| We want to provide you with an update on the proposed Mill Town student-focused housing development that was discussed by City Council on February 4 and March 4. The development will be located across the street from Target on Milton Ave. and will be composed of a commercial development located in front of student-oriented housing. The original plan for Mill Town was approved by Council in 2018 and allowed for over 1000 beds as well as the commercial development.
What We Thought Was Happening
Because the Mill Town developer has yet to build, and his Development Agreement with the City will expire in mid-December, he returned to Council this February and March seeking approval of a second amendment to that agreement that would both extend the timeline and allow him to bring to Council a modified design plan that would, according to the developer, “right size” the student-housing. The amendment would also allow the developer to comply with the city’s 2017 zoning code rather than the current 2025 code.
Flagstaff’s current zoning code includes the High Occupancy Housing (HOH) Plan and Zoning. This was developed by the City with a lot of community input in reaction to the building of The Hub (now The Jack) student housing project on Milton Rd. The HOH requires large housing projects such as Mill Town to accommodate all types of residents, not only students. It does this by limiting the number of 4+ bedroom units to 30% of the development and requires at least 20% of units to be studios/one-bedroom apartments. This increases the diversity of housing types for people who live in Flagstaff and provides more options for non-student residents.
F3 met with city planning staff in February to learn as much as we could about the current plans for Mill Town and why the developer was choosing to not comply with the HOH zoning. At that meeting we were told that a (state statute) Proposition 207 waiver from the HOH zoning was not possible as the developer had already received (in 2018) the right to develop Mill Town prior to the city’s adoption of the HOH zoning.
On March 4, 2025, City Council held a public hearing and a vote to approve or not approve a second amendment to the Mill Town Development Agreement.
F3 strongly opposed the approval of the second amendment because it would have provided the developer an exception to the 2025 code which includes the HOH zoning. F3 argued that it was not appropriate to allow the use of an older code for any development that will be built in 2025 or later. F3 also emphasized the importance of using the HOH zoning for a development such as Saw Mill.
F3 emailed our reasoning and recommendation to not approve the amendment to the City Council. We also published a letter to the editor of the AZ Daily Sun and later spoke in person at the public hearing on March 4. Many additional members of the public spoke both in favor and against approval of the second amendment.
What Was Actually Happening
Unbeknownst to us, the Mill Town developer’s lawyer had informed city staff at some point prior to the scheduled public hearing on March 4 that they would in fact file a Prop 207 claim with the city in mid-December 2025 (when the Mill Town Development Agreement was set to expire) if the requested second amendment was not approved by council. The City legal team concluded, upon further research, that the developer, in fact, did have the right to file for an exemption and would refuse to implement the HOH zoning even if the council wanted him to do so.
A Prop 207 filing makes a monetary claim for the amount the landowner believes would be lost by implementing the HOH on a piece of property. Because the City of Flagstaff is not able to pay landowners their claim amounts which often reach into the millions of dollars, the city instead provides landowners a waiver from the HOH zoning. Hundreds of waivers have already been provided to landowners, exempting these properties from the HOH zoning.
Attendees of the Public Hearing on March 4 learned of this new and significant threat to applying the HOH zoning on Mill Town at the hearing itself. The developer did not provide any information about the monetary impact of using the HOH zoning for Mill Town. The threat to file the claim was enough.
The Council voted 5-2 to approve the Mill Town second amendment with Councilmembers Spence and Aslan dissenting.
The manner in which Mill Town was presented to the public on March 4, with a last minute discovery of and threat to file a Prop 207 claim, wasted a lot of city’ staff’s and the public’s time and energy.
What This Means for the Future of the HOH
Many other property owners in Flagstaff have sought Prop 207 exemptions from HOH zoning. We’ve started a deep dive into the properties for which waivers have been provided by the city since the HOH zoning was approved by the council. So far we’ve discovered over 75 and we’re still counting. We are looking to determine the locations of these properties to see where they are located and potentially where we can expect to see requests for large student housing projects in the future.
The community recently learned that the 2.2-acre Executive Suites at 1300 S. Milton Road was recently purchased and that property had received a waiver from the HOH zoning (AZ Daily Sun 3/9). The new owner, Newmark Phoenix, referred to the space as a possible student housing development site.
What F3 Will be Doing Moving Forward
F3 will let you know when Mill Town’s supposed “right sized” revised development plan will be back in front of Council for review. This could be as early as August/September of this year.
We’ll continue to study the health of the HOH zoning to determine how the provided Prop 207 waivers will impact the ability of the community to see the desired outcomes. We’re also closely tracking upcoming zoning code amendments and the city’s review of existing zoning as outlined in the ongoing Code Analysis Project.
Keep an eye out for updates on other issues and action alerts for Mill Town.
Michele James
Executive Director
MJames@FriendsofFlagstaff.org |
