Flagstaff council approves second amendment to Milltown development agreement over objections

Flagstaff — The City Council voted 5–2 on March 4 to authorize a second amendment to the Milltown development agreement, clearing the way for the project’s developer to submit a revised site plan and to extend time limits tied to when older zoning rules may be used.

The amendment, adopted by resolution number 2025-05, lets Vintage Partners LLC seek approval for an amended site plan and preserves the developer’s ability to use zoning standards that were in effect when the original agreement was negotiated, subject to council review. Councilmember Aslan and Councilmember Spence voted against the measure.

The vote concluded more than two hours of public hearing and discussion in which residents, business owners and students packed the chamber to press competing views. Supporters, including a number of NAU students and several Flagstaff residents, said more housing is needed near campus. Opponents urged adherence to the city’s high-occupancy housing (HOH) rules, passed after the original Milltown entitlements were granted.

Kevin Finchel, deputy city attorney, outlined the legal context the city relied on in negotiating the amendment. He reminded council that the original development agreement, executed in 2018 as part of a public–private partnership that relocated ADOT and a movie theater, granted Vintage rights to build a specific site plan and to use the zoning code in effect in 2017 for a fixed period. A first amendment in 2021 extended that period to December 2025; the second amendment adopted Tuesday would clarify that, if council approves an amended site plan, the developer could still rely on the earlier code for a limited additional period while the rezoning and permit approvals proceed.

Lindsey Shuby, an attorney representing Vintage Partners, said the company had secured a development partner and wants to “right-size” the originally approved project — reducing height, overall footprint and the number of large shared-bedroom units — and return with a new site plan the council and public could review. Shuby emphasized the amendment would not bypass the rezoning or site-plan review process: any amended plan would still require public hearings and council approval.

Developer Walter Crutchfield told the council the original package was complex and took years to assemble and defend, and said Vintage has invested substantial resources. “I will not quit. I will deliver affordable housing,” Crutchfield said. He urged the council to allow the developer to pursue a revised, smaller project rather than force the original entitlement to move forward unchanged.

Opponents, including members of Friends of Flagstaff’s Future and other neighborhood advocates, argued the amendment would undermine the HOH rules adopted after the original entitlement and would permit a project that avoided the city’s current standards for unit type mix and size. Michelle James of Friends of Flagstaff’s Future said the HOH code requires a minimum share of studio and one‑bedroom units and caps the share of four‑ and five‑bedroom units; she warned that approval would “send a message that the city’s codes are not important.”

Council discussion turned on two practical questions: whether council should preserve the rule of law and local planning processes and whether the city would face legal claims under Arizona’s Proposition 207 (a state constitutional measure that allows property owners to claim compensation if a land-use change diminishes property value). Councilmember Matthews, who voted for the amendment, said denying the amendment would likely prompt the developer to file Proposition 207 claims in December when the HOH provisions would apply, potentially forcing litigation that could cost the city time and money.

Councilmember Aslan, who voted no, said he opposed amending a nearly nine‑year‑old site plan and stressed governing by rule rather than by exception. “We should govern by rule and not by exception,” Aslan said in explaining his vote.

What the amendment does and what will come next

- The resolution authorizes the city manager to execute a second amendment to the existing development agreement with Vintage Partners LLC for roughly 13 acres at 1801 South Milton Road. The amendment adds language clarifying that an amended site plan approved by council may be eligible to rely on the zoning code in effect in 2017 for a limited additional period while the developer completes rezoning and civil/permitting steps.

- If the developer returns with an amended site plan, the council will consider that site plan and any rezoning requests in the regular public hearing process; zoning and building code compliance will still be required and the council retains final discretion on approvals.

- The record shows the developer may choose instead to pursue the previously approved five‑story building entitlements and seek building permits under the existing agreement; opponents pointed out that outcome could produce the very project the HOH regulations were intended to limit.

Next steps and timelines

Vintage Partners told the council it hopes to bring an amended site plan to the council for review in August or September of 2025. If council approves an amended plan, the developer would still need to complete the rezoning process and obtain civil plan approval and building permits; some council members and staff said the December 2025 deadline for entitlement usage remains relevant for timing decisions.

The amendment passed with a 5–2 vote. Council members Becky Daggett (mayor), Miranda Sweet (vice mayor), Garcia, Matthews and House voted in favor; Aslan and Spence opposed.

Ending

Councilmembers said the matter is not settled — an amended site plan will still return to public hearings and the council will have the opportunity to weigh architectural, housing mix and parking details when the developer files formal plans. For now, the council voted to allow the developer to pursue a revised proposal that, company representatives say, would be smaller and contain more one‑ and two‑bedroom units than the previously approved plan.