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Flagstaff City Council voted to approve a second amendment to a development agreement with Phoenix-based Vintage Partners on Tuesday, the latest twist in the yearslong saga of the Mill Town project.

The vote came a month after a prolonged discussion at the council’s Feb. 4 meeting, during which multiple council members expressed confusion and skepticism about what they were being asked to approve. Council postponed making any decision that day, settling instead on a one-month continuance.

On Tuesday in a 5-2 vote in front of nearly full chambers, the council agreed to extend Vintage Partners� entitlements on the parcel at 1801 S. Milton Road by an additional two years and to allow Vintage to submit a new site plan for a mixed-use residential and commercial development that will not need to comply with the requirements of the city’s high-occupancy housing code.

Mayor Becky Daggett, Vice Mayor Miranda Sweet and Council members Khara House, Lori Matthews and Anthony Garcia voted in favor of amending the development agreement. Council members Austin Aslan and David Spence voted in opposition.

Walter Crutchfield, a partner at Vintage who has spearheaded the Mill Town project, said after the vote, “We’re grateful for the opportunity to bring a project forward, through planning and zoning, through the public process, through the neighborhood process and through council -- and as we always do, participating with all the residents of the city and getting their input.�

The amendment clears the way for Vintage to revise its plan for the development, but it does not significantly clarify the future timeline for the long-promised project.

Long time coming

The Mill Town development has a lengthy history, beginning with the 2013 tripartite agreement between Vintage Partners, the Arizona Department of Transportation (ADOT) and the City of Flagstaff. Under the terms of that public-private partnership, Vintage agreed to relocate the old ADOT facility on Milton Road to the old Harkins Theater building at the corner of Woodlands Village Boulevard and University Avenue, and construct a new facility for Harkins.

In exchange for relocating ADOT and Harkins, Vintage received the right to develop the parcel of land adjacent to the old ADOT site, known as the "Fresquez" parcel after its former owners, for residential and commercial use. Early predictions about the timeline for that development were optimistic: a planning document stated that tenants might begin to move into the new development in 2017.

The reality wasn’t quite so speedy. Flagstaff’s City Council gave its final approval to the three-way agreement in late 2014, and Vintage broke ground on the new Harkins site by the mall in mid-2015. ADOT didn’t move into the old Harkins building until the end of 2019.

And as anyone who’s driven down Milton knows, construction on the Beulah/University alignment remains ongoing. That work is now projected to finish later this summer.

In the meantime, Vintage unveiled its original plan for the Mill Town project in 2017: a 1,200-bed, rent-by-the-room student housing complex, with roof heights reaching over 90 feet. Some Flagstaff residents objected to the height, size and student-focused design of the proposed project.

Responding to those objections, Vintage offered to eliminate the planned first-floor commercial space and rooftop bar to lower the height of the building, forgo the conditional use permit that would allow it to rent by the bedroom, and rent several dozen units at below-market rates for at least 10 years. City council approved a development agreement based on that plan in April 2018 by a 5-2 vote.

The agreement provided Vintage with development entitlements lasting five years. Vintage stated at the time that it had partnered with Capstone Collegiate Communities, the developer of the Fremont Station apartment complex, to build and eventually manage the Mill Town project, but construction on the site never began.

In October 2021, the city and Vintage amended the development agreement to extend Vintage’s entitlements on the Fresquez parcel an additional two years. Under that amendment -- which is still in effect -- Vintage has until Dec. 13, 2025, to secure construction permits.

But in late 2024, Vintage had brought forward a new plan for the property. Its revised design is smaller -- down to 262 dwelling units and 668 bedrooms, as specified in the concept plan filed with the city’s Planning and Development Services office. (The final project specifications might vary from what is listed in the concept plan.) It is also shorter, down to four stories instead of five, and eliminates the parking structure included in the original design.

Vintage now intends to partner with construction firm Toll Brothers, one of the largest home-building companies in the country, to construct the complex.

Crutchfield said in an interview that the company had reconsidered its original design during the delays created by the other elements of the public-private partnership.

“All of those aspects took so long that by the time we’re ready to go forward, markets have changed,� Crutchfield said. “And, frankly, what we heard over all those years was, 'It’s too big, it’s too big, it’s too big.'�

Changing the site plan, however, created a new obstacle: the rezoning approval and development entitlements granted in 2018 were conditional upon use of the original site plan. If Vintage wanted to move forward with a different site plan, it would need to request amendments to the rezoning ordinance and to the development agreement, city staff told the company.

It was that proposed second amendment to the development agreement that city council discussed on Feb. 4 and again on March 4, and which drew objections from critics of the original Mill Town proposal.

One of the provisions of the amendment states that Vintage’s new site plan will comply with the 2017 version of Flagstaff’s zoning code -- the version that was in effect when Vintage created and submitted its first site plan. Since the approval of that site plan, Flagstaff’s zoning code has changed.

Specifically, the city’s High Occupancy Housing (HOH) Specific Plan added new requirements to the code  setting a minimum percentage of studio or one-bedroom units and a maximum percentage of four-bedroom or larger units in any large, high-density housing development. City staff, in materials submitted to the council, noted that neither the new nor the old plan would meet those requirements if evaluated under the current zoning code.

The post-HOH code requires that at least 20% of all bedrooms in a large, high-density development must be in studio or one-bedroom units, and no more than 30% of the bedrooms may be in four-bedroom (or larger) units. The new Mill Town concept plan specifies 668 total bedrooms, but only 66 located in studios at about 10%. And it shows that 406 bedrooms would be located in four- and five-bedroom units at about 61%.

The HOH code also sets parking space minimums. For Vintage's 668-bedroom concept plan, the HOH would -- if applied -- require more residential parking spaces than are currently included.

The HOH plan was adopted in response to public dissatisfaction with large student housing projects. Critics of the Mill Town project, like the group , have said that Vintage’s insistence on using the pre-HOH 2017 zoning is evidence that the developer is trying to build another student-focused, rent-by-the-room complex that won’t adequately serve other sectors of the community.

Critics have also pointed to the proposed design of the units, all of which have a one-to-one ratio of bedrooms to bathrooms, a common feature of rent-by-the-room student housing.

Speaking by phone prior to the council’s March 4 meeting, Crutchfield called critics of the project “nefarious� and accused them of sowing “distrust and fear.� He complained about what he called “half-truths� and “bad-faith actions.� Vintage’s new proposal for the site, he said, is “the right project for this time.�

He repeatedly noted that Vintage has fulfilled all of its obligations under the public-private partnership, and he said those projects should be evidence of the company’s good faith and good intentions.

“Everything that the development agreement required us to do, we delivered to the citizens of Flagstaff,� Crutchfield said.

During that call, Crutchfield avoided discussing the HOH code or its requirements in specific detail. When asked whether the new site plan could have been created in accordance with the post-2017 HOH requirements, and why Vintage preferred to continue using the 2017 zoning code, he did not answer directly.

“Somebody has shifted the conversation,� he replied. “Why are we having this conversation?�

Code changes

The conversation about the zoning code continued at the March 4 city council meeting, where city planner Wesley Welch and deputy city attorney Kevin Fincel foregrounded the HOH code in their presentation to the council.

“We wanted to make sure it was very clear, that Council understood what was happening,� Fincel said during his presentation.

If the council approved the new amendment, Fincel said, it would still also need to approve the new site plan at a later date, likely in August or September. After that, the rezoning ordinance would need to be updated, too, he said.

But if the council rejected the amendment, Fincel noted, Vintage would likely file for an exemption to the HOH requirements -- known as a Proposition 207 waiver, after the that allows private property owners to request either compensation or non-enforcement if the enactment of a land use law diminishes the market value of a property.

In order to avoid paying over $51 million in compensation claims, Flagstaff has already granted numerous Proposition 207 waivers allowing property owners to bypass the HOH code.

Vintage was not previously eligible to file for a Proposition 207 waiver because its original site plan was governed by the pre-HOH code, Fincel explained. But if the development agreement were to lapse in December, current HOH regulations would apply to the Fresquez parcel, and Vintage could apply for -- and almost certainly obtain -- a waiver.

So in either scenario, the Mill Town project would most likely be exempt from the requirements of the HOH code.

Lindsay Schube, an attorney with the firm Gammage & Burnham who is representing Vintage Partners, emphasized the “procedural� nature of the decision before the council. Approving the development agreement amendment would not take away the council’s opportunity to review and critique eventually a more detailed site plan, she noted.

“The vote tonight gives us the right to submit another site plan that this Council will get to vote on,� Schube said.

Schube deflected descriptions of the project as "student housing," saying, "There is no land-use category in your code or anyone else’s called student housing." She acknowledged, though, that the development's close proximity to the university would likely attract students. 

Crutchfield spoke to the council, too, saying the decision to approve the amendment “should not be difficult.� He stressed the unprecedented nature of the public-private partnership, reiterated that Vintage had fulfilled all its obligations under that partnership and, once again, alleged that his integrity and motives had been attacked.

He also claimed, based on alleged private discussions, that other developers had decided to avoid Flagstaff because of the delays in the Mill Town project, and that Vintage had been forced to postpone negotiations with potential commercial tenants -- including Trader Joe’s -- because of the uncertainty over the project’s residential component.

But he was not deterred, he insisted.

“I want to be on the record, for the folks sitting here. I will not quit,� Crutchfield said.

He promised to complete both the Mill Town project and additional affordable housing projects in the city.

“I will not be run off because you attack my character and my motive,� he added.

During the public comment period, seven people spoke in favor of amending the development agreement, including former Flagstaff Mayor Coral Evans. Several of the other speakers were, according to Crutchfield’s earlier statements, Northern Arizona University students whom he’d encouraged to attend the meeting. They spoke about their difficulties finding affordable housing in the community.

Six people spoke against the amendment, most of them affiliated with Friends of Flagstaff’s Future. They generally argued that the project was too student-focused and would not meet the city’s broader housing needs. 

Opening the council’s deliberation, Council member David Spence said he intended to vote against approving the amendment “because we should govern by rule and not by exception.� Spence said he was concerned about the potential precedent the amendment would set for future development agreements.

Another member of Council, Austin Aslan, too, stated that he would vote against approval.

“Our community is not poorly informed,� he said. “Their concerns are not phantom concerns, nor irrelevant to the conversation at hand.�

Council member Lori Matthews, who had demonstrated a favorable view of the project throughout the evening's proceedings, said rejecting the amendment would “alienate� developers.

“What’s going to be gained if we vote this down tonight?� she asked. “It’s going to cost a very valuable community partner who has delivered more affordable housing than any other developer I know of in this city.�

Khara House, attending remotely, began her remarks by saying, “I don’t believe any project is perfect.� But the councilwoman expressed confidence that Vintage would deliver a suitable project in the end: “I see the process that we’re undertaking tonight, and this consideration, as a step toward a more balanced and community-aligned outcome."

Anthony Garcia, who had indicated on Feb. 4 that he was leaning toward voting no on the amendment, said, “I think there was a little bit of a misconception about what we could do here, on the dais, today.� Voting no wouldn’t make the project simply go away altogether, he said, nor would it force the developer to meet HOH requirements.

“It seems to me that Vintage Partners wants to work with this community and listen to us,� Garcia said. “And at this point, because of those [Proposition] 207 claims, that’s all we can hope.�

Sweet, who had earlier highlighted Vintage's affordable housing projects, addressed Crutchfield and Schube directly.

“I’m counting on you," Sweet said to them. "I need this to be something that is for this community.�

She urged the developers to make good on their promises of a “right-sized� project suitable for all potential renters.

Daggett, similarly, told Vintage’s representatives that she hoped to see them take the community’s criticisms into account in the preparation of the new site plan.

“This is not an anti-student statement,� the mayor said, “but when the site plan comes back to planning and zoning and to the council, I’d like to see a healthy mix of types of rentals.�

The community’s sentiment around student-focused housing projects was clear, she added: “We want to move on from that model and create something different.�

Altogether, the presentations, questions, deliberations and vote took over two hours. 

In a phone call the morning after the council's decision, Crutchfield said he thought the eventual new site plan might be in line with the HOH requirements for bedroom ratios. “I think what we’re going to be able to show and say is, ‘We conform to HOH even though we don’t have to,'" he said. 

“The thing about the HOH that I don’t like," he added, "is I think they just got the parking calculations totally wrong.�

He hopes the design and location of the Mill Town project will encourage car-free living, he said. 

The council, and the community, will now await Vintage Partners� detailed plan for the site -- and, someday, the beginning of construction.