Council Reaches Settlement with RD Olson, Concluding Heritage Lodge Lawsuit

The Sedona City Council has approved a settlement agreement regarding the Oak Creek Heritage Lodge hotel project. On December 10, the council voted 5-2 to reverse its earlier decision made on June 25, which had rejected the Planning and Zoning Commission’s unanimous approval of the development based on environmental and planning concerns. This reversal paves the way for the project to proceed.

The city faced a lawsuit from RD Olson Development, the property’s owner, which claimed the council acted arbitrarily in overturning the commission’s approval. The lawsuit was lodged in Yavapai County Superior Court on July 24, prompting the city to reconsider its earlier decision.

Prior to this settlement, a court hearing scheduled for January 15 would have required further legal deliberation. Under the new agreement, RD Olson will adjust the project’s layout, decreasing the size of the southern cluster of buildings while increasing parking capacity from 90 to 118 spaces. The developer will also limit event attendance and customer access from outside guests, alongside contributing $550,000 toward Sedona’s planned creekwalk.

The creekwalk project’s estimated cost is around $5.5 million, and the contribution will be required only when total funding is secured. The City Council’s renewed push for the creekwalk will be featured in the upcoming December 25 issue of the Sedona Red Rock News.

In return for these concessions, the council withdrew its previous opposition and approved the development review, exempting the Heritage Lodge from new development fees. As part of the discussion, City Attorney Kurt Christianson emphasized the council’s authority to settle disputes and clarified that no new traffic studies were necessary, as the impacts are anticipated to remain similar or slightly reduced due to restrictions on guests.

Public response varied during the council meeting, with a majority supporting the settlement agreement. Residents expressed a range of opinions, highlighting both concerns and enthusiasm for the project. Neighbor Jake Weber criticized the reliance on attorneys for development proposals, while Fred Shinn called for the project to become a prideful fixture in Sedona.

On the contrary, some residents voiced strong objections, fearing negative impacts on the local environment and the potential influx of tourists. Miriam Wackerly, a neighbor, expressed concerns over increased visitor traffic and pollution in nearby Oak Creek. Timothy LaSota criticized the council’s decision, suggesting it undermined established procedures and community trust.

Council members reflected similar divisions, with some acknowledging the necessity of compromise while voicing lingering concerns over traffic and environmental impacts. Councilman Derek Pfaff humorously noted that Sedona did not need another resort, yet found himself unable to justify a denial based on the current zoning regulations. Meanwhile, Mayor Scott Jablow recognized the improvements made in the revised plans.

The final vote resulted in a decision to move forward with the development, with Fultz and Dunn expressing reservations. Notably absent from discussions about environmental concerns was a mention of the yellow-billed cuckoo, identified earlier by some residents as a species potentially affected by the project’s location.