The Fountain Hills Town Council on Monday closed public comment and voted to continue action on a new downtown overlay district after residents raised concerns about proposed residential density.

Planning staff described the new Chapter 27 downtown overlay as a consolidation of two existing overlays and an expansion north of Palisades. The ordinance would prioritize active ground-floor retail, restaurants and entertainment, allow residential on upper floors and permit staff approval for certain outdoor entertainment. Staff clarified the ordinance uses a maximum of 35 units per acre on upper floors (not 350), and said the Innovation District north of Palisades would be expanded to allow employment uses, including bioscience-type activities.

Residents at the public hearing urged restraint on residential density. "You can't move around the Melrose and Fairfax area anymore," resident Shelby Blecker said, warning that 35 units per acre would make Fountain Hills lose its small-town feel. Larry Myers, a 44-year resident, said he supported economic development but urged the council to reduce density toward existing 8 units per acre and preserve land for businesses. Crystal Kavanaugh said wholesale rezoning could allow apartment developers to consolidate parcels, and noted that more than 300 apartments already are approved in parts of the target area.

Several council members pressed staff on the scope of the night's action. Planning director John said the council was being asked only whether to remove the current two overlays and apply the new overlay; any changes to density limits in Chapter 27 would require separate action and additional Planning & Zoning review. Councilmember Earl said he could not support the overlay as presented and preferred reducing the density to 16 units per acre.

Vice Mayor Skillicorn moved to continue the hearing until after the council retreat to allow time for additional consideration and possible amendments; the motion was seconded and carried 5–2 by roll call. Council members emphasized that continuing the hearing leaves existing overlays and zoning in place until the council takes future action.

The council directed staff to return with options and potential amendments developed in consultation with Planning & Zoning; no ordinance changes were adopted at the meeting.