The latest episode of the AZ Big Podcast with Michael & Amy has officially dropped. Episode 167 features shareholder Brian Greathouse & associate Madison Leake, who talk about zoning challenges when it comes to real estate development.
Listen to more of the AZ Big Podcast here.
Transcript:
Michael Gossie
Welcome to the AZ Big Podcast, sponsored by Burch & Cracchiolo. I'm Michael Gossie, Editor-in-Chief at AZ Big Media, and I'm joined by my co-host, our publisher, Amy Lindsey. Amy, I'm super excited about this podcast episode.Amy Lindsey
Some people from our favorite law firm here in Arizona.Michael Gossie
Some people from our favorite law firm, and some people that are going to talk about some stuff that we talked about this a little before, and I laughed so hard talking about some of the experiences they go through, but Brian Greathouse, Partner at Burch & Cracchiolo and Madison Leake, Associate at Burch & Cracchiolo, thank you so much for being here.Amy Lindsey
Thank you for joining us. All right, Brian, we'll start out with you. You were a civil engineer before going to law school.What made you make that shift?
Brian Greathouse
Well, I was laid off, for one.Amy Lindsey
Yeah, but a lot of people are laid off, and they don't decide, let me tackle law school.Brian Greathouse
It was the recession.Amy Lindsey
Okay.Brian Greathouse
I was laid off with a whole bunch of people. Real estate development was in the dumps. I briefly had a job out with the Navy as a civilian, and just decided that wasn't for me and went back to law school and went down that path.During the prior decade of working in real estate development, though, I worked with a lot of zoning attorneys, so I knew I wanted to do that.
Amy Lindsey
So you knew kind of what direction you were taking.Brian Greathouse
Yeah.Amy Lindsey
Oh, that's great.Michael Gossie
And Madison, you were a rock star coming out of law school. What made you decide to go into land use and zoning? What made you decide to focus on that?Madison Leake
Yeah, my first year of law school, I started working at the firm. I started working at Burch & Cracchiolo, and I said, I have no idea what type of law I want to practice. I will do anything.Thank you so much for giving me a job. And I think not more than about a week into my working there, my first year of law school, I got sucked into the zoning world. Had never even heard the word zoning before, but just took to it really well and really enjoyed it.
And never really done anything else. So I can't give any other legal advice.
Amy Lindsey
Don't come see you for divorces or...Madison Leake
Absolutely not. Just like, no.Amy Lindsey
Okay. So what are some of the challenges you face in your land use and zoning practice?Brian Greathouse
I think it's going to be a big topic today, opposition. Opposition is very strong on darn near any case we work on. Not always, but it's usually there.People can't agree with themselves, so how are they supposed to agree on what type of development's going on a corner or a mid-block or wherever it is? They are becoming more and more boisterous and loud, and they're being heard by electeds. So it's challenging.
They're being empowered with their voices. But you'll get in a room with 40 people, and they're all in opposition to your case, but the only people that show up are the people in opposition. Right.
Michael Gossie
It's the vocal minority. Right.Brian Greathouse
So they may be 5% of all neighbors that live in the area, exactly vocal minority, but it's hard to go out there and get the supporters to come out. Oftentimes, you have to run it kind of like an election, where you have to go out door to door and find the people who want it who aren't vocal because they're okay with it.Michael Gossie
So Madison, how many zoning meetings are you going to a week?Madison Leake
Between hearings, neighborhood meetings, everything, probably two to three a week. And kind of like Brian said, we actually made this joke the other day to a client and a city planner. Nothing we work on is or almost nothing we work on is completely unopposed.When I first started doing this work, I was very naive, and I would say, oh, well, this is such an exciting proposal, so no one's going to have a problem with it, right? And Brian laughed at me. Now I've learned that no matter what you're putting in someone, someone is going to like it, and also someone's going to not like it.
Michael Gossie
You know, when we talked before, you cracked me up because you told me you have a unique way of handling people yelling at you all the time. Can you talk a little bit about that?Madison Leake
She didn't know that was coming over the microphone, yep. I did not. Are you just saying, oh, just not take it too seriously?Or too personally?
Michael Gossie
You said you grew up with all brothers.Madison Leake
Yeah. I have super thick skin, and I think all of us do. Brian has a great way of just not reacting negatively, no matter what insult is hurled his way.And you have to remember that even though the attack can be personal sometimes, it's not. You know, and we've spoken about this a lot. A lot of it's just emotion, and a lot of it is coming from a place of uncertainty, which can create a little bit of panic, so you have to remember that as people are hurling stuff towards you that can sound rude or angry or maybe even aggressive or a little crazy.
It's not personal. And you also have, number two, there is some common ground with that person that you can find.
Michael Gossie
Right, right. So what's the current climate in terms of opposition to different projects?Madison Leake
I think Brian can speak better to that, because he's been around longer.Brian Greathouse
It's kind of like taking a toy away from a child when they throw a temper tantrum.Amy Lindsey
I did not think you were going to say that. We're being honest today. So what are some of the things that you're trying to pass that people seem to be so in opposition of?Brian Greathouse
All kinds of things. Housing, different goods and services that we need in the communities, but nobody wants it near them. They say, well, there's a vacant lot down there, why don't you go put it there?And there's a variety of reasons why you can't do that. Might not be for sale, might be state land, might be BLM land, flood control property. There's a whole bunch of reasons why you can't just pick up and go start somewhere else.
Madison Leake
And that person wouldn't like it over there.Brian Greathouse
True. So if you move to some other lot, there's somebody else that's going to be unhappy. Those folks that live down there might be unhappy.And it's like things say they want a restaurant, like why don't you put a restaurant here instead of multifamily? And then it becomes, well, we don't like that type of restaurant. It's either has drive-thru or it's a chain restaurant.
We want a really nice sit-down restaurant that's boutique-ish. So they're really getting into specifically what they want on that property. But if they want that on that property, they should explore that development opportunity themselves.
Amy Lindsey
Well, Arizona is growing, so I can imagine there's a lot of opposition out there. Everybody likes their nice, quiet street. They don't exist anymore.You have to move different locations to find that anymore.
Michael Gossie
So it's your job to kind of get these projects passed. So do you ever get the opposition and you're just like, oh, man, I'm never going to get through this?Madison Leake
Yeah. There are times where we've told clients that based on what we're hearing from the neighborhood and council that we don't recommend they go forward. And usually that's after a lot of conversations with the municipality and neighbors.And after we've done our due diligence, we don't usually just take the first no. If we did, I don't think we would get hardly anything. But a lot of times we talk to the municipality and they say, go chat with the neighbors.
Come back. Let's keep going back and forth. But there are times where we tell clients that we can't recommend they keep going.
Brian Greathouse
Yeah. I often take it as an educational tour out in the neighborhood, trying to separate people's perceptions or fears and facts and opinions. We get in a lot of conversations where people are thinking they're talking facts, but they're not actually expressing their opinions.So I try to gather those facts, whether it's data or studies or examples of other developments near residential areas or other areas.
Michael Gossie
Are there parts of the valley that opposition is greater or people are more vocal in their opposition?Brian Greathouse
The more affluent areas, definitely.Madison Leake
I would say and areas that there is at least a perception that they're more rural or more not in the city. And sometimes that's not actually true anymore. Well, I was going to say they were.Amy Lindsey
Maybe that was the case five or 10 years ago, but the city's growing around everybody.Madison Leake
And that's growing pains. And there's fairness in that. Change is hard.Michael Gossie
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That's bcattorneys.com. Now Madison, I've interviewed you before. So you guys have to do a lot of work with the liquor licensing folks in terms of like projects.
How do you work together on projects like that?
Madison Leake
It kind of depends which way it comes in, right? A client could come to our firm and say, hey, I want to do a bar here. What do I need?And then we look at the zoning, they need something zoning-wise. And then we might reach out to the liquor guys and say, hey, they also need a liquor license. The opposite also happens where one of their clients comes to them for a liquor license and then somewhere through that, one of us figures out that they also need something on the zoning side.
So it's great having Ryan and Jake at the firm because we can collaborate on all that and not have to send it outside. And I think it's best for the client to handle it all together.
Michael Gossie
Is it easier getting a project that includes a liquor license pass than like a multifamily project?Brian Greathouse
Probably. We don't do liquor licensing, so I've been in the hearing rooms when they're at the city council level. That's just a recommendation.They make a recommendation to the state liquor board. That's where the decision gets made. I deal with multifamily stuff, not liquor stuff.
So I think that is more contentious, typically.
Madison Leake
And we hear the liquor-related complaints on the zoning side for getting a bar, a convenience store, even a restaurant with alcohol approved. They're not arguing with us over the liquor license necessarily, but it's, oh my gosh, there's going to be people drinking on the streets.Amy Lindsey
So how do you work with neighbors that are strongly opposed to a development going in their area?Brian Greathouse
A lot of time. Try to, you know, we care for what they're saying. And I know they don't believe we do, but we are listening to them.We're trying to come up with solutions for the challenges that they pose to us to answer. And we just, we spend time with them.
Madison Leake
Yeah, and we take, I think sometimes there's the false perception that we brush it off. But like Brian said, we take it really seriously. We hear things.We hear concerns about traffic, about light, about noise. We go back and we have those studies performed by professionals so we can present the information to them. We can't change people's minds necessarily, but we at least want them making their decisions with information.
And that's kind of like Brian mentioned, separating the facts and the opinion of, is there actually a traffic problem or is there just a perceived? Exactly.
Michael Gossie
So how important is that coming in doing those studies after the fact in terms of like easing their concerns?Madison Leake
I think it's everything. And I think it's one of the most important tools that we have. And I also think sometimes it's helpful for them to hear from people other than us, you know, hear it from the professional traffic engineer, from the sound engineer.Now, sometimes they say, okay, I still don't believe you.
Brian Greathouse
Another key aspect is compromise. You know, you start, you start at one end of the spectrum. They might want something at the other end of the spectrum.And if you can bring something into the hearing room with council members who are making decisions, if it's somewhere in between, you can show real good faith effort on trying to alleviate their concerns.
Amy Lindsey
You kind of sound like you're like a neighborhood counselor more than a law. Like, let me hear your concerns.Michael Gossie
So are there benefits to going into the neighborhoods earlier rather than later in terms of easing their concerns or knowing what the problems might be that they're going to present?Brian Greathouse
Yeah, absolutely. If someone finds out about a new project when you send them a mailer or they find out about it on a sign on the site, that's not nearly as good as doing early outreach, early outreach to them and letting them know what's coming down the pipeline. And then we take all that information and we take it to the cities or the counties to show them here's the state of where we're at, we're going to file an application, and then we move through the process.Michael Gossie
So if I'm somebody who lives in a neighborhood and I know a project's coming in that I'm opposed to, what advice do you have to them in terms of making sure that their voice is heard or that their concerns are addressed? Do you have advice to them how they present that maybe more effectively?Madison Leake
I think it's really helpful when we don't hear things for the first time in the hearing room. I mean, sometimes we do extensive neighborhood outreach and then people show up to city council that we've never heard from before. And at that point, I don't want to say it's too late, but like Brian said, we're always open to compromise, you know, to working with them.And so I think the earlier the better.
Michael Gossie
And is there advice that you have for developers in terms of like making sure that all these concerns don't come up at the hearing meeting for the first time?Brian Greathouse
Hire a zoning lawyer early in the process.Madison Leake
Absolutely.Brian Greathouse
It's true. We get a lot of calls after things have already gone sideways and it's harder to unwind things. We have a certain way that we go through the process and we usually bring a clean case to the hearing room or cleaner than it would have been otherwise.So early on, engage a zoning lawyer.
Michael Gossie
When you say early on, like what's the ideal time? What's your perfect timeline?Brian Greathouse
When they have a letter of intent to buy the property.Amy Lindsey
Oh, even that early.Brian Greathouse
Yeah, they're negotiating purchase and sale agreements.We can tell them the risk about what this case might be, what path it might go down. We can usually tell them timeline things so they can contract appropriately. Sometimes their timelines and their contracts for closing is a little too tight for how long it actually takes to get a case through the pipeline.
Madison Leake
I think it's even helpful when they're looking at a site. Sometimes clients say, hey, we're looking at this site. What's your initial impression?What's the area? How's the council? How are the neighbors?
Or even we're looking at three sites. Do you have any feedback? I literally think the earlier the better.
Amy Lindsey
I can't imagine they wouldn't. I have to assume it's very costly for them to be in the process of development and realize there's a big conflict and having to go to a hearing.Brian Greathouse
More sophisticated developers do. They know that's very important. Others start down the path themselves or start down the path with a civil engineering firm or a planning firm.I don't want to talk bad about anybody, but we do this professionally. Very challenging cases, so we know what to do and when to do it.
Amy Lindsey
Well, you're looking for different things. Everybody specializes in stay in your area, but that definitely sounds like it's great advice.Madison Leake
Yeah. We have the relationships with municipalities to be able to get that really honest feedback that I think is really valuable to clients.Brian Greathouse
Yeah. I can look up on ChatGPT right now the process for zoning, and it almost seems like anybody can do it, but there's a lot in between the lines.Amy Lindsey
Yeah. You could rewrite that.Brian Greathouse
Yeah.Amy Lindsey
Are there any trends or sectors we should be watching in 2025 when it comes to land and zoning use?Michael Gossie
Yeah. Everybody I talk to says the closest thing to a crystal ball in commercial real estate is talking to a land use and zoning attorney. What do you guys see coming up in the future?Brian Greathouse
It's an interesting time right now with the election, interest rates, lending, a lot of things are unknown. We definitely need housing. Last I heard, like last year, there were 60,000 people or so moving to Arizona a year.We're definitely not building that many housing units for them, and we're already low on supply. I don't know the exact numbers today. Maybe they're a little higher, but so housing is going to be a need as long as people keep moving to Arizona and jobs are created here.
Goods and services for those people that move here, medical care things like hospitals and clinics and even things like substance abuse centers and things to help our homeless population and housing for those folks.
Michael Gossie
And Madison, last time I interviewed you, you said retail was kind of a hot spot. Is it still?Madison Leake
I think it always is, and I think that as one area of the market might slow down a little bit, others pick up. If multifamily is a little bit slow, then industrial or commercial is going to come in and be going after those sites. So I don't know.I've heard over my shortish time that, oh, it's going to get slow, and there are moments where development is slower than others, but I don't think it's ever come to a screeching halt the way we worry it will because other areas just take advantage of a different sector being slow.
Michael Gossie
Is there a favorite project that you've each worked on?Madison Leake
Some of my favorite stuff that we've worked on together actually just from like a meaningfulness is the work, Brian's on the board of Native American Connections, and they provide just amazing services in terms of substance abuse, housing, and working on that stuff I think to both of us is really meaningful.Brian Greathouse
Yeah, that project went into a residential area, and Native American Connections is a very high quality- Amazing organization.Madison Leake
Absolutely.Brian Greathouse
Great programs from their health programs to their housing programs, but there's a lot of fear when those types of uses go in. But if it's the right operator who is professional, they can solve and alleviate a lot of those problems and concerns that folks have. That particular project, we were in a room with like 150 people all yelling and screaming.Amy Lindsey
Wow. You guys have to have thick skin.Michael Gossie
Well, fantastic. Well, thank you so much for listening to the AZ Big Podcast with Michael and Amy. For the latest and greatest business, real estate, and lifestyle news, check out the all new azbigmedia.com.Once again, thank you to our sponsors, Burch & Cracchiolo, and thank you so much to Brian Greathouse and Madison Leake from Burch & Cracchiolo. If you need a great zoning or land use attorney, make sure you give them a call, bcattorneys.com. Thank you so much, guys.