Axon, Scottsdale attorney lock horns over city official's claim of intimidation by company

Scottsdale's city attorney confirmed in a sharply worded letter that an Axon employee had contacted a city planning commissioner's boss about the official's opposition to a controversial project.

"This type of action tends to raise public concern about the integrity of the city’s public hearing process," City Attorney Sherry Scott wrote in a letter dated Friday. "It can also have a chilling effect on ... public officials’ willingness to serve in their volunteer capacity."

The letter drew a quick rebuttal from Axon. In a missive back to Scottsdale, the company CEO denied any impropriety by its executives and suggested a conflict of interest on the part of the planning commissioner.

Axon first pitched a proposal in August to build nearly 2,000 apartment units near its planned headquarters in north Scottsdale, on Hayden Road south of Loop 101. As it stands, apartments are not allowed on that property, so Axon was hoping the commission would support a rezoning.

At a Jan. 24 meeting, the pitch was poorly received by the entire commission, but Planning Commissioner Christian Serena was among the most vocal. He cast the sole vote against letting the company tweak its proposal and return later, preferring instead to take a final "yes" or "no" vote when the project clearly did not have enough commission support to pass.

Serena wrote in an email to Scott last month that the day after the commission meeting, "a person who claimed to represent Axon's leadership contacted my employer wanting to discuss my public comments" about the project.

Scott confirmed in the letter, addressed to Axon's lawyer, an Axon employee did contact Serena's employer, Merrill Lynch.

"It is apparent to me that an Axon employee did contact Commissioner Serena’s employer to discuss dissatisfaction with Commissioner Serena’s public hearing comments," Scott wrote.

Scott's letter continued, "Thankfully, by making the city aware of what transpired, (Serena did) his part to protect the integrity of the City’s process."

The initial article: Scottsdale investigating claim Axon tried to intimidate city official over HQ expansion

Scott did not explicitly accuse Axon of trying to intimidate Serena in an effort to sway his vote on the proposal. The apartment project has drawn backlash from nearby residents who have raised concerns about traffic and claim they were subject to a bait-and-switch when Axon proposed residential in a place it was outright prohibited.

Councilmember Betty Janik said she believes pressuring Serena was Axon's goal. She told The Republic that the Axon employee reaching out to Serena's boss "would appear to be an act of intimidation" aimed at getting the commissioner to change his position.

"This is a very, very serious situation. Serena is a person of very high integrity who has served the Planning Commission as a volunteer for years," Janik said.

Scott acknowledged in her letter the Axon employee, who has not been named, may have contacted Serena's boss independently. But whether the person in question acted alone or with Axon's backing, the city attorney sent a clear message to the company: Cut it out and rein in your employees.

"I am respectfully requesting that Axon now do its part. I strongly urge Axon to instruct its employees that they should not be contacting the private employers of volunteer City Board and Commission Members regarding their public work on behalf of the City," Scott wrote in the letter, addressed to zoning attorney Charles Huellmantel.

City spokespeople did not immediately respond to The Republic's questions about the letter.

'Political theater': Axon CEO cites potential conflict for zoning official

Axon CEO Rick Smith hit back on Saturday with a three-page response to the city attorney's letter in which he denied any wrongdoing, claimed Serena had a conflict of interest related to the Axon project and accused some within the city of "prioritizing political theater" because they communicated with the media about the issue.

"Your March 1st letter was in the hands of multiple media outlets within hours of receipt. Up to this time, we limited our correspondence with media out of respect for the integrity of the process," Smith's letter read. "Unfortunately, it appears some within the City are more focused on prioritizing political theater."

Smith's letter contends Serena may have had a conflict of interest in deciding on Axon's project because "Merrill Lynch (and its parent company) Bank of America have been unsuccessful in winning Axon’s business" despite approaching the company on "several occasions."

Smith detailed his understanding of the incident with Serena's employer, saying that an employee of Axon spoke with his "personal banker at Merrill Lynch to inquire whether Merrill Lynch had any policies relating to potential conflicts of interest given that Mr. Serena was publicly undermining Axon’s project after Axon declined to do business with his company."

Smith's letter says the Axon employee specifically asked his Merrill Lynch contact not to discuss the matter with Serena because he did not want to pressure the commissioner.

The letter concludes with Smith asking multiple questions to the city about a potential conflict of interest.

Zoning official denies conflict, thanks city attorney

Serena does not work with commercial accounts at Merrill Lynch, so he would not have been involved with any attempts by the firm to acquire Axon's corporate business, he said.

The commissioner said he was "pleased that my statement has been proven to be accurate and true" by the city attorney.

"I appreciate the city attorney's work to confirm the facts," he said. "It's important that we protected the integrity of the process for both the city and residents."

What is the status of the apartment proposal?

Consideration of the proposed apartment project was "continued," or delayed, indefinitely at the Feb. 14 Planning Commission meeting.

It's unclear when it might come up again, if it ever comes up at all.

Smith, Axon's CEO, took aim at Scottsdale during the company’s fourth-quarter earnings call on Feb. 27, calling out an “antidevelopment” sentiment in the city and mentioning a possibility to move the company to another market.

He doubled down on that threat in his response to the city attorney's letter.

"You mentioned this situation may have a chilling effect," he wrote to Scott. "This public spectacle is having a chilling effect on both our interest in staying in Scottsdale and surely other employers are watching how this is being handled."

Reporter Sam Kmack covers Tempe, Scottsdale and Chandler. Follow him on X @KmackSam or reach him at sam.kmack@arizonarepublic.com.

This article originally appeared on Arizona Republic: Axon, Scottsdale attorney lock horns over intimidation claims