In the News

Council raises workforce rent cap by 13.6% – Sedona Red Rock News

The Sedona City Council voted for a 13.6% increase in the rental rate cap for the city’s Rent Local program on April 8. Council spent 41 minutes considering the change, which had originally been scheduled to take five minutes.

The program was created in August 2022 with the aim of inducing property owners to rent their properties for terms longer than 30 days by offering a one-time financial incentive. Participants must agree to refrain from renting their properties as short-term rentals for one year after signing up and cannot charge rents that are greater than the monthly rental cap set by the city.

“We simply want to raise the rental cap to $2,500 per month from the original $2,200 per month,” Housing Manager Jeanne Blum said. “We want to do this to better align with current market rates and encourage more home owners to participate.”

“Participation rates do remain low because the rental caps are kind of misaligned with our market rates,” Blum said. “Most potential participants have been discouraged because the rental cap is below what they can bear.”

According to the information provided to council by city staff about the current rental market in Sedona, which Blum said was derived from an “ad hoc study,” the average monthly rent is Sedona is $1,762 for a one-bedroom, $2,424 for a two-bedroom and $3,553 for a three-bedroom, compared to U.S. Department of Housing and Urban Development fair market rates for Yavapai County of $1,293, $1,606 and $2,048, respectively. Blum also estimated that a studio would run between $1,200 and $1,900 a month, while the rent for the few properties currently partici pating in the Rent Local program is $1,500 a month to $2,200 a month.

Councilwoman Kathy Kinsella asked why staff were not suggesting that the cap be raised to $2,700 per month.

“It’s not appropriate,” Blum said. “It’s a burden.”

Blum also argued that raising the rental cap, in combination with the one time incentive, would bring a landlord’s potential return up to an amount closer to the market rate for a three bedroom home, or $3,333 per month. The one-time incentives offered through the program are $6,000 for a studio, $7,000 for a one bedroom unit, $8,500 for a two-bedroom and $10,000 for a three-bedroom, while those renting individual rooms can receive $3,000 for a single room, $4,000 for two rooms and $5,000 for three rooms. The program paid out $8,500 in incentives out of a budget of $240,000 in fiscal year 2023, $31,250 against a budget of $100,000 in FY23 and $14,250 against a budget of $100,000 in FY25, with the budgeted amount for FY26 having been reduced to $50,000.

A total of seven properties have been enrolled in the program; the council’s packet for the April 8 meeting states that three of those renewed for a second year.

Blum said that renting properties long-term would reduce maintenance costs for property owners over short-term renting.

“The increase covers the first year, gets closer in the first year, and then goes away. Maybe that’s why only three households have renewed their leases in year two,” Vice Mayor Holli Ploog said.

“Of course, if the incentive were available for multiple years, there would be more traction in the program, more longevity,” Blum said.

“Perhaps there are modifications in addition to the increase in the cap that we should consider,” Ploog said.

“The number of registered STRs has continued to increase over the life of the program, and yet we still aren’t getting meaningful traction,” Councilman Brian Fultz said. City statistics show that the number of STRs increased by 6.4% between 2018 and 2024.

“At what point do we say that this is a strategic distraction?” Fultz asked.

“I don’t think it is a distraction,” Blum said. “If it helps one family, in my view that’s successful.”

“The housing that we need is two- to three-bedroom,” Lindsey Hammersmith said during the public comment period. “I agree with the amounts that were brought up today.”

“What we’re seeing on the sales market is that a lot of these short-term rentals now are going out to market, and if they were sold today, I know of a local one, a three-bedroom, two-bath, that if I were to purchase that, my mortgage would be about $4,000 a month,” Hammersmith added. “So you really kind of perpetuate this needing to do a short-term rental continuation.”

“I’m fine with giving this a try as requested, but I’m skeptical that it’s going to work,” Fultz said, saying that “the average short term rental is still grossing $3,200 a month.”

“I’m willing to try it,” Councilwoman Melissa Dunn said, but expressed concerns about the program merely “deferring homelessness.”

“Maybe we need to have an incentive that increases if you leave a property in the program,” Councilman Derek Pfaff suggested.

“We’re not trying to compete in the marketplace. We’re trying to find that trip level,” Councilman Pete Furman said.

“We can never compete with the market,” Kinsella said. “We were trying to find someone’s better side.”

Council voted unanimously for the increased cap.

Council returns ADOH homelessness grant – Sedona Red Rock News

The Sedona City Council’s proposed rental assistance program is off the table after the council voted unanimously on April 8 to return the Arizona Department of Housing grant originally intended to fund the planned car camp for homeless workers at the Sedona Cultural Park to ADOH to be redistributed to organizations in the Verde Valley.

Council had previously discussed a city staff proposal for reallocation of the $875,638 grant on Feb. 11, which would have redirected the funding to a two-year program run by Catholic Charities Community Services to provide rental assistance to homeless individuals or pay to move them out of the Sedona area.

“Council, during the discussion, wanted to clarify the eligibility requirements to explore potential impacts on Sedona homeless students,” Housing Manager Jeanne Blum said. “School students fall under a different category … they are not necessarily experiencing literal homelessness, which is what this funding needs to target … some of the homeless students who are in Sedona may not qualify for this particular program.”

“Staff was directed to come back with an amended scope of services that was kind of Sedona-specific, to serve the local community, and make sure that the persons that we were served had a verifiable Sedona connection,” Blum continued. “There were some challenges with that, because it reduces the number of households that are being served and it’s pretty much unlikely the city will expend the full grant. Additionally, the Department of Housing may prefer a broader service area.”

The alternative option, Blum said, would be “to request a transfer of the grant to a qualified nonprofit,” which would “expand housing opportunities for more people, and it would also ensure data collection for future policy decisions.”

“Staff recommendation is to transfer the grant to a qualified nonprofit,” Blum concluded.

In discussion with ADOH, “we learned about this distinction between the two definitions of homelessness that would not allow us to serve the students at the school district,” City Manager Anette Spickard added. With regard to staff’s estimate that the amended scope of work would only affect about 25 families, instead of the 103 estimated in the original proposal, “ADOH was a little concerned that would be too small and not meet the legislature’s intent for this grant.”

“Our grant would actually just be transferred back to ADOH for them to administer directly,” Spickard said. She clarified that council could ask staff to set up a separate city-funded program to benefit homeless students.

Councilwoman Kathy Kinsella asked what would happen to the unexpended funds if the city was unable to spend them all due to a reduced scope of work.

Since it was a reimbursement grant, “it just stays with the state,” Blum said.

“Do we have reason to think that Catholic Charities will still be the qualified service provider when the grant is reassigned?” Kinsella asked.

“My understanding is that they would work with them,” Spickard said. “They would still have this network of referrals happening.”

Councilman Brian Fultz asked staff to assess ADOH’s response to the council’s desire for “this really strong nexus.”

“They were a little lukewarm about our original request to scale it down to just the Sedona nexus because it doesn’t meet the full intent of the legislature,” Spickard said. “I don’t think they would accept the transfer and then only spend the money on Sedona nexus people. I think they will do Verde Valley region because that’s the underserved community in the state.”

“So you’re saying a nexus still exists, just the nexus is a wider area of the region,” Kinsella said. Spickard and Blum agreed.

“These are all very soft terms,” Councilwoman Melissa Dunn said. “Is there an assurance that Sedona will be considered as part of the Verde Valley?”

“In the conversation with ADOH staff, they did state clearly to me that when we request the transfer of the grant, that we could identify some terms for that, and they threw things out like, you will get data and reporting that you request, things like that, which tells me that we have some influence on what that new contract’s going to look like with Catholic Charities,” Spickard said.

Public Comments

“I do support you all looking at a regional solution to a regional challenge,” Sedona Chamber of Commerce President David Key said. “I think that feels appropriate.”

“The rental assistance funding … would have a direct and immediate impact. It could help families in our program move more quickly into permanent housing,” said Elizabeth Slane of Hope House of Sedona. “Anything that help the homeless in Sedona I think need to be considered.”

“I support the idea of moving these funds either the original plan, which is, what, phase two, where we contracted with Catholic Charities, or we give to ADOH and have them allocate it,” Jo Martin said. “We are relying on the administration of the state to give us help … We’re trusting the state to help our community instead of us maybe having more control over those funds.”

“The grant is a solution in search of a problem,” Bill Noonan said. “It’s a bit of an affront to the democratic process that the city reconsidered applying for this grant or that the state of Arizona is still trying to foist it on us through this NGO.”

Council Comments

“Nobody denies that there are homeless people here, but there is a perspective about whether it is a big monumental problem deserving of big government resources or not, and when we’ve spent no money, essentially, on it, to go from that to $875,000 in two years is a pretty big ramp-up,” Fultz said. “I support moving that money back to ADOH. I certainly hope that we will provide direction that says that any recipient needs to have a strong nexus then to the Verde Valley so it’s not a ‘come one, come all,’ it’s not an incentive for van lifers to participate.”

“I would go with moving ADOH money further into the region,” Dunn said. “I would like for us to have some kind of assurance that people who are in Sedona have a way of getting resources, whether it’s at the library or wherever.”

“I also support moving the grant from Sedona to an NGO and serving the Verde Valley,” Vice Mayor Holli Ploog said. She added that the number of people to whom the original plan proposed to provide assistance “was more than we had in Sedona to serve.”

“I support the money going back to ADOH … the homelessness here is a regional issue,” Councilman Derek Pfaff said. “I don’t think we attach strings to it. We’re trying to have it both ways.”

“Regional solutions are the right approach,” Councilman Pete Furman said. “We need to be good partners in the Verde Valley on this issue.”

“I think it’s important to make sure the full amount of money that’s available from the state can be utilized,” Kinsella said.

“I don’t support putting restrictions on ADOH. They know what they’re doing, they do it best,” Mayor Scott Jablow said. The council then voted to send the money back.

Sedona City Council votes 6-1 to annex 3,422 acres – Sedona Red Rock News

In five minutes, Sedona got about 30% bigger — or rather, it will on Thursday, April 24, when the annexation of 3,422 acres west of town takes effect.

The Sedona City Council approved the annexation ordinance in a 6-1 vote, with Councilman Pete Furman opposed, on March 25.

City Attorney Kurt Christianson called council’s attention to “one little unique bit of information that came out during the preparation of the ordinance.”

“As required by state law, all the area annexed will be zoned to the city’s most — basically the same zoning the county has. It can’t be any less or more restrictive, we need to match it as best as we can,” Christianson said. “I thought originally that all the property was the county’s RCU-2A, so two units an acre of residential. Turns out this one little section right here by the Cultural Park is basically one unit an acre instead of the two units an acre. So this little square right here, this is the section 16, town ship 17, north range 5, shall be zoned city of Sedona RS-35, so that corresponds pretty well. The whole rest of the annexation area will automatically be zoned per the ordinance RS-70.”

“That’s kind of a lot to say about nothing because none of this can be developed, necessarily,” Christianson added.

He also noted that staff would likely ask for the city’s wastewater treatment plant to be rezoned to Community Facilities at some point in the future.

“It’s a little bit strange, but we’ll probably move the city limit signs,” Christianson said. “We’ll probably move it and-or duplicate it, and put another one on [State Route] 89A right by the wastewater treatment plant.”

There was no public or council comments and no discussion prior to the vote.

The annexation will become effective 30 days after the approval of the ordinance, which Christianson said would be April 24.

Council plans three Uptown kiosks, removal of trail information – Sedona Red Rock News

The Sedona City Council approved a new contract with the Sedona Chamber of Commerce for operation of the Uptown Visitor Center on March 11, as well as authorizing city staff to spend $115,000 installing three information kiosks.

Visitor Center

City Communications Manager Lauren Browne said that the city’s Tourism Advisory Board had recommended that the physical Visitor Center be maintained permanently on the basis of the existing 80-20 funding model split between the city and the chamber, respectively, as well as suggesting the introduction of other elements such as “a curated trail map to assist with visitor management” and “an artificial intelligence chatbot.”

“To me it’s very impersonal,” Mayor Scott Jablow said of the chatbot concept. “I hate the AI.”

Browne also said that city staff were in the process of having the Visitor Center wrapped with the city’s branding information, for which the city is paying.

The Visitor Center’s bed tax funded expenses budget for FY25 was $426,535, of which the city’s share was $341,228, while the proposed FY26 contract put the center’s budget at $439,300 with a city contribution of $351,440. The contract also gave the city the option to renew for FY27 for $358,892.

The city’s FY25 tourism and economic initiatives budget was $2,097,730.

Chamber president David Key attributed the budget’s growth to factors including building maintenance, an expected increase in utility costs due to Arizona Water Company’s proposed 48% rate increase and salary increases. “We’ve got good people, we’re going to keep them and we’re going to keep them happy,” Key said.

Key said that the Visitor Center saw 156,713 walk-in visitors in fiscal year 2024 against a goal of 150,000, with volunteers providing a total of 7,076 hours to operate the center for 57 hours per week. For FY25 so far, the center has seen 75,051 visitors, or 50% of its goal, compared to 43% of the goal at the same time last year.

“We moved from a mortgage interest reimbursement style to a rent, and that rent of $25,500 for a year for a prop erty of that size in Uptown is really a great rate, to say the least,” Key said. “We moved from two full-time staff to one part-time director, eight part-time people” as well as about 30 volunteers. Citing information provided by Sedona Historical Museum Executive Director Nate Meyers, Key noted that the museum saw an estimated $22,000 in revenue from admissions and gift shop sales in 2024 attributed to Visitor Center referrals.

Key added that part of the center’s community value would derive from its promotion of visitation that was “eco-conscious, conscious of the residents here.”

Tourism Manager Andrew Grossman connected the role of the Visitor Center to city efforts to control visitors.

“We want to be able to control the narrative about how we want you experience the expectations that we set around responsible and respectful use,” Grossman said. “That’s really what our marketing campaigns are designed to be.”

“The challenge is that it’s a lot of decentralized actors that are the ones that are sharing information to visitors,” Grossman continued. “How we present information to get you to come to Sedona should reflect the similar type of information you get when you arrive, and allows us to really kind of control to make sure that the presentation is what we want. We’ll continue to lean into this idea of reputation management.”

“How can the [Sedona] Lodging Council, and vis-a-vis the private sector industry here, the tourism businesses, share that communication?” Grossman asked, discussing city staff’s initiatives to get hotels to share city messaging. “It becomes the role of the private sector to communicate after the bookings.”

‘Giant Cellphones’

Grossman presented the council with a proposal to install two or three digital information kiosks — which Councilman Brian Fultz described as “giant cellphones” — in “priority visitor locations” in Uptown to promote city messaging and steer tourists to certain locations.

“Some folks were engaging with it, but then they would come up to the counter to validate what they were getting from the kiosk, so it didn’t really save time,” former chamber President Michelle Kostecki told council in April 2024 when discussing possible kiosks.

“If we can create a more informed visitor that understands our expectations of them, understands our recommendations for how we would curate this place, ideally they’ll move faster or with less friction,” Grossman said. “A digital kiosk strategy helps us not only communicate that we have additional touch points but gives us a way to report on the actual engagements.”

Grossman said digital kiosks displaying trail maps would allow city staff to determine which trails are displayed on those maps.

“We can essentially curate our own custom maps within AllTrails, so we can define which trails show up on the map,” Grossman said. “We know that the social trails are on AllTrails. I met with them this month, and I understand that there’s a way that we can help getting a vendor on board to go into Open Street Maps to recategorize the presentation of social trails or non-system trails, and that essentially deprioritizes them on this.”

“Hypothetically, I can toggle on and off trails throughout the day,” Grossman said. “We can control the narrative around what we want you to hike, and we can share that with everybody, and we can change it in real time.” Grossman also said that he was negotiating with map providers to remove social trails from their systems entirely and suggested the idea of including a large photo of Devil’s Bridge with each kiosk for tourists to take photos with instead of hiking to the formation.

Social trails are regularly used shortcuts or detours off designated trails.

Comments

“None of us could imagine having visitor services in Sedona without a physical Visitor Center,” TAB member and Keep Sedona Beautiful President Craig Swanson said.

“Visitors will benefit from quick access to information through these tools while still having the ability to talk with a friendly, knowledge able volunteer and staff at the Visitor Center,” Lodging Council President Cheryl Barron said.

Chamber Visitor Services Director Victoria Latunski said international visitors especially appreciate a face to-face experience with Visitor Center volunteers.

“Personally, I’m resistant, as I do not love technology,” Dyanna Nichols said. “Even though I am opposed, I feel that it’s a great move for our city.”

Fultz said he felt compelled to respect the TAB’s recommendations and would support both proposals.

“Mayor, the kiosks are not for you, Mr. I-don’t-like AI-chatbots,” Fultz said. “I think it’s pretty cool.”

“I will not complain about $30,000 giant cellphones now,” Fultz added.

“I have never been a fan of the Visitor Center in Uptown,” Councilwoman Melissa Dunn said. “I’m willing to fund it for another year because I would love to get more information about what people are actually doing in the Visitor Center.”

“Recently I was overseas and they’re everywhere, kiosks,” Vice Mayor Holli Ploog said. “I support the one-year extension … and the technology now.”

Councilman Derek Pfaff said that after thinking cutting the Visitor Center could save money, “I am definitely in favor of funding it for another year. I think it’s great for people to have the one-on-one.”

“The kiosks I feel differently about,” Pfaff added. “The technology already exists right on our phones. I think we could accomplish the same thing with signs advertising our website.”

Councilman Pete Furman said he was “uncomfortable” with the Visitor Center giving business or restaurant recommendations instead of encouraging visitors to stay longer or directing them, but would support the contract renewal as well as the kiosks.

“I think this is the way of the future,” Councilwoman Kathy Kinsella said of the kiosks. “This actually might entice people to go to the Visitor Center.”

“In Uptown I think the kiosk is important,” Jablow said.

Council approved the chamber contract by a 7-0 vote and the kiosk purchase by a 6-1 vote, with Pfaff opposed to the latter.

City supports staff bid for federal housing grant – Sedona Red Rock News

The Sedona City Council voted on March 11 to support a Low-Income Housing Tax Credit application by HS Development Partners, of Ohio, for funding for a proposed three-story, 36-unit apartment complex that could be built on a parcel the city recently purchased at 2411 W. State Route 89A, along with approving future negotiation by city staff of a lease option agreement for the land if the LIHTC application is successful.

Housing Manager Jeanne Blum said that the site’s proximity to supermarkets, parks and trails would make the application more competitive and noted that the deadline for submission for 9% LIHTC financing is Tuesday, April 1.

“Because of the shortened timeframe and the need to get the application in to ADOH really soon here on April 1, we didn’t feel there was going to be enough time to completely negotiate a land lease agreement right now,” City Attorney Kurt Christianson said. “The only thing council’s approving tonight is this option agreement contingent upon those two things happening: First, they get a 9% award, and second, council and the developer’s able to come to an agreement on the final land lease.”

The city received three proposals for the site in response to its Jan. 2 request for proposals. While HS Development Partners received the highest total score from city staff, Spire Development scored higher in the LIHTC experience and financing feasibility categories.

City Council did not vote to purchase the property until Jan. 28.

The proposed name for the development is “The Flats on Blue Heron,” and the buildings are intended to include equal numbers of one-, two- and three-bedroom apartments, priced at or below 60% of median household income.

“The actual architectural design and the aesthetics of the plan is expected to change,” Blum said.

Developer Matt Shoemacher added that under the LIHTC rules, they can adjust the numbers of differently-sized units as long as the total number of units does not change.

Proposed rents will not be based on the amount of space rented but rather on the income of each individual renter, and are planned to vary between $547 and $933 for a one bedroom unit, $747 and $1,120 for a two-bedroom unit and $863 and $1,295 for a three-bedroom unit.

Blum said that the estimated cost of the project is $19 million, or $527,778 per unit, compared to an estimated $466,666 per unit for HS Development Partners’ 30-unit Villas on Shelby project, which has not yet begun construction. HS Development Partners has already requested a $100,000 “soft loan” from the city on the grounds that it will improve the application’s chances for approval.

“It’s all about getting the points for the application,” Blum said.

“Where are we with the Shelby project?” Mayor Scott Jablow asked. “Tell me why we should move forward with your company … you don’t have a shovel in the ground with the project you have now.”

“We are very close to closing,” Shoemacher said. “All our financing is done. We are working on the final documents with the city of Sedona now. Our plans are being resubmitted back to the city tomorrow morning on some minor modifications, so those are basically the few main items we have left. We expect a ground-breaking, closing, the beginning of April.”

“I’m a little concerned now to give another contract to the same company, quite honestly,” Jablow said.

Shoemacher had previously stated in January 2024 that he expected to begin construction of the Villas at Shelby project in “mid-spring, and then it should be about a 14 month construction process, maybe sooner.”

Sedona Chamber of Commerce President and CEO David Key and Sedona Lodging Council President Cheryl Barron spoke in support during the public comment period, with Barron telling the council about one of her housekeepers, a single parent, who was required by the state to rent a two-bedroom apartment she could not afford in order to retain custody of her son.

“This is why we bought this property,” Councilman Derek Pfaff said. “I’m actually really happy to see we have something on the table this quick.”

“No other decisions have been made on this project except perhaps the number of units,” Councilman Pete Furman said. “With that understanding, I am supporting the project.”

“I think this is a really perfect location for a project of this type,” Councilwoman Kathy Kinsella said.

The council voted unanimously to support the application.

The Arizona Department of Housing will announce successful LIHTC awardees in the state on Monday, June 2.