Fountain Hills council reaffirms Sept. 2 action on Park Place permits, directs attorney to negotiate revised development agreement

At a special meeting the Fountain Hills Town Council voted 6-0 to reaffirm its Sept. 2 decision to allow the developer of Park Place to renew previously approved building permits under the town’s 2018 building code, subject to renegotiation of the development agreement. The council later directed the town attorney to send a draft revised development agreement to the relevant parties and to negotiate a final agreement for future council action.

The council’s actions followed a staff timeline and public comments showing a multi-year project history, expired permits and a change to the town’s adopted building code. Town staff member John Wesley summarized the chronology, saying the council originally approved the Park Place development agreement on June 16, 2016, that site-plan applications for phases 2 and 3 were submitted in late 2021 and that permits for phase 2 and phase 3 were approved but not issued because fees were not paid. Wesley told the council that the approved permits are valid for 180 days unless paid for or renewed, and that unresolved fees meant those approvals expired in March 2023.

Developer representatives told the council they considered recent staff changes, redlines to a proposed revised development agreement and questions about ownership to be obstacles to moving the project forward. Developer Bart Shea argued the estoppel certificate obtained in July 2023 confirmed the development was “in full force and effect” at that time and contended the project was therefore eligible to proceed under the previously approved agreement. Cecil Yates, another project representative, also emphasized that the 2023 estoppel “confirmed compliance.” The town attorney and staff disagreed that the estoppel alone resolves current permitting issues because the development agreement and permits have since expired and the town’s building code was updated.

Council discussion focused on three distinct items: (1) the factual timeline and status of permits and ownership, (2) whether to affirm the council’s Sept. 2 vote that allowed permit renewals under the 2018 code pending a renegotiated development agreement, and (3) whether to authorize the town attorney to circulate and negotiate a revised development agreement. Council members asked staff to clarify whether the town had renegotiated the agreement with any buyer or financer (staff said it had not), why some submittals required additional review, and what legal exposure the town might face if it left deadlines unchanged. Town staff explained that the town adopted newer building codes (replacing the 2018 code with the 2024 code) to take effect Sept. 1 and that the Sept. 2 council action was intended to give Park Place a limited benefit under the older code in exchange for entering an updated development agreement.

The council first voted to affirm its Sept. 2 action (motion passed, roll call 6-0). Later in the meeting, after a brief executive session, the council voted 6-0 to direct the town attorney to send the draft redlined development agreement to the relevant parties and to negotiate a revised development agreement for later council consideration. Those are procedural votes: the council did not approve a final, signed development agreement at the special meeting; it authorized staff and legal counsel to continue negotiations and to return to council with a proposed document for approval.

Key clarifying details provided at the meeting included: the permits were approved but not issued because fees were unpaid and approvals lapsed (expired in March 2023); approved-but-unissued permits remain valid only for limited periods (staff cited 180 days absent payment or renewal); staff identified an estimated developer cost to update plans to the 2024 code that the developer has described as about $1.5 million; and the town and developer had previously executed an estoppel certificate dated July 17, 2023, intended to record the project’s status for lenders at that point in time but not to extend or revive permits automatically.

What the council decided was procedural direction, not final contract approval. The council’s votes reaffirmed prior council action on permitting and authorized the town attorney to circulate and negotiate a revised development agreement. The council did not sign a new development agreement at this meeting; staff said any finalized agreement would return to the council for formal approval.

Next steps: the town attorney will send the draft redlined agreement to the parties the council identified, negotiate revisions with the developer and property owners, and return a proposed final agreement for council consideration. The council and public asked staff to make ownership and financing documents available to clarify who speaks for the property during negotiations.