Marijuana Dispensary Fights for Site Near ASU

Swell Farmacy's plan to build a marijuana dispensary near Arizona State University hit a roadblock with Tempe zoning officials, and may end up in court because of allegations of a conflict of interest on the zoning board.

Swell Farmacy, also known as Healing Healthcare 3 Inc., wants to build its dispensary at 111 S. McClintock Drive, at the intersection of Rio Salado Parkway. The site is south of Tempe Marketplace, across from an Arizona Public Service natural-gas power plant, and catty-corner from the eastern edge of Arizona State University's Karsten Golf Course.

Swell submitted its request in December. It was rejected by a zoning administrator on December 31, nine days later, on grounds that it violated the 500-foot residential separation requirement.

The residential area identified was Karsten Golf Course.

Although the golf course is zoned agricultural, the zoning administrator stated that the land owner could petition to change the use to residential. Swell appealed the decision.

The Tempe Board of Adjustment heard the appeal on February 24. Their law firm, Gallagher & Kennedy, argued that the portion of the golf course identified as potentially residential is unfit for development owing to high-voltage transmission lines from the APS power plant. The easement allowing for the lines specifically prohibits any development that could block access to the lines. Gallagher & Kennedy also noted that the area is identified as a parking lot in ASU's redevelopment plan for the site.

The board voted 4-3 to uphold the zoning administrator's decision to deny the permit.

Gallagher & Kennedy attorneys later learned that board member David Lyon, who voted against the request, is an architect at SmithGroupJJR, the firm that prepared the updated ASU Master Development Plan in December 2011.

Swell appealed, stating that Lyon should have recused himself because of the potential conflict of interest.

When the board met April 27 to reconsider the issue, Lyon did not attend. At a subsequent meeting, asked by another board member whether his absence was deliberate, Lyon said, "I can easily see why that might be the appearance." He cited family reasons as the cause of his absence.

Last week, at its May 25 meeting, the permit again was on the agenda. But there was confusion over whether the permit, or only the alleged conflict of interest, would be discussed. Though language in the online agenda for the meeting limited discussion and action to the potential conflict of interest, the wording of a public notice posted at the proposed dispensary site left room for debate.

Board members discussed the discrepancy for about 30 minutes before deciding that discussion would be limited to the merits of the conflict-of-interest issue.

Mark Fuller, an attorney at Gallagher & Kennedy, spoke on behalf of the dispensary. He argued that as a quasi-judicial body, the Board of Adjustment functions as a judge and that its members, therefore, must be held to the same ethical standard. He contended that a judge would recuse himself for relationships even more indirect than the situation at hand.

Fuller noted the potentially "very profitable relationship between SmithGroup and ASU." He said he and his clients had begun to suspect that personal bias was influencing Lyon's vote after the board member likened dispensaries to "adult entertainment businesses" at the February meeting.


Lyon said he was a new employee at SmithGroup and had been there only a few weeks at the time of the initial vote.

"I had never heard of the master plan," Lyon said, adding that it had taken him several hours of research and phone calls to determine the relationship between SmithGroup and ASU. "I have no monetary interest in the project."

The board voted 4-3 that Lyon had not erred by not recusing himself from the February vote. Lyon cast a vote in his own favor.

Adjustment Board policy prohibits any further appeals in the matter. It seems likely that Swell Farmacy will take its fight to Maricopa County Superior Court.

Correction: In an earlier version, Maricopa County Superior Court was misidentified as Arizona Superior Court.