The Goldwater Institute has filed suit against the city of Sedona, Mayor Scott Jablow and City Manager Anette Spickard over the city’s refusal to grant a short-term rental permit to the new owner of the Oak Creek Mobilodge.

Oak Creek Hospitality LLC purchased the 59-space mobile home park in September 2023, although the sale was not recorded with Coconino County until June 2024.

The mobile home park, which is zoned single-family residential, predates the incorporation of Sedona in 1988 and “is considered a legal nonconforming use,” then-Community Development Director Audree Juhlin stated in a letter to then-owner Don Campbell in 2017.

“In conformance with [ARS] §9-500.39, the city may no longer restrict short-term vacation rentals in single-family homes,” Juhlin added. “It is the city’s understanding that the mobile home park has provided single-family homes on a rental basis historically.”

On Dec. 7, attorney John Thorpe of the Goldwater Institute contacted the city on behalf of Oak Creek Hospitality to confirm that the park was still eligible for permitting for short-term rental use.

“A 59-unit mobile home park is not a ‘one-to-four-family house or dwelling unit’ and thus not eligible to be an STR by definition,” City Attorney Kurt Christianson replied on Dec. 19. “Pursuant to ARS §33-1409(15), a ‘mobile home park’ is ‘any parcel of land that contains four or more mobile home spaces’ … You can clearly see that the definition of ‘vacation rental’ or ‘short-term rental’ found in ARS §9-500.39(L)(3) does not include a ‘mobile home park’ … The ‘one-to-four-family limitation’ applies to both a house and a dwelling unit … The relevant statutory meaning of a ‘dwelling unit’ per ARS §33-1409(8) ‘excludes real property used to accommodate a mobile home.’

“By passing [Senate Bill] 1350, the legislature clearly did not intend to permit mobile home parks, which frequently house some of the most vulnerable persons in the state, to evict its residents to allow the construction of STR parks,” Christianson added. “Your claim that the restriction severely impairs the use and economic value of the Oak Creek Mobilodge is absurd … I trust that you will not waste public resources further on this matter.”

Christianson did not clarify in the letter how the city determined the legislature’s intentions with regard to mobile homes as short-term rentals.

After short-term rental specialist Teresah Arthur reiterated Christianson’s prior position on June 20, Oak Creek Hospitality and the Goldwater Institute filed suit against the city, Jablow and Spickard in Yavapai County Superior Court on Aug. 7.

“The city’s prohibition on using mobile homes in a mobile home park as short-term rentals is unlawful and contrary to the plain language of state law,” Thorpe wrote in the complaint. “Every mobile home unit that plaintiff intends to rent on a short-term or vacation basis is a single-family or one-to-four-family house or dwelling unit that has its own physical address and its own private mailbox. The city has contended in a letter from the city attorney that Section 9-500.39’s protections for short-term rentals only apply if there are four or fewer units on the property. On the contrary, whether a house or dwelling unit falls within the statutory protections for short-term rentals does not depend on whether a parcel of land contains other houses or dwelling units.”

SB1350 was codified in part as ARS §9-500.39.

“The city has made statements to previous owners of the property, including in a 2017 zoning verification letter, that mobile homes on the property could be used as short-term rentals, and fell within Section 9-500.39’s protections, because the mobile homes were ‘single-family homes,’” the complaint continues. “Plaintiff is presently suffering harms as a direct result of the prohibition, including but not limited to the denial of the right to use its property as it chooses, uncertainty, loss of revenue and loss of business opportunities.”

As compensation, Oak Creek Hospitality is seeking a court order “enjoining the city from enforcing the prohibition,” “a declaration that plaintiff may lawfully use the property for shortterm rentals” and attorney’s fees and costs.

The city filed a motion to dismiss the suit on Oct. 10, via a contract attorney, Kristin Mackin of Sims Mackin Ltd. of Phoenix, which was denied on Monday, Oct. 14, for failure to provide a good faith consultation certificate as required by Arizona Rules of Civil Procedure Rule 12(j). Mackin refiled the motion with the necessary certificate on Tuesday, Oct. 15.

“The statutory definition of ‘short-term rental’ and ‘vacation rental’ expressly does not apply to a mobile home park, and because a 59-space mobile home park is not a ‘one-to-fourfamily house or dwelling unit,’ the city is not required to license each unit within a mobile home park for vacation or shortterm rentals,” the motion for dismissal stated. “The Court of Appeals has held that each space within a mobile home park should not be treated as individual ‘uses,’ but rather the entire park must be considered as a single use … Plaintiff urges that the language should be interpreted to apply to any single-family dwelling regardless of whether it is only an individual component of a unified, single use of land. This interpretation would render virtually all of the language in the statute — delineating specific uses of a single parcel of land — as meaningless.”

The case has been assigned to Judge Linda Wallace, who previously struck down the Village of Oakcreek Association’s ban on short-term rentals, new details regarding which will be covered in an upcoming Sedona Red Rock News story in November. A trial date has not yet been set.