The Payson Town Council Thursday night rejected the rezoning of land for the Mogollon Ridge subdivision at 2009 N. McLane Road, after about an hour of discussion.
Glen Groenke, who was representing a number of people living in Payson Pines, the property adjacent to Mogollon Ridge, told the council it needed to listen to the residents.
Barbara Gooch said the project would lead to problems in density, traffic and water.
Mark Perry, one of the developers for the project, said they have come back with changes, and those changes were accepted.
Lucy Groenke said the town needs to put in place a plan for citizen participation meetings, so both sides know what the other one is feeling.
Gary Sparkman said he is not opposed to development as long as they do it right.
But he acknowledged that the developer, Terra Capital, could only put so much money toward solving the drainage problem and still come out with a profit.
Steve Carder, another developer for the project, said his company thinks the drainage problems would be fixed by the development, not make it worse.
The number of homes for the Mogollon Ridge subdivision, according to the rezoning that failed, would not have exceeded 26 lots and 63 condominiums.
Lori Meyers said if the town is too poor to fix problems with the streets and drainage situations, then it is too poor to add another subdivision.
"A lot of people left after the first reading (Feb. 15) feeling very disheartened," Meyers said. "As you can see, a lot of people have lost their trust and faith in their town government.
"The bottom line is (the developer) is here to make money, not to make things better for Payson," she added.
"We feel we don't have to give everything to get a new road and drainage system. We do not want to be the cheap date to the dance."
Mayor Bob Edwards said the council is going to push to get more money for drainage and streets in next year's budget.
Council member Mike Vogel said in the time he has served on the council, he has never heard anyone say they want a development to go up.
The second reading failed 4-2, with Vogel and John Wilson voting in favor of the rezoning. Councilor Su Connell left the meeting early and was not in attendance for the vote.