Pawn 1st, LLC v. City of Phoenix – 4/12/2016

April 22, 2016

Arizona Court of Appeals Division One holds that a zoning variance altering the distance required between a pawn shop and a residential neighborhood is an “area” variance, not a “use” variance.

A pawn shop seeking to open obtained a zoning variance from the requirement in the Phoenix Zoning Ordinance that there be at least 500 feet between a pawn shop and a residential district.  Another pawn shop brought a special action to review that decision.  The trial court denied the challenge to the zoning variance and the competing pawnshop appealed.

The competing pawnshop argued that the variance to the 500-foot rule was an impermissible “use” variance which the Board of Adjustment is not authorized to grant under the applicable Arizona statutes and Phoenix ordinances.  The Court of Appeals held that it was a permissible “area” variance similar to a setback or lot-size restriction.  Regardless of the 500-foot rule, the property’s zoning classification permitted its use as a pawnshop; the variance of the 500-foot rule would not alter what uses were allowed in that property’s zoning classification. 

However, the Court of Appeals went on to hold the particular variance at issue was not justified.  The Board should only grant variances when it finds that “special circumstances applicable to the property” would cause the “strict application of the zoning ordinance” to “deprive the property of privileges enjoyed by other property of the same classification in the same zoning district.”  A.R.S. § 9-462.06.G.2.  Here, the Board found the required special circumstances based on the fact that the lot size had been reduced through eminent domain and that the pawnshop would be replacing the property’s previous non-conforming use as a strip club.  Although the reduced lot size caused the property to be treated differently than other properties in the zoning district, the fact that the new pawnshop would end the property’s non-conforming use was not a special circumstance because the change to a conforming use “merely brings the property rights and privileges in line with other properties in the same district.”  Finally, the special circumstance justifying a variance cannot be self-imposed, such as the choice here to select this particular property for use as a pawn shop.       

Judge Orozco authored the opinion; Presiding Judge Downie and Judge Portley concurred.