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A Wild West showdown has broken out on the streets of the “West’s Most Western Town,” but it’s not of the gunslinger variety. 

Sunday Goods, a Scottsdale-based company that operates an all-natural cannabis farm in southeastern Arizona, plans to open the first medical marijuana dispensary in Old Town Scottsdale. 

The dispensary would be located in the current Club Tattoo building near Fifth Avenue and Winfield Scott Plaza where Old Town Scottsdale and downtown meet. But the proposed location has some local business owners and residents concerned about their property values, its impact on the character of the area, and the project’s proximity to a nearby preschool. 

Supporters of the dispensary note that they currently have to travel long distances to obtain medical marijuana. Erica Diloreto told the Arizona Republic that she currently has to travel to Phoenix or Tempe to get medical marijuana. “(A dispensary) would benefit patients in the area as well as the community,” Diloreto wrote in an email to the city.

There are currently no medical marijuana dispensaries between the Scottsdale Airpark and Tempe, according to a city memo. 

Sunday Goods would not only change that, but would meet a growing demand — the number of medical marijuana users in Maricopa County has increased by nearly 400% from 25,407 in 2013 to nearly 120,000 in 2018, according to the Arizona Department of Health Services.

In 2016, the Arizona Department of Health Services identified areas in the state that were home to high numbers of patients but few dispensaries. South Scottsdale was among the most underserved areas in the state, the Arizona Republic reported. 

A year later, the AZDHS held a lottery drawing of applications for medical marijuana licenses — Sunday Goods won the only license to open a dispensary in south Scottsdale. 

The city looked at possible locations for a dispensary in south Scottsdale, eventually focusing on nine downtown properties that seemed to conform to Scottsdale’s zoning rules, Jason Morris, an attorney representing the dispensary, told the Republic. 

The city’s planning commission voted 6-1 in August to recommend that the City Council approve the dispensary, but overlooked the fact that the proposed site of Sunday Goods is less than 300 feet away from the Perform To Learn preschool.

A city zoning rule states that dispensaries cannot operate within 1,500 feet of elementary schools, preschools, places of worship or public parks. 

But the agreement for the dispensary includes a stipulation that the dispensary would not be able to open until the preschool moves, city planner Bryan Cluff wrote in his report to the city council.

In order to comply with other city rules, the applicant behind Sunday Goods notified nearby residents and businesses of the project and even held an open house in February to share their plans. Cluff told the Republic that public response was overwhelmingly positive, but immediate neighbors were more negative. 

Nearby business owners submitted a petition to the city expressing their opposition to the project, saying the dispensary would “reduce property values.” 

“No developer will be interested in developing residential real estate where marijuana is dispensed,” the petition read.

Those opposed to the dispensary include Scottsdale architect Daniel Spiro and former City Councilman David Ortega, who say they oppose the project on the grounds that it fails to meet the city’s zoning and use requirements. 

Spiro, who owns a nearby building at 4260 N. Brown Ave., told the Scottsdale Independent the proposal violates the city’s General Plan because it lacks enough parking stalls.

City code dictates that Sunday Goods provide eight parking spaces, but the current application calls for only three designated stalls with five “in-lieu” spaces, according to a city memo. The in-lieu parking designation would allow Sunday Goods to simply pay a fee instead of providing the amount of required on-site parking.

Spiro also criticized the city’s planning commission for voting on the proposal when it has “not really complied” with the city’s rules.

Spiro accused the city of being “very receptive to the developer and the legal representation” and took issue with the project potentially pushing out a preschool. “They are driving a vital community institution away all for the purpose of their enterprise,” he told the Independent. 

He also says a dispensary isn’t the right fit for Old Town. “Instead of having a cohesive downtown district, that has a vision, which you are trying to make it with uniform zoning, you are inviting some questionable uses,” Spiro said. 

In a submitted comment to the planning commission, Spiro wrote that that he and his fellow property owners were more interested in “building a multistory, mixed-use midrise on our properties.”

“Together we constitute approximately 60% of the block. Our vision is consistent with the city’s plan, yet no investor or developer will consider investing in a mixed-use residential/commercial building next to a pot dispensary. A medical pot dispensary belongs in CVS or Walgreens, not in a residential neighborhood where kids grow up.”

Ortega also cited the proposal’s failure to abide by the city’s zoning rules and general plan as the reason for his opposition. “The cases are not a referendum about medical marijuana,” he told the Independent.

The City Council was supposed to hold a hearing on Sunday Goods’ request for rezoning and a conditional use permit on Oct. 1, but postponed it after Spiro and another opponent filed a legal protest of the project.

This objection means the proposal must garner support of three-fourths of the City Council, rather than a simple majority. In their legal challenge, Spiro cited a Scottsdale city code stating that a three-fourths vote is required for approval of a zoning amendment if 20% or more of the area property owners protest. Spiro says more than 20% of property owners oppose the project, but the Scottsdale Progress was unable to verify that claim.

Jason Rose, a paid spokesperson for the dispensary, told the Republic the applicant asked for a continuance in order to address the community’s concerns. “It’s hopefully going to come out of the other side a better project,” he said.

Rose cited the parking situation as one of the reasons for the postponement and said he’s confident they will resolve the issue prior to Nov 12. “We are working with the city to provide real parking spots in accordance with all city and state ordinances,” Rose told the Scottsdale Progress. “That is one reason we asked for more time, and we are confident we will do that.”

Despite the applicants’ attempts to assuage opponents’ concerns, Rose also admitted that the controversy around the project perplexed him. 

“This might be the first time someone is making a political play in favor of developers over patients,” he told the Independent. “Their claims of a supposed high-rise development plan can’t occur because of a dispensary is a real head scratcher. There are four dispensaries in and around the Scottsdale Airpark and they don’t seem to have any issues with development and redevelopment in that part of the world.”

Rose also said they conducted extensive polling before the application was filed and that the public was in favor “by an overwhelming margin.” The poll, commissioned by Sunday Goods and conducted by Public Opinion Strategies, surveyed 300 Scottsdale residents to gauge voter support for a dispensary downtown. 

Sixty-six percent of Scottsdale voters said that a medical marijuana facility near the Scottsdale Galleria was a good idea, while only 24% expressed opposition. South Scottsdale residents supported the dispensary 69% to 21%, according to the Arizona Republic.

The issue of the proposed dispensary’s proximity to Perform to Learn remains, however. Rose says Sunday Goods has a contract with the school to relocate it, but Joe Chandler, an attorney representing the owner of the preschool’s building, says the preschool operators have not received any formal offer from the applicant to move and have not given notice that they intend to move or terminate their lease. 

Whether the Scottsdale location is approved or not, one thing is clear: demand is present all across the state. Arizonans consumed 61 tons of medical marijuana product in 2018, according to the state Department of Health Services. That’s nearly 25 times the amount consumed in 2012, the first year that dispensaries operated in the state.

The future of Sunday Goods will be decided by the Scottsdale City Council on Nov. 12 and could portend future battles as Arizona continues to expand its medical marijuana program to meet the booming demand.

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