lisa Daniel Flores, Judge No. LC2010-000701

         Opinion of the Court of Appeals, Division One 239 Ariz. 539 (App. 2016) VACATED.

          Thomas M. Baker, Baker & Baker, Attorney for Pawn 1st, LLC

          Brad Holm, Phoenix City Attorney, Les S. Tuskai (argued), Paul Li, Assistant City Attorneys, Phoenix, Attorneys for City of Phoenix, Board of Adjustment of the City of Phoenix, Bob Ford, Emilio Gaynor, Patrick Paul, Alex Tauber, Yvonne Hunter, Bettina Nava and Emily Ryan Claudio E. Iannitelli, John C. Marcolini (argued), Cheifetz Iannitelli Marcolini, P.C., Phoenix, Attorneys for William Jachimek dba Central Pawn

          Nicholas J. Wood, Adam E. Lang, Brianna L. Long, Snell & Wilmer, L.L.P., Phoenix, Attorneys for Amicus Curiae American Planning Association, Arizona Chapter

          JUSTICE LOPEZ authored the opinion of the Court, in which CHIEF JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, and JUSTICES BRUTINEL, TIMMER, BOLICK, and GOULD joined.

          OPINION

          LOPEZ, JUSTICE

         ¶1 This case concerns the standards a municipal zoning board applies in considering an application for a zoning variance. We hold that to obtain an area variance, an applicant must show that strictly applying a zoning ordinance will cause "peculiar and exceptional practical difficulties" that deprive a property of privileges enjoyed by other similarly zoned properties. We also clarify that the applicant's desire to use the property for purposes allowed on other similarly zoned properties does not in itself constitute a self-imposed special circumstance justifying denial of an area variance.

         BACKGROUND

         ¶ 2 The dispute here concerns the City of Phoenix Board of Adjustment's (the "Board") grant of a variance on a parcel of land (the "Property") at the southwest corner of McDowell Road and 32nd Street in Phoenix. The area in which the Property sits is zoned as a "Commercial C-3 District-General Commercial." Such districts have 141 specific permitted uses plus all uses permitted in properties zoned C-1 and C-2, and several residential uses. C-3 districts are designed to provide areas for "intensive commercial uses." Phx., Ariz., Zoning Ordinance § 624(A) (hereinafter "Ordinance").

          ¶3 The Property boasts a conspicuous history. For many decades, it was home to an "adult theatre" operated under various names. In 1973, the City of Phoenix completed an eminent domain action that altered the Property's dimensions and resulted in several unique characteristics, all of which limited its commercial viability. First, the action reduced the Property to only 12, 000 square feet, smaller than any of the twelve surrounding C-3-zoned corner parcels. Second, it eliminated the frontage area around the building on the Property, resulting in its direct abutment of a public sidewalk. Third, it restricted parking spaces.

         ¶4 In January 2010, the Property's owners evicted their tenants, discontinued the Property's use as an adult theatre (a non-conforming use), and leased the Property to William Jachimek, doing business as Central Pawn, with an option to purchase. When Jachimek entered the lease, he intended to operate a pawn shop. A pawn shop is a permitted use in a C-2-zoned parcel, provided the building's exterior walls are at least 500 feet from a residential district and the owner obtains a use permit from the zoning administrator. Jachimek applied for both a use permit for his pawn business and, because the Property is within 500 feet of a residential district, a variance from the 500-foot residential setback requirement.

         ¶5 After the zoning administration hearing officer denied his applications, Jachimek appealed to the Board. At the Board hearing, Pawn 1st, LLC ("Pawn"), a competing pawn shop, opposed the variance. The Board conditionally approved the variance, requiring Jachimek to operate the pawn shop only during specified hours, to not buy or sell guns or pornography, and to apply for building permits for a promised remodel of the building within one year. The Board's minutes from its July 1, 2010 meeting memorialize its findings:

[S]pecial circumstances . . . appl[y] to the land, namely the unique nature of the discontinuance of the non-conforming use on the property [the adult theatre use], the fact that it was substantially impacted by prior [eminent] domain activities in a manner that was dissimilar to other properties in a reasonably close radius, including setbacks, and the fact that there [is] less than 12, 000 total square feet available and there [are] restrictive parking requirements, that these special circumstances were not created by the owner or applicant, and were rather created in part by growth in the city itself, that it was necessary for the preservation and enjoyment of substantial property rights given the restrictions and the property and current dormancy of any other business on the site, this ...

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