Don’t Even Think About Fighting Phoenix City Hall Unless You’re a Good Old Boy

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"There was no discussion of a condominium project that would result in the demolition of the adobe building which was a historic part of Sunnyslope," he explains.

Hayenga tells it differently. By the '90s, she says, it was clear that tennis' popularity was waning. The Waterin' Hole was a landmark — as Williams notes, it was a lovely old building, rumored to have once been a bordello. But it had real liabilities.

The biggest was location. The Tapatio area is gorgeous, but it's not exactly accessible. Drivers take Seventh Street north until it runs into the Phoenix Mountain Preserve, just east of Sunnyslope; Gosnell literally blasted his way through several mountains to build the hotel and residences.

And the Waterin' Hole was far off the development's main drag. Hayenga was forced to market the saloon/eatery primarily to neighbors and guests at the Pointe's Hilton Hotel. Even they got careful instructions to "follow the blue line" painted on the street.

Hayenga says that from the beginning, she wanted an exit strategy. Rumors had begun to surface at the Waterin' Hole Racquet Club, where Hayenga was a member, that Gosnell intended to tear down the building and put in 120 apartments. She thought she could do better — she'd invest money into improving the place and try to save it. But she'd only go so far.

"I thought I could buy it, try to revive it, and if I can't revive it, I'll make sure I have a backup plan," she says.

Her plan: redevelop the site, perhaps as condominiums, perhaps as an addition to the Hilton Hotel.

Gosnell knew this, Hayenga says. The former president of Gosnell Builders, Rick Kafka, explained to her that the business had a "parachute clause," she says — if things got bad, she could always tear it down and build something else.

"You have a gun to the neighborhood's head," she claims Kafka told her, according to court documents. "If they don't support your business, you just build 120 apartment units on the property, and there is nothing they can do to stop you. It's already zoned for it."

Records show that Hayenga went three times to City Hall to discuss the zoning — once with Kafka.

During those visits, it all seemed very simple. The Waterin' Hole's acreage was zoned for up to 20 residential units per acre, meaning a total of 120 units, city planners told her. Condos or hotel rooms were both fine.

In March 1997, she closed on the property.

Not surprisingly, her ownership made little difference. Despite Hayenga's hands-on management and nearly $500,000 investment, the restaurant continued to lose money. And fewer and fewer people were playing tennis.

Something had to give.

Hayenga began talking to developers, one of whom accompanied her to City Hall. Again, she was given assurance that the property was zoned for up to 120 units.

She found herself in negotiations with Hilton. The company wanted to expand the hotel, and 120 "Hilton Garden Suites" would be a perfect substitute for the Waterin' Hole.

Ultimately, Hilton agreed to pay Hayenga $4.35 million in cash, due on the day of closing. It would be a huge profit — she'd paid just under $1 million for the acreage — and a straightforward deal. There was no zoning change needed, and, no matter how unhappy they were, there was no way the neighbors could stop the project.

What could possibly go wrong?

In February 2000, three years after the city had assured Miriam Hayenga her zoning was set, staffers suddenly announced they'd uncovered a serious problem.

Hayenga had been meeting regularly with Hilton brass, working through the details of the land sale. But then, in a meeting at City Hall with both Hayenga and Hilton, assistant city planner Steven Muenker explained that there was a big problem with their plan.

There weren't enough units left for development.

It took months to unravel what Muenker was talking about. But, as he finally explained, in 1979, The Pointe Tapatio had been allotted 2,147 residential units. As of early 2000, he explained, those units had almost entirely been used up.

Never mind the zoning on Hayenga's property. The entire Tapatio development had only 12 units left. Hayenga and Hilton could develop no more than 12 condos, or 12 hotel suites, without a major zoning change.

Hayenga was stunned. Not surprisingly, so was Hilton. All along, Hayenga had said she had the zoning to build a 120-unit hotel.

Hayenga had an option: She could ask the City Council to rezone the property and increase the cap. But the Tapatio residents were already annoyed at the prospect of losing their neighborhood eatery and tennis club. A zoning change would mean meetings at City Hall, bad publicity — and no guarantee of a happy ending.

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Sarah Fenske
Contact: Sarah Fenske