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10:45 AM Tue, Sept. 18th

Council rejects Fann annexation

PRESCOTT - Despite receiving support from a majority of Prescott City Council members, the controversial Fann annexation went down in defeat Tuesday.

After about two hours of heated debate, five of the seven City Council members voted to take the 1,142-acre parcel of former ranchland northeast of Prescott into city limits.

But because large-scale annexations in the city require support of a "super-majority," or six of the seven members, the annexation motion failed.

That means that the annexation and the accompanying Granite Dells Estates subdivision will go away.

Property owner Mike Fann said after Tuesday's meeting that he plans to immediately begin splitting the ranchland into smaller parcels.

"I'll break it up and sell it in 36-acre parcels," he said. "The property will be for sale in just a few weeks."

Fann expressed frustration with the council results, which he attributed to the provision in the 2005 Reasonable Growth initiative (Proposition 400) that required a super-majority council vote for annexations of 250 acres or larger.

"Unfortunately, Proposition 400 just did what I was afraid it was going to do," Fann said, maintaining that the measure had allowed the minority to rule.

Ironically, local resident Howard Mechanic, one of the organizers of Proposition 400, urged the council to approve the annexation.

"I'll be very disappointed if this isn't annexed," Mechanic told the council this week. "I'm recommending approval for this agreement. It's not a good agreement, but the alternative is worse."

Several council members voiced similar sentiments.

"I don't want to look back on this day and say, 'This was the day the City of Prescott started to die,'" Councilman Bob Bell said.

In fact, most city officials and many members of the public have maintained throughout the debate that the 1,142 acres should become part of the City of Prescott. The alternative, they said, was development of the property in unincorporated Yavapai County with a series of individual septic systems and unregulated water wells.

At issue for the council, however, was the pre-annexation development agreement that aimed to set out the terms for the development of the land.

For weeks, city officials and Fann's representatives have tried to work out the problems, which centered in part on the pact's requirement that the city build millions of dollars worth of infrastructure without any firm deadlines for when Fann's development would begin.

Even though City Attorney Gary Kidd reported this week that the agreement was "a lot better right now than it was last month," he declined to give his full endorsement.

Councilman Jim Lamerson repeatedly pressed Kidd for his opinion of the agreement. "Are the taxpayers and residents (of Prescott) still vulnerable?" Lamerson asked.

Kidd responded: "Am I legally happy with this agreement in its current form? The answer is 'no.'"

City officials worried that a lagging housing market might cause Fann to delay building the homes in Granite Dells Estates, even as the city was spending millions of dollars to put in water and sewer lines and a new traffic interchange near Highway 89A and Side Road.

Members of the audience pointed out that such a scenario could interfere with the city's cost-benefit analysis, which contended that the impact fees on new homes in the annexed area would help the city recoup its costs.

But Jason Gisi, Fann's agent for the project, brought up the city's prior obligations for the infrastructure, noting that a previous legal settlement with the Country Dells project had required the city to construct the Side Road interchange, as well as some of the water and sewer lines.

City officials agreed that the city had obligations under two separate agreements - with Country Dells and Yavapai County - to move forward with infrastructure in the area.

Throughout the discussion, council members Lamerson, Mary Ann Suttles and Robert Luzius voiced disapproval of the development agreement.

Ultimately, the council voted 4-3 to approve the development agreement, with Suttles, Lamerson, and Luzius casting 'no' votes. Because the development agreement did not require a super-majority, the 4-3 vote was sufficient.

When the council moved on to the annexation issue, Lamerson noted that he supported the annexation and voted for it. Suttles and Luzius, however, pointed out that a vote for the annexation would obligate the city to the development agreement, which they opposed, and they voted against the annexation, as well.

Contact the reporter at cbarks@prescottaz.com