Scottsdale will not sue the state of Arizona over legislation that paved the way for Axon to build a new headquarters in the city, for now.
The City Council met in a special meeting on Tuesday to consider suing the state over Senate Bill SB 1543, a bill that negated a voter referendum on the Axon project. But, on a 4-3 vote, the Council decided to table the issue.
After meeting behind closed doors in an hourlong executive session to receive legal advice, the council majority argued it still didn’t have enough information to push forward with the lawsuit.
“I personally still have lots of questions about this,” Mayor Lisa Borowsky said after the private meeting ended.
Councilwoman Solange Whitehead, who sided with the mayor, said she expects the Council to take up a vote on the lawsuit at a later date after another executive session to answer their remaining legal questions.
“We always act judiciously, and so we're not going to make decisions when we don't have full and complete information,” Whitehead said.
But Councilman Barry Graham, who voted against shelving the vote, said there is no guarantee that will happen.
“There is no promise this is going to return to the council,” Graham said. “This is an epically important item for this city council. I'm stunned right now and speechless that this is where we are,” Graham said.
State preemption
Axon, the homegrown Taser and body camera manufacturer, announced plans to build a new headquarters in Scottsdale years ago. But the project generated controversy after the City Council approved amended development plans last year adding thousands of apartments to the mix.
An opposition group then gathered thousands of signatures to give voters final approval over the development, with the issue set to go to the ballot in 2026.
But Axon was able to bypass that vote, engaging in a monthslong lobbying effort at the Capitol to secure support for SB 1543, which prohibits cities with populations between 200,000 and 500,000 people from blocking businesses from building new international headquarters that feature hotels and apartments as long as the headquarters meets certain requirements.
Gov. Katie Hobbs signed the “Axon bill” into law April 18.
City documents do not say what exactly a lawsuit against the state would allege, but critics have long argued SB 1543 violates voter referendum protections in the state Constitution and violates laws banning legislation that benefits a particular individual or business.
Rep. Tony Rivero (R-Peoria), who backed the legislation, admitted earlier this year that Axon approached him to run the bill.
“My goal in carrying this legislation is to do everything I could to keep this company here,” he said.
But Rivero argued it didn’t violate the law, because it would apply to any business building a headquarters in the handful of cities with populations between 200,000 and 500,000 people.
How did we get here?
Opposition to the Axon development is rooted in an opposition to a surge in apartment developments in Scottsdale, which has generated pushback from a vocal contingent of residents over the past several years.
Initially, the Axon project didn’t include any apartments.
According to the Scottsdale Progress, Axon’s initial plans back in 2020 called for only office and manufacturing space.
But, years later, the company updated those plans and won City Council approval for a much larger project, featuring apartments, a hotel and restaurants.
Critics called that a bait and switch.
Former Councilman Bob Littlefield spearheaded the original voter referendum and started Taxpayers Against Awful Apartment Zoning Exemptions, or TAAAZE.
“TAAAZE is only opposed to the massive apartment project. It has no issues with Axon’s plans to build its corporate headquarters which had already been approved,” Littlefield wrote in an email to supporters last year.
Liebowitz, the Axon spokesman, said that change was driven by a desire to compete with top tier tech companies for talent.
“They want to live in a place where they can walk to work, where they can take their longboard from work to a place to eat lunch or food trucks,” he said. “And they realize that if we want to recruit the best and brightest, we're going to need a campus like environment to compete against the Metas of the world and the Amazons of the world.”
What’s next
Axon representatives celebrated the city’s decision.
“I think there's certainly a majority of residents who didn't sign the petition didn't weigh in and probably don't want the city to take $3 million that they could be spending on police officers or firefighters, roads or services and spend that money again on an ill-advised lawsuit that is only going to potentially chase away 5,500 high paying jobs, millions of dollars in tax revenue,” said David Leibowitz, a spokesman for the company.
But Axon isn’t declaring victory quite yet.
“I'm never going to feel like this is over until the day I walk into the Axon headquarters on the Axon campus,” Liebowitz said.
There is still a chance the state could face a lawsuit challenging SB 1543.
Littlefield said he doesn’t expect the city to bring the lawsuit back to a vote.
“I’d be happy if something did happen, but it's not going to happen,” said Littlefield. “Basically, they just didn't have the courage to stand up to act.”
But Littlefield said his group is prepared to sue if the city doesn’t act.
