Planning and Zoning Commission approves downtown overlay, increases allowable residential density to 50 units/acre

The Fountain Hills Planning and Zoning Commission on June 9 recommended approval of Ordinance 25-02, a proposed downtown overlay intended to consolidate existing overlays, encourage mixed use and residential development, and simplify rules for temporary uses and encroachments, the commission’s director said.

The ordinance matters because it rewrites how the town regulates the Avenue of the Fountains and adjacent blocks — combining the entertainment and planned shopping plaza overlays, increasing by-right residential density, and changing which ground-floor uses are permitted close to the avenue. Those changes aim to increase downtown foot traffic, create jobs and make it simpler for property owners and developers to understand allowable uses, Director John West told the commission.

The draft ordinance divides the downtown overlay into three districts: an Avenue District (focused on active ground-floor uses), a Business District, and an Innovation District north of Palisades. Among the principal elements discussed by staff and commissioners were:

- Ground-floor uses: The Avenue District would preserve a wide list of active uses on ground floors but limit some office uses within 50 feet of avenue street fronts. Commissioners ultimately voted to remove a hard restriction on ground-floor uses on the avenue and rely instead on other tools (see action below).

- Residential density: Staff described increasing by-right residential density from a current 8 units per acre to 30 units per acre in the draft, and said staff could support up to 45. After discussion, the commission voted to increase allowable residential density to 50 units per acre to align north and south of the avenue.

- Special use permits (SUPs): The draft kept SUPs as a mechanism for uses not permitted by right. Staff noted an existing front-yard patio SUP option that reduces fees and notice requirements and suggested a similar streamlined SUP could be considered to ease conversions to certain ground-floor uses.

- Build-to line and setbacks: The draft would require roughly 70% of a building frontage to be within 5 feet of the front property line to create an urban street wall. Commissioners asked staff to add exceptions when recorded easements or plat setbacks force buildings back.

- Parking and Plat 208: Staff presented analysis showing large corner lots could generate large on-site parking needs (using Chase Bank as an example, a hypothetical single-story commercial use could require about 290 parking spaces; a full build-out of five large corner lots could demand more than 1,300 spaces while about 2,500 spaces exist in the area overall). Staff recommended retaining the current parking rules and the existing 50% parking reduction option that lets qualifying lots rely on Plat 208 shared parking, rather than eliminating on-site parking requirements entirely.

- Boundary adjustments: Staff proposed removing a complex, constrained corner parcel (the former Washington Federal Building area) from the Avenue District and placing it in the Business District because of its lot division, building size and limited parking.

Small business owners and property owners spoke during public comment opposing strict ground-floor restrictions. Dori Wittrick, owner of RE/MAX and two buildings on the Avenue of the Fountains, said she purchased her buildings as office/retail properties and that converting aging structures to restaurant use often requires costly electrical and plumbing upgrades she cannot reasonably make: "I didn't purchase restaurant buildings...that is not an investment that can be made in those old buildings that make sense for anybody," Wittrick said.

Roger Isaacs, a local property owner and frequent meeting attendee, urged caution and said other cities had pursued incentive-based approaches rather than restriction. "Downtown Scottsdale did the opposite — they told entrepreneurs if you want a liquor license, this is where you need to be," Isaacs said, arguing that incentives can concentrate entertainment venues where the town prefers them.

After extended discussion, Commissioner Proctor moved to recommend approval of Ordinance 25-02 with modifications summarized by staff: increase residential density to 50 units per acre; remove the ground-floor use restriction on the Avenue; revise the Avenue boundary to exclude the identified corner parcels; keep existing parking rules (including the 50% Plat 208 reduction) rather than waive parking requirements; and adjust build-to-line language to recognize easements and recorded setbacks. The motion passed on a roll-call vote, 6-0.

The commission directed staff to incorporate the changes discussed, to clarify SUP fees and procedures if the commission later wants a streamlined SUP option, and to return the revised ordinance to the Town Council through the regular review process.

Votes at a glance: Ordinance 25-02 (Downtown Overlay) — Motion to recommend approval with modifications described above; mover: Commissioner Proctor; second: not specified in the record; vote: 6-0 (all aye); outcome: recommended for Council consideration. Approval of minutes (April 21 and May 12, 2025) — Motion to approve; vote recorded as 6-0; outcome: approved.

The commission also left parking policy largely unchanged for now, citing staff analysis that fully eliminating on-site parking requirements could overburden shared parking resources. Commissioners said they expect to revisit parking if retail and restaurant demand increases in the future.