Prescott Lakes master plan debate centers on water cap, density transfers and who approves projects

City of Prescott staff and council held an extended discussion on March 11, 2025, about the Prescott Lakes planned-area development (PAD), the 2004 amended and restated development agreement and how the document ties water allocation to dwelling-unit density. The session focused on legal definitions in the development agreement, the city’s committed water, and whether future housing proposals require council review.

City attorney Joe Young opened the discussion by summarizing the contract terms. He said the development agreement defines “approved density” at 3,504 dwelling units and records the city’s committed water at 2,718 units. Young noted that, because portions of required final plats were not recorded on schedule, the agreement reduced the maximum permitted density to 3,154 units under the contract’s terms.

“By definition in the agreement, approved density is 3,504,” Young said while explaining how a failure to convert preliminary-plat units led to a 350‑unit reduction in approved density.

Public works director Gwen Rohich explained how the city tracks the water tied to dwelling units. She said the 2,718 figure was assembled from the preliminary plats submitted to the Arizona Department of Water Resources (ADWR) and that the city’s internal tracking treats water as attached to dwelling units; nonresidential uses in Prescott Lakes were tracked separately and generally do not consume dwelling‑unit water allocations in the same way.

Chelsea Walton, community development director, summarized how the PAD and the land-development code intersect: the PAD on the zoning map signals that a project may be governed by a master plan and development agreement in addition to the underlying zoning. She said many Parcels in Prescott Lakes were assigned underlying business or residential zoning in the 1990s and early 2000s; that zoning still governs what can be built unless the master plan or agreement is formally amended.

Staff explained available water and density in practical terms. Rohich said that, as of the meeting, roughly 2,093 dwelling units had already been approved or constructed under the 2,718 allocation, leaving about 625 allocations available for new single‑family or multifamily dwelling units without additional water being brought to the city. The agreement also includes a clause that could allow up to 786 additional units if developers obtain and dedicate extra water, but staff said the developers have not exercised that option and that the city is under no obligation to provide water beyond 2,718.

Young and Rohich stressed that certain actions in the development agreement — for example, density transfers — can be done only by parties specifically enumerated in the contract, not unilaterally by the city. That point drew repeated questions from council members about what staff can and cannot approve administratively.

Council and staff discussed how project approval would proceed for new proposals in the PAD. Walton said the city’s land-development code gives the community development director discretion to require neighborhood meetings and to refer certain site plans to the Planning & Zoning Commission for a courtesy or limited review; she proposed notifying council when staff exercises that discretion. Walton also said the city could provide additional transparency by asking applicants to hold neighborhood meetings and by providing council with informational briefings even when the code does not require formal P&Z or council review.

Council members were split on the right level of review. Councilmember Reussing and Councilwoman Freeworth argued for stronger notice and for opportunities for council and residents to weigh in before staff issues administrative approvals. Councilman Gamboge and the mayor pro tem said that if a project technically conforms to the code and development agreement, discretionary reviews should be framed as informational and educational so neighbors understand limits on their ability to impose changes.

Public comment included two speakers from the Prescott Lakes community. Joe Moore, a member of the Prescott Lakes Community Association board, urged continued engagement and questioned the city’s past communications; he said community members support “responsible growth” and asked that the city and the developer work to resolve disputed interpretations of density-calculation methodology. Jim Gehring, another resident, said his group had provided a detailed memo and asked staff and counsel to review it and reconvene because the parties remained far apart on key contract interpretations.

Staff did not propose amending the development agreement during the session. Instead, the city described how it currently interprets the contract: water is committed at 2,718 dwelling-unit equivalents; approved density is defined in the agreement and has been adjusted per contract terms to 3,154; and density transfers and conversion of preliminary plats are rights held by the developer parties enumerated in the contract. Staff said they will return with more detail and asked for council guidance on whether the city should adopt clearer internal policies for future development agreements (for example, attaching water to unit counts or building expiration clauses into long-running DAs).

Next steps: staff will continue to engage stakeholders, review the community’s memo, and bring options for increased transparency and possible code amendments back to council for direction.