Sedona City Council overturns P&Z rejection, Sedona Rouge expansion gets green light

By Tommy Acosta

SEDONA, AZ (November 3, 2009) - The Sedona City Council at its Oct. 27 meeting gave a “thumbs up” for an expansion of the Sedona Rouge Hotel and Spa.

The approved expansion allows the building of a pavilion spa and a 32-unit lodging facility in three-separate guest villas on 1.6 acres of land behind the hotel, bordered by Goodrow Lane and Rodeo Road. The project will be called the Mahdia Villas at the Sedona Rouge.

In a 6-1 vote, with Councilman Dan Surber voting against, the council approved the development of the project and with a second 6-1 vote, with Councilman Surber voting against, approved a zoning change from RS10 (single family residence) to L (lodging).

In a third 6-1 vote, with Councilman Surber again voting no, the council overturned a decision by the Sedona Planning and Zoning Commission at its Sept 1 meeting to deny the expansion.

City staff had originally recommended approval of the project with certain conditions applied to the development and land use agreement. P&Z did not agree with staff and rejected the project at their Sept. 1 meeting, citing a number of problems with traffic, the proposed connection between Goodrow Lane and Rodeo Road not being wide enough, and lack of affordable housing units. The applicant had to successfully appeal the P&Z decision in order to go forward.

The council also voted to extend the zoning timeline indefinitely to give the applicant time to raise funds needed to complete the project providing the applicant provides vehicular and pedestrian access from Goodrow Lane to Rodeo Road through the Rouge property within two years. The vehicular access between the two streets would be a 26-foot wide two-way road.

Architect Evan Cross of Pahana Known Architects argued for the approval of the project and the zoning change at the Sept. 1 P&Z meeting and at the Oct. 27 council meeting. Mr. Cross’s firm built the Sedona Rouge and Spa.

Mr. Cross said the Rouge has been a great asset to Sedona, drawing visitors who help maintain the economy, pays hundreds of thousands of dollars to the city in bed taxes and provides a great place for locals to gather, dine and interact. He said the Rouge pulled out all the stops to come up with a viable solution that would work for them and the city.

“We’re doing this because we believe in Sedona,” he said. “We took a long-hard road to come up with the best solution. We knew it was a Special Planning Area. We took a look at the community plan. We tried to hit every point in the community plan.

He said the new project would generate close to a quarter million dollars annually in bed taxes for the city. He said the proposed design of the project will encourage people to stay longer.

“There will be an economic benefit to the city of $240,000 in annual bed tax,” he said. “The idea is to capture above three-day stays. People will visit more restaurants and galleries. People don’t need to feel they have to leave Sedona.”

Mr. Cross said it was the will of the applicant to do all in their power to maintain the character of Sedona reflected through the new project. He said they needed the help of the city to make it happen.

“We are looking for a partner here to preserve the small-town character of Sedona and maintain vibrant economic conditions,” he said.

Jim Apple, a partner in the Sedona Rouge, pleaded with the council to give him time, by extending the zoning time limit, to raise enough cash to successfully launch the project.

“Our intent, based on your acceptance, is to get it done and get it done well,” he said. “Right now there is no investment available. All projects are underwater in these economic times. We want to make the connection.”

He said a two-year zoning time line was not enough.

“We have already spent $500,000 on this project,” he said. “We have made a sizeable contribution to the community. We are not a big corporation from New York City here coming to plunder. We can’t go forward with an artificial time line. We don’t want to have to go back to the original zoning when we can build six housing units right now. We would need four years and a possible four-year extension after that.”

Community Development Director John O’Brien said due to the economy a two year time limit would not suffice.

“A four year time limit would be OK, given the economic times,” he said. “The council can give whatever extension it wants.”

Councilor Pud Colquitt said she was in favor of a permanent zoning change, citing the Rouge's track record in the community.

“I personally would like to give them a permanent zone change,” she said. ‘We have a project that potentially can bring income to the city. They’ve been good neighbors. I’m not a bit concerned about giving them a permanent zone change. It is a give and take. We’re getting half a million [dollars] in revenue.”

Councilor Nancy Scagnelli raised concern the project did not address affordable housing requirements adequately, as did Councilman Dan Surber.

The applicant offered to open two guest rooms at the hotel to staff members as affordable housing, however, Councilor Scagnelli wanted assurance they would be real housing units rather than just hotel rooms.

“This is a great project, “she said. “But what about the housing units? I’ve seen hotel rooms. Are you going to put a kitchen against the wall?”

Rouge General Manager Ed Conway said the rooms would be more than adequate considering the many amenities that would come with it for the tenant.

“They would be living in a hotel with a swimming pool, fitness center and room service,” he said. “It’s a sweet deal.”

Sedona Chamber of Commerce President Jennifer Wesselhoff spoke in favor of the project, stating it would be a benefit to the community.

“This is an opportunity to strengthen the business community, expand our tax base and strengthen the community,” she said.

Jim DeGeorge, a homeowner representing other homeowners in the vicinity of the project, said they would like to see the project approved not just because of its merits but the possibility of a less desirable project being put there in the future.

“They have been good neighbors,” Mr. DeGeorge said. "Since it is a Special Planning Area we want a good use for it. If the project does not go through it leaves the specter of something else being put there. We do want our neighbor to retain high quality.”

Sedona resident Mike Ward cautioned the council not to override the decision of the Planning and Zoning Commission to deny the project.

“There is no question they have been good neighbors,” he said. “The council should think long and hard about overturning the decision of the commission.”

Resident Dr. Dennis Raynor criticized the Mid Eastern flavor of the project’s architecture.

“What might be good for Tunisia does not work for Sedona,” he said. “If they can’t make it work, too bad. This is doing nothing to help the people of Sedona.”

At one point during the meeting a recess was called to allow the applicants, council and staff time to work out a workable deal, resulting in the applicant agreeing to build the pedestrian and vehicular access through the property linking Goodrow Lane and Rodeo Road within a two-year time frame in exchange for a permanent zoning change.

Councilman Mark DiNunzio complimented the effort by all parties to come to an agreement.

“Reminiscing over a couple of points and guidelines is not a substitute for good judgment,” he said. “The parties tonight wrestled with solutions to create a win-win situation. It was thought through. A lot of energy and love was put into it. Well done.”

Mayor Rob Adams, prior to the vote, laid the cards on the table that council had a serious decision to make and there would be consequences if a wrong one was made.

“We can’t vote 70 percent yes and 30 percent no,” he said. “This has been designated a Special [Planning Area]. This means highest and best use is envisioned there. We need to understand that. If the developer doesn’t do it and it's sold to another developer something we don’t want could be put there. The Sedona Rouge has a good track record.”