Community

City slammed with lawsuit over short-term rentals

By Tommy Acosta, Editor | Sedona-Verde Valley Times

Sedona, AZ - The City of Sedona was slammed Friday, Feb. 29, with a lawsuit filed in the Superior Court of the State of Arizona asking the courts to declare the City’s new ordinance banning the advertising of residential short-term rentals for less than 30 days and the existing City Code prohibiting residential short term rentals unconstitutional and unenforceable.

Plaintiffs Sue Meyer, Paul Kanter, and Foothills Property Management, Inc. are asking the courts that the Ordinance and Code be declared unconstitutional under the U.S. Constitution's Fifth and Fourteenth Amendments and the Arizona Constitution Article 2, Chapter 4.

The plaintiffs also ask for an injunction banning the enforcement of the ordinance while the lawsuit proceeds through the courts, which could be granted within 60-days according to attorneys filing the lawsuit.

The lawsuit, based upon both Federal and State Constitutional Claims, seeks monetary damages and injunctive relief.

Fritz Aspey, Aspey Watkins Diesel, a firm which has in the past successfully defeated the City on matters of Zoning and the Land Development Code; Rick Rumrell of Rumrell, Costabel, Warrington & Block, LLP, an attorney on short-term rental issues who successfully overturned short-term rental ordinances in other cities; and the Pacific Legal Foundation, a non-profit legal foundation and national defender of private property rights, are representing the plaintiffs.

Approximately 450 short-term rental properties in Sedona have been impacted by the new ordinance making it illegal to advertise short-term rentals and by the code prohibiting short-term rentals.

This ordinance was enacted by the Sedona City Council Jan. 22 to put teeth into the Code, on the books since 1995, which made it illegal to rent residential properties for less than 30-days.

According to attorney Rumrell, the case could last a decade before the main legal portions of the lawsuit are decided and all appeals have been exhausted.

“If you add on the damages to the legal costs the City will incur, the cost could be in the millions,” he said. “This lawsuit will have a significant financial effect on the City. This lawsuit deals with constitutional issues dealing with property rights and can go to the State Supreme Court. It’s a high-stakes risk for a local government to interfere with property rights.”

Sedona City Attorney Mike Goimarac said the City was prepared to defend itself against the lawsuit.

“Typically, we do not comment on matters that are in litigation,” he said. “We intend to vigorously defend our decision. We feel we have valid defenses against many of the allegations.

The City has retained an outside law firm, Perkins, Cole, Brown & Bain, to defend itself against the lawsuit.

Brad Plomer, owner of Foothills Property Management Inc., said he was confident the courts will rule in his favor.

“I’m 100 percent sure we will win,” he said. “I would not spend that kind of money to lose in a fight. The City of Sedona has not proven to be overly intelligent at this point.”

City Councilman Rob Adams, who voted to ban advertising of short-term rentals, would not voice an opinion on the City’s chances of winning or the lawsuit itself.

“I’m not sure the Council should be making any comments at this point,” he said.

Short-term property landlord Lenore Rodriquez said she was happy the lawsuit was filed.

“It’s important to move it up a notch,” she said. “The City has not been cooperative and has been reluctant to negotiate. We had hoped to work it out by regulating short-term rentals, enforcing code violations but the City doesn’t want to talk.”

The core issues, claims and allegations expressed by the plaintiffs in their lawsuit are as follows: