The Sedona City Council declined to enter into a development agreement with BCT Sedona Multifamily LLC, a housing project set up by philanthropist Basil Maher, to build a 54-unit affordable housing project at 60 Goodrow Lane during its July 9 meeting.

Council members expressed that Maher’s proposed 10-year restriction on affordability for half the units, proposed 30-year restriction on any of the units becoming short-term rentals and willingness to self-fund the possibly $30 million cost of the project did not provide the city with sufficient benefit to warrant entering into a formal agreement to grant the requested code exemptions.

Instead, council directed staff to proceed with design review on the “understanding” that exceptions would be requested later.

54 Units for Families

The 60 Goodrow project would construct 54 housing units in seven buildings on 2.8 acres adjacent to The Wilde Resort and behind the planned Alkemista Meadery. Thirty-six units are planned as a combination of one-, two- and three-bedroom apartments, with the remainder intended to be townhomes. Maher estimated the cost of the project at between $20 million and $30 million, which will include the cost of the road planned through the property to connect Contractor’s Road with Bennett Lane.

“Only DIGAH [Development Incentives & Guidelines of Affordable Housing] policy direction is being sought today,” Housing Coordinator Jeanne Frieder told the council, explaining that the project will still need to go through the normal development review process and approval by the Planning and Zoning Commission. “As indicated by City Council at the June 12 work session, staff was directed that when projects do request [Land Development Code] exceptions, that the item may come before council for a policy discussion prior to development review … The procedure tonight will minimize the potential of needing to make significant changes at a later date.”

Maher requested the council approve two exemptions, which would allow a setback of 17 feet instead of 20 feet for one building and building heights ranging from 33 to 42.5 feet, greater than the height of 30 feet allowed by DIGAH guidelines, to enable parking to be placed underneath the buildings and preserve open space.

“In order to get an extra eight feet of height, BCT would be required to dedicate seven of these units affordable,” said Maher’s attorney Whitney Cunningham, of Aspey Watkins & Diesel. “What it would like to do is roughly double that height allowance in exchange for four times as many affordable units … We could build two-story buildings with a much larger parking lot … but then the residents lose all that open space.”

“We want to bring families back to Sedona, especially families that have kids, to put them in the school system,” Maher said. “They’ll all be affordable to the people that work and live here. What I want is the applicant to come with a letter from their employer saying they work in Sedona and the prospect of their future employment is good. Then I will rent you a unit.”

Without the increased heights, Maher said, it would only be possible to build between 28 and 30 units on the site.

“I want to get the density and I want to get the quality of life. I apologize,” he said.

To attract and engage kids and families, “you need to have lawns and open space,” Cunningham said.

Building Height

“This is really, for me, circumventing a process that would give me more information to contextualize your application,” Councilwoman Kathy Kinsella said. “I can’t just look at building height without looking at building mass.”

“If height in this location is not acceptable to council, a lot of those details — that would be not a good use of anybody’s time,” Planning Manager Cari Meyer said, explaining why city staff preferred to send the project to council first rather than to start development review. Frieder said approval of the exemptions would “give the developer some minimal assurances to continue.”

“It will meet massing requirements,” City Attorney Kurt Christianson said. “These are the only exceptions they’re requesting.”

Councilman Brian Fultz asked Maher if he would build out instead of up or just walk away if council did not approve the extra height.

“I really don’t know,” Maher said. “If it’s, as they say, to the mattresses, yeah, I’d walk away. I’d put a bowling alley in there or something.”

“It would be the first three-story building in this town, in the commercial corridor, and it’s not going to be accepted very easily,” Vice Mayor Holli Ploog said. “Is 10 years enough to undergo that fight? Not for me.”

“There already are three-story buildings along the corridor that have been there for years,” Councilwoman Jessica Williamson said, which Meyer confirmed.

The Aiden by Best Western, 2,000 feet west of the site, is a three-story hotel.

“I’ve never heard of this project before it showed up in our packet,” Ploog continued. “And then we’re expected today, hearing about it for the very first time ever, to approve it.”

Mimi Maher and former Sedona Housing Manager Shannon Boone discussed the Goodrow project as early as April 12, 2023, and Boone discussed it with council on April 18 during the FY25 budget work session.

“You need to give us something that gives us the ability to argue in favor of this development under a lot of intense pressure,” Ploog added.

“I agree with you,” Maher said. “If you build the road, I’ll give you the 30 years.”

“The benefit to the city is 54 units for workforce housing,” Cunningham said. “Under the current zoning, that can’t happen.”

Affordable Units

Under the proposed development agreement, half of the units would have been restricted to renters earning 120% of area median household income or less for a period of 10 years and all units would have been prohibited from use as short-term rentals for a period of 30 years.

“I figure a self-funded program shouldn’t have to have any restrictions on it,” Maher said. “I struck a deal. I was going to get some support on this whole process if I agreed to 10 years. So I agreed to 10 years.”

“Our current offer is 10,” Cunningham said. “Kurt, on behalf of the city, has been insisting on 30. We’re comfortable moving forward without that issue being resolved today, and we’re fully aware that we’re coming back in front of you.”

“Would you consider just having no short-term rentals in perpetuity, given the goal that the city has?” Williamson asked.

“At this moment, I do not want to agree to it until we have finished every other aspect of this project,” Maher said.

“Preliminarily, I support the variance for height and the setback pending the full process,” Fultz said. “I do believe that 10 years is not long enough for the affordable time period.”

“I do have a problem with the 10 years,” Mayor Scott Jablow said, suggesting 50 years instead.

“We don’t need to make a decision on those today,” Councilwoman Melissa Dunn said. “We only need to make a decision on whether we believe the two exceptions, the height and the setback, would be allowable until such a time as we see all the rest of it, and we still have the right to deny.”

“This whole project … goes to show why we haven’t built any housing here,” Williamson said. “The right thing to do is to move forward with this project. Nowhere did anybody talk about the right thing to do … If I were the state people wanting to eliminate zoning, I would look at this particular process as a textbook example of why that might be necessary.”

Maher requested that if the council planned to give direction to staff, that they be directed to expedite the review process as well — “I am growing tired of it” after two years, he said — but withdrew the request after comments from Meyer and Community Development Director Steve Mertes.

Council then unanimously approved Kinsella’s motion to direct staff to proceed with the design and rezoning review for the project “with the understanding that exceptions to height and setbacks will be requested.”