AZ Supreme Court Holds Special Circumstances Justified the Granting of an Area Variance

In 2010, Property’s owners evicted their current tenants, discontinued their property’s use as an adult theatre (a non-conforming use), and leased the Property to William Jachimek, doing business as Central Pawn, with an option to purchase. Pawn shops were a permitted use, provided the building’s exterior walls were at least 500 feet from a residential district and the owner obtained a use permit from the zoning administrator. Jachimek applied for both a use permit for his pawn business and a variance from the 500-foot residential setback requirement, because the property was within 500 feet of a residential district. The zoning administration hearing officer denied his applications, and Jachimek appealed to the Board. At the Board hearing, Pawn 1st, LLC, a competing pawn shop, opposed the variance. The Board conditionally approved the variance, requiring Jachimek to operate the pawn shop only during specified hours, to not buy or sell guns or pornography, and to apply for building permits for a promised remodel of the building within one year.
The Board rejected Pawn’s motion for reconsideration, so Pawn filed a special action in superior court challenging the Board’s variance decision. The superior court found Pawn lacked standing to challenge the Board’s decision. The court of appeals reversed and, on remand, the superior court dismissed Pawn’s complaint, finding: the variance was an area variance and not a use variance; that the Board’s decision to grant Jachimek’s. area variance was not ultra vires because the Board was authorized to consider area variances; and that sufficient evidence supported the Board’s variance decision. The court of appeals reversed.
The court noted at the outset that under Arizona law, Boards of adjustment could not: change the uses permitted in a zoning district; or grant a variance if the special circumstances applicable to the property are self-imposed by the property owner. Thus, a Board’s grant of a variance in excess of its statutory authority would be ultra vires and invalid as a matter of law. The court of appeals held that Jachimek’s variance was an area variance because a pawn shop was a permitted use in a C-3 zoning district, irrespective of the 500-foot distance requirement. Furthermore, the court agreed with the Board, superior court, and court of appeals that special circumstances applied to the property. Here, the record indicated that the Board’s findings regarding the lot size, the building’s limited setback from the public sidewalk, and the parking restrictions were special circumstances justifying an area variance, because the Property’s unique characteristics created exceptional practical difficulties.
The court found that these special circumstances arose from factors beyond Jachimek’s control. Specifically, the City’s eminent domain action, rather than Jachimek’s intended use, altered the Property’s dimensions and created the special circumstances: such as the property’s comparatively small lot size, absence of frontage area around the building, direct abutment of a public sidewalk, and parking restrictions. Accordingly, the court vacated the court of appeals and affirmed the superior court’s judgment upholding the Board’s variance and granting summary judgment in favor of Jachimek.
Pawn 1st LLC v City of Phoenix, 2017 WL 4328093 (AZ 8/10/2017)