Circles developers ask City Council for tax incentive hearing

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The developers recently demolished more of the already partially demolished building prior to requesting a tax incentive hearing from council. (Nicole Neri/DD)
The developers recently demolished more of the already partially demolished building prior to requesting a tax incentive hearing from council. (Nicole Neri/DD)

The developers behind the controversial proposed development at the site of the Circles Records and Tapes building have asked City Council directly for a hearing for consideration of a tax incentive.

The request came during a different development’s hearing for the same type of tax incentive. The comment came directly to the council in what may be an effort to get around recommendations by the city’s Community and Economic Development Department, which has maintained recommendations to keep tax incentive negotiations closed for a year now. This is a position they still maintain.

The proposed project The Stewart, which will be at the site of the Circles Records building, will be developed by the Empire Group. The developers hope to eventually construct a 19-story, multi-family mixed-use project. They have maintained throughout the project the need for a special type of tax break known as a Government Property Lease Excise Tax or GPLET. These agreements work by having the city take over the rights to a piece of land and lease it back to a developer at a reduced rate.

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During the City Council meeting Wednesday, Thomas Galvin of Rose Law Group spoke during the public comment period for another project, the Towers project at Third and Pierce streets. Galvin submitted a neutral comment card on the agenda item and instead immediately began to speak on the Circles project in representation of Empire Group.

“We’ve actually been involved in another exciting project that could bring a GPLET and local development to downtown Phoenix and that is with the Circles building — the Stewart project,” Galvin said. “They have worked for the last nine months with all of the neighbors, in fact have done a terrific job in creating support for this project because they have been able to listen and solicit feedback of the concerns of these folks.”

Roosevelt Action Association and the Urban Phoenix Project have both offered conditional support of the project. Downtown Voices Coalition and the Evans Churchill Community Association have both opposed the tax incentive.

“But what they would like is for council to give them a hearing,” Galvin said. “We congratulate the developer who has a hearing today with the City Council but this project has been unable to get a hearing and we’d like to just get a fair shake. We’d like to have in the sense of fairness a hearing to present a great idea.”

RELATED: Circles development sits in limbo, partially demolished

Phoenix Mayor Greg Stanton cut him off mid-comment, citing that Galvin could not speak on the project because it was not an agenda item.

This tax incentive was granted to the Towers project at the meeting, but has not been a consideration for Circles. The city has not had GPLET negotiations with the developers in the year since the building was partially demolished the first time, sparking community and city backlash. At the time, the Community and Economic Development Department recommended closing tax incentive negotiations, a position they have maintained since.

“Since the item was not in the agenda, City Council could not act on his request to put the item on a future agenda,” Community and Economic Development Director Christine Mackay said over email. “It would have been contrary to the transparency that comes with a formally posted agenda so anyone can see what is being considered.”

For a year, the Community and Economic Development department has recommended the city not hold tax negotiations with the developers. (Nicole Neri/DD)
For a year, the Community and Economic Development department has recommended the city not hold tax negotiations with the developers. (Nicole Neri/DD)

Mackay said the discussion is not planned for any future agenda at this time. She said it is possible for the item to be added to a future agenda. It would have to be recommended by staff for a city manager, added by the mayor or added by three City Council members. Mackay confirmed that the Community and Economic Development Department has maintained recommendations to keep negotiations closed.

District 7 Councilman Michael Nowakowski asked about this project at the council meeting, saying there have been several calls on the Circles building.

“If we can actually put it on our downtown subcommittee or on our agenda for the future, and either vote it up or vote it down, I think we should do that,” Nowakowski said.

Recent demolition of the already partially-demolished building removed more of the back end and middle of the building. A city ordinance passed at the end of last year, which created a 30-day waiting period for public discussion before demolishing a historic building, further halted the project before more demolition continued. The 69-year-old building originally housed the Stewart Motor Company.

Rose Law Group has been representing the developers for a year now. Jordan Rose has been the primary spokesperson for the developers, but said over email Wednesday she is not currently authorized by Empire to speak with the media. Previously, she had not responded to questions and requests to comments since before a 30-day demolition hold was up.

Contact the reporter at Kara.Carlson@asu.edu.

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