Arizona justices deny city’s petition to review lower court’s ruling; orders Sedona to pay Goldwater Institute’s legal fees

The Arizona Supreme Court on June 26 denied a petition for review from the city of Sedona to hear an appeal in Oak Creek Hospitality, LLC v. City of Sedona. The denial ends the city’s challenge to a Nov. 26, 2025, Arizona Court of Appeals ruling that individual mobile homes may be used as short-term rentals. The decision clears the way for STRs at the 59-space Oak Creek Mobilodge, whose owners were represented by the Goldwater Institute.

“The city of Sedona was disappointed by the Appeals Court ruling and that the Arizona Supreme Court denied review,” city spokeswoman Julie Graham wrote. “We respect the legal process and are moving forward based on the ruling.”

“We hold that the definition of ‘vacation rental or short-term rental’ in Arizona Revised Statutes Section 9-500.39 — ‘the Short-Term Rental Statute’ — includes individual mobile home units,” Judge Jennifer Perkins, of the Arizona Court of Appeals Division One, wrote in the November decision. “We therefore reverse the superior court’s order dismissing Oak Creek’s complaint and remand for proceedings consistent with this opinion.”

Oak Creek Hospitality purchased the Oak Creek Mobilodge mobile home park at 1156 SR 179, in September 2023. The city refused to grant a short-term rental permit to the new owners. In response, the company and the Goldwater Institute, a conservative public policy think, filed suit in Yavapai County Superior Court on Aug. 7, 2024, against the city, then-Mayor Scott Jablow and City Manager Anette Spickard.

Senate Bill 1350, codified in part as Arizona Revised Statute §9-500.39, prohibits municipalities from banning STRs and defines them to include “any individually or collectively owned single-family or one-to-four-family house or dwelling unit.”

The courts had to decide whether a single mobile home counts as a single-family or one-to-four-family house or dwelling unit under the STR statute.

“The city argues this language refers to one form of land use — the unified use of an entire parcel of real property for single- or one-to-four-family residential purposes,” Perkins wrote. “Because the Oak Creek Mobilodge’s land use is a 59-space mobile home park, the city asserts the Mobilodge cannot be a single-family or one-to-four-family house or dwelling unit. Oak Creek counters that the statute protects short-term rentals of all mobile homes in a mobile home park.”

The appeals court found the statute’s terms “consistently refer” to dwelling structures rather than to a property’s overall land use, and concluded Sedona may not prohibit mobile homes from being used as STRs, calling the city’s contrary position preempted by state law.

“Oak Creek has succeeded in showing that the city’s interpretation of the Short-Term Rental Statute violates the statute’s plain language,” Perkins wrote. “A fee award is therefore appropriate.”

The proceeding entries on Jan. 6, 2026, list the statement of attorney fees and costs for the appellant was granted in the amount of $26,896.50 and costs in the amount of $382.34, with an Aug. 4 superior court judgment ordering the city to pay $419.22 in costs and $17,882.00 in attorney’s fees, amounts Graham confirmed as the Goldwater Institute’s fees and costs at the Superior Court level and for the appeal, respectively.

“The Arizona Supreme Court’s denial of the city’s petition for review was the last step in the legal process,” Graham wrote. “No other actions are available to the city.”