Two landscape-changing, “transformational” projects that rolled through Scottsdale City Council in back-to-back years face each other in a distorted, funhouse mirror – the kind you may have looked into at the old CrakerJax.
The Parque, billionaire tech guru George Kurtz’s “visionary” plan at the site of that former amusement park, must follow a rather restrictive development agreement with the city.
When Axon’s similar apartments-hotel-retail-office plan was approved a year after the Parque, it, too, signed a development agreement.
But Axon’s restrictions largely have gone up in smoke.
And that Axon/Parque funhouse mirror has flipped in recent months.
While the similar-sized Parque was whistling along with no opposition, in the face of a withering backlash after the 2024 City Council Axon approval, Taser/Axon founder Rick Smith may have been excused for whining, “How come Kurtz gets to do all this and no one is bothering him?”
Now, Kurtz might be the one complaining: “Why do I have to ask the city’s permission for everything and Smith gets free range?”
It may be bizarre to some, but it’s true: Smith and his Axon crew now have “self-certification” powers – unlike Kurtz and other developers, who must ask permission on every nuance of his Parque plans before building.
In the turbulent year since a very-different City Council gave Smith’s plan the green light, a rollercoaster ride ended with a new city-Axon approval.
The “memorandum of understanding” signed by city and Axon leaders last week knocks out some key provisions of the development agreement.
In return for reducing its plan of 1,882 apartments and condos to 1,200, Axon no longer is required to:
- Bring millions of gallons of water to the city;
- Go through the Planning Commission/Development Review Board process;
- Submit plans for approval prior to building;
- Receive building permits from the city;
- Have city officials inspect construction before being provided occupancy permits.
And the requirement that Axon build its office before the apartment buildings is now open to interpretation.
Over the last two years, Councilman Barry Graham voted against the Parque as well as what he calls “Axon and Axon II.”
The latter is shorthand for last month’s Council “special meeting,” which – along with multiple related actions – approved by a 5-2 vote major revisions to a year-old Axon-city development agreement.
“I thought the entire ordeal was very hostile to residents,” Graham said, “everything from the last-minute notice to canceling the referendum.”
Though former Councilman Bob Littlefield’s Taxpayers Against Awful Apartment Exemptions (TAAAZE) group raised enough signatures to put the Axon question to Scottsdale voters, the council action Graham referred to nullified that.
The memorandum of agreement clears the way for Axon to build 1,200 living quarters – a significant reduction from the 1,882 previously approved, via a 2024 development agreement.
That pre-approval contract was similar to the Parque-city development agreement of 2023.
“I opposed both projects,” Graham reflected. “But do remember the Parque was much more agreeable to stepping up for the residents.”
Graham stressed the new Axon-city memorandum of understanding, or MOU, is “very concerning,” particularly in self-certification and sidestepping Scottsdale’s typical Planning/DRB development paths.
“The MOU,” Graham warned, “sets a dangerous precedent for circumventing local zoning authorities.”
Councilman Adam Kwasman, a fellow conservative, agrees with Graham on many issues – but parts ways, here.
“The (city-Axon) MOU reduced units, restructured the deal in its entirety to fit the circumstances at hand while maintaining the best parts of the previous development agreement,” Kwasman said.
The first-year councilman scoffed at those complaining city inspectors have no power over Axon’s development.
“Self-certification is something that is quite standard in other parts of the Valley – including Phoenix,” Kwasman insisted. “Having qualified, third-party inspectors inspect buildings has proven to be quite successful elsewhere.”
Chuckling, the libertarian-leaning Kwasman added, “It’s amazing how businesses can get by without governments breathing down their necks.”
Using third-party vehicle licensing offices as an example, Kwasman said, “Free markets provide efficiency and best practices just as well if not better than the government can.”
And, he added, “Axon is not a fly by night business.
“Having self-certification for their own headquarters – it’s not in their best interest to not build quality structures.”
After TAAAZE put the rezoning Axon needed for its land on the ballot, Smith and company successfully lobbied state legislators. Senate Bill 1543, signed by Gov. Katie Hobbs, nullified the referendum and took away Scottsdale’s power to monitor the Axon development via inspections and review boards.
While a TAAAZE lawsuit challenging the constitutionality of that legislation is pending at Maricopa Superior Court, Kwasman said TAAAZE is “likely to lose the lawsuit.”
Even if TAAAZE won a partial victory, “flaws would have been fixed” by state legislators, Kwasman held.
At the end of the court proceedings, in Kwasman’s scenario, Axon would have been able to build nearly 2,000 apartments – with the same self-certification powers.
That is something a neighboring mega-development lacks.
So close, and yet …
They are so, so close.
From the Parque mega-project, drive a half-block north on Scottsdale Road, take a right on Paradise Lane, follow that to a left on Greenway-Hayden Loop, which turns into Axon Way – and, boom, within 2 miles, you’re at the former state land Axon plans to flip into Scottsdale’s other mega-project.
On Nov. 13, 2023, Council listened to billionaire tech guru George Kurtz give his vision for the apartments-hotel-office project called the Parque, then approved his plan to “flip” the former CrakerJax amusement park by a 5-2 vote – with council members Barry Graham and Kathy Littlefield opposed.
On Nov. 19, 2024, Council heard details from Taser/Axon founder Rick Smith on turning former state land along the Loop 101 and Hayden Road into an apartments-hotel-office-retail project, then gave him a 5-2 approval – with Graham and Littlefield opposed.
So close, so similar these two “visionary projects” – or, as critics insist, “monstrosities” – are.
And yet, so different …
Both had similar paths, starting with the Airport Advisory Commission, as they are both under flight paths and close to the Scottsdale Airport.
Then, where the Parque’s pre-Council journey was smooth, Axon’s was rocky, to say the least.
In any case, and in similar manner to other large projects, Kurtz and Smith both reached development agreements prior to pitching Council.
Parque agreement
The Kurtz project is a mixed-use plan for 1,182 apartments and condos, a “five-star hotel” with 223 rooms, offices and 253,000 square feet of restaurants and shops.
“We’re going to spend more than $1 billion here and transform an eyesore,” John Berry, an attorney representing Kurtz, promised in the fall of 2023.
Berry told the Planning Commission that Kurtz is eager to begin construction, though he hedged on a specific start date.
Two years later, the Development Review Board considered “The Parque Phase One” at its Nov. 20 meeting.
Described as “a legacy project,” the first of multiple phases of the massive Parque on Scottsdale Road south of Frank Lloyd Wright Boulevard received unanimous approval.
The first phase includes 159 “dwelling units” – about 15% of the total planned apartments/condos – and 2 acres of open space dubbed “Central Parque.”
When the beloved CrackerJax amusement park closed in mid-2022, Kurtz swooped in to buy the property. Kurtz, who made his fortune as co-founder of cybersecurity giant CrowdStrike, also owns the Promenade just north of the Parque.
Earlier this year, he set up “Kurtz Quarter” by also purchasing the nearby Scottsdale Quarter.
The Parque Development Agreement, City of Scottsdale Contract No. 2023-144-COS (The Parque), is a 21-page document, passed as Resolution No. 12937 on Nov. 13, 2023.
The Parque development agreement included a facility with a “green/solar roof’ and 1,100 parking stalls.
In return for going over density allotments for the area and increasing building height from 84 feet to 117 feet, Kurtz agreed to pay “bonus development provisions” totaling $16.3 million.
According to Holly Peralta, a Scottsdale spokeswoman, “The city has not yet received any payments from Parque, as their payment schedule is based on permit issuance and they have yet to submit plans.”
As for water use, which makes many longtime residents nervous, the city and Kurtz agreed “to implement and test a new concept for water capture and conservation.” The Parque’s stormwater would be “harvested,” then piped into the city’s system.
The Scottsdale Water Department has the technology to filter stormwater – and even sewage water – into water that meets state drinking requirements.
Kurtz also agreed to put powerlines underground, for a more attractive look. This would also give the developer credits to be used against the $16.3 million bonus payments.
The aforementioned Central Parque was also stipulated in the development agreement, which demanded more than 3,000 parking spaces.
Axon agreement
According to its pitch to City Council: “Axon is a local success story and proud to be one of the City’s top 10 employers after its humble beginnings in a Scottsdale garage over 30 years ago.”
A state land purchase in 2020 was originally targeted as only a new Axon corporate headquarters, as outlined in a development agreement with the city.
Three years later, Smith – a Chaparral High grad – came up with the plan to add apartments, a hotel and retail space, requiring a massive overhaul of the 2020 document.
“First Amended and Restated Public Infrastructure Reimbursement Development Agreement,” City of Scottsdale Contract No. 2020-I38-COS-A1 (Axon), is a 19-page document passed as Resolution No. 13274 by Scottsdale City Council Nov. 19, 2024.
The agreement begins: “Axon employs approximately 850 persons in (the) city and has been working to create a new unified campus to expand its facilities and city’s employment base and to add at least 650 jobs.
“Axon desires to construct its Axon World Headquarters Campus in one or more phases and will commence construction on its headquarters and manufacturing facility prior to commencement of construction of the supportive hotel, commercial, and multi-family portions.”
Scottsdale, in turn, “finds that the benefits to the city of the proposed project outlined in this agreement are anticipated to be of great economic benefit to the city.”
Major checkmarks for Scottsdale included “retaining existing jobs, creating new jobs, economic development in Scottsdale, tax revenues, water, sewer and drainage enhancements, roadway, and other infrastructure, tax, and economic development benefits.”
According to the council report created by staff members, “The 2020 Public Infrastructure Reimbursement Agreement has been amended and restated to reflect the negotiated items that address the new conditions related to this proposal.”
Staff summarized “key items for consideration,” including, “…Phase 1 of the development to include completion of the corporate headquarters building and Axon Way (including roundabout at Perimeter Drive).
“Construction on Phase 1 must meet certain construction milestones before the start of construction for Phase II buildings.”
This is reiterated later:
“Axon is required to begin building its headquarters facility (Phase I) before they can build subsequent facilities (Phase II).”
And, according to the agreement, “Any proposed significant change to the development plan … shall be subject to additional action and public hearings before the Planning Commission and City Council.”
Axon’s original plan called for nearly 2,500 apartments.
The development agreement whittled that down to under 2,000 – even so, that would be millions of gallons of water use by new residents.
In a section titled “Water Rights,” the agreement specified “Axon shall purchase long term storage credits from the Gila River Water Storage, LLC in the amount of 3,000 acre-feet to be transferred to the city.”
The water credit purchase-transfer was to take place “within 30 days following the effective date” of the agreement – but never happened.
The Axon-city of Scottsdale development agreement could only be changed if both parties agreed.
Which was to come a year later …
“Axon II”
On Nov. 14, after approving the Axon-Scottsdale MOU, City Council also approved – same 5-2 vote, same Graham and Littlefield opposed – “Ordinance No. 4697, which establishes a self-certification and third-party certification program for qualified international headquarters campuses.”
According to the agenda, the ordinance “enables licensed professionals (architects and engineers) to certify plans and inspections …”
Contract No. 2025-195-COS, passed as Resolution No. 13567 (Axon), begins, “This Memorandum Of Understanding (‘MOU’) is entered into between Axon Enterprise, Inc., a Delaware corporation (‘Axon’) and the City of Scottsdale …”
Compared to the development agreement of the year previous, the timeline for construction appears looser:
“Infrastructure required to support the deferred units may be constructed at any time following issuance of the building permit for the headquarters building.”
The MOU states “Axon shall provide not less than 47,000 square feet of commercial floor area (including retail, restaurant, and similar uses) as part of the development.”
What Graham referred to as “Axon II” also spells out how Scottsdale must create an ordinance ”to allow Axon to utilize a third party to issue building permits, to conduct building inspections and issue certificates of occupancy and for any portion or phase (of) an international headquarters campus …”
The second page of the nine-page agreement includes a big change on the water front:
“Reimbursement Development Agreement Water Rights shall be removed and there will be no requirement for Axon to purchase long term storage credits from the Gila River Water Storage, LLC in any amount or to transfer any amount to the city.”
Then, the big payoff:
“Axon agrees to reduce the number of units from 1,882 to 600 apartments and 600 condominium units.”
And a kicker for fans of four-leggers:
“Axon shall construct and maintain a dog park on the site that shall remain open to the public during reasonable daytime hours and with reasonable restrictions.”
The ‘mega duo’
In a mass email, Bob Littlefield raged against the Axon-city MOU.
“At a time of drought, the council majority released Axon of its obligation to provide water for its project. Who thinks this is a good idea?!” he demanded.
“And for the first time in Scottsdale history, the developer will govern itself when it comes to construction, rather than answer to city inspectors.”
Second-term Councilwoman Solange Whitehead defended the new Axon-city agreement, saying “Clear heads and fiscal responsibility prevailed.”
She said the choice came down to reaching a compromise with reduced apartments “or cede local control to the state allowing the construction of almost 1,900 apartments and no resident-requested investments.”
In addition to the new MOU, Whitehead voted for the 2024 Axon plan and the Parque plan of two years ago.
Together, the Parque and Axon developments could bring Scottsdale nearly 2,500 apartments/condos, huge amounts of office space, new shops and restaurants and upwards of 1,000 hotel rooms.
“They’re both monsters,” Graham concluded, “but if you had to pick between the two – you’d pick the Parque.”
What Graham calls “monsters,” Kwasman calls gems.
“This is the type of luxury Scottsdale should be building, rather than crappy strip malls and stucco apartment complexes,” Kwasman said.
Vowing Axon’s development will have a similar, high-end look, Kwasman gushed that the Parque will bring “quality, top-of-the-line, Beverly Hills-style residences and shopping and dining.”
He sees the Kurtz creation as “a place where wealthy and aspiring residents and visitors can go and live, work and play.”
The first-year councilman dubbed the Parque and Axon “the right type of growth.
“This council is ushering in an age of aspirational success,” Kwasman vowed. “And that’s what Scottsdale is known for. It’s the city of millionaires.”