Community groups are pushing back against the company behind a plan to develop the Circle Records and Tapes building after the group put out statements saying it had addressed concerns about the project and the use of a tax break to help subsidize it.
“We say something, they hear something different,” said Sherry Rampy, president of the Roosevelt Action Association, in reference to the letter Empire Group LLC sent to her Thursday. “They say they complied with it. They didn’t.”
Empire’s note follows a letter from the RAA to city officials saying they won’t support the use of a tax incentive, known as the Government Property Lease Excise Tax. But the RAA’s letter did ask for the tax break negotiations with the city to be reopened.
The latest development plan, released July 27, is for a $70 million 19-story residential and retail tower and has been met with mixed reviews. Parts of the 69-year-old building were demolished in April, sparking community backlash.
Empire has tied aspects of the development such as historic preservation, local art and affordable housing to the incentive, leading some to wonder if the building is being held hostage for public money. GPLET agreements can lead to increases in the property tax burden for those who own land and buildings in the area.
Michael Scerbo, an Empire representative said in an email on July 27 that the art, preservation and affordable housing would be dependent on a tax break. In an email, Jordan Rose, a another representative, addressed the concern of the potential for demolition.
“We are only focused on best case scenarios not worst case ones such as those on Roosevelt Row which saw complete razing of sites,” Rose said.
Rose said the project’s current plan is not possible without a GPLET agreement.
“There are just financial realities to doing such a large scale project,” she said.
Empire’s response letter to the RAA was sent Thursday by Rose to address the association’s concerns in writing. The issues allegedly addressed included the preservation of the building, alternative design solutions, funding for historic preservation, museum space and alternative funding sources.
In order to further preserve parts of the building, Empire’s letter said that they hired historic preservation expert Roger Brevoort to analyze the structure and that the new design preserving the “most significant portions” of the building, including the showroom, mezzanine, polished concrete floors, the sign and a portion wrapping into the alley. The developer also will be restoring storefront windows. No construction will be permitted above the showroom, the company said.
Empire said it is “committed to providing substantial funding” for historic preservation, while noting that the specific amount would be discussed with the city.
Rampy disagrees with Empire when they say they are in agreement with the RAA and have addressed concerns.
“They hear what they want to hear, not what was said,” she said. “They pick and choose what they consider to be requests, and even when they answer those requests they don’t actually fulfill them.”
Rampy said she is concerned that supporting a tax incentive on this project would mean Empire would continue to act similarly in the future, especially after they just purchased another building in the warehouse district. She said the letter lacks specifics, including some numbers the RAA suggested. For example, the letter names museum space but there is no specific size, although Rampy said she suggested it be 3,000 square feet.
She said the RAA also suggested that the fund for historic preservation be $150,000 a year, for 8 years. Regardless these suggestions were not meant as a guarantee of support for a tax break, she said.
“That’s part of my own personal frustration is they’re saying discuss it, but they want us to approve something that they’re not actually giving us any real information,” Rampy said. “They are phenomenal at PR, but we just want real answers.”
The RAA’s position is supported by Modern Phoenix, an organization who have advocated for the preservation of the building. Founder, Alison King said the organization stands in solidarity with the RAA.
Shifting the burden
GPLET agreements have their own controversial history with downtown development. A 2014 Downtown Devil report found non-GPLET property owners in downtown had been helping subsidize the discounted tax rates GPLET developments paid because of a change in the formula used to calculate state funding for school districts. According to the revised state law, which passed in 2009, GPLET properties are included in a district’s taxable value, potentially reducing the total state assistance provided for districts with many GPLET properties by a significant amount. The net effect was that property owners paid for the portion of the district’s budget that GPLET properties were not paying.
Stacey Champion,a local activist and head of Champion PR, is completely opposed to Empire receiving a tax break, and while she said the design has improved, she feels it does not make up for what she feels was poor behavior on the developer’s end.
“Why should a community have to go through all of that to get a decently designed building? I think that our city needs to stop settling for mediocrity when it comes to design,” she said.
Champion said she will continue to oppose any kind of incentive for Empire because of their behavior. She also started a petition to oppose the possibility of Empire receiving a GPLET agreement. Champion spearheaded another petition in April calling for waiting periods on demolition permits of historic buildings. The Historic Preservation Committee discussed a similar measure which is to be discussed with the possibility for action at the Developmentary Advisory Board on August 1. Empire will also be circulating a petition, Rose said.
Local support
The potential use of an incentive on this project does have some support. In the press release detailing updated plans for the building, the plans have the support of local voices including the daughter of the Jack Stewart, the Stewart Motor Building’s owner.
Wayne Rainey, the owner of the Monorchid art gallery, said he could be supportive of a tax break for the project under certain conditions. He said the project is difficult to get behind because of the controversy with the project, and because granting an incentive would mean taking money away from other uses in the community.
He also said that the affordable housing potential cannot take away from the historic preservation. Advocates have expressed concern that affordable units could help Empire receive a tax break without the historic preservation.
“We’re at a very critical point in the history of our city where some things are going to be built that not everyone loves,” he said. “The fact is there’s a lot of different ideas on how the city should progress and the most important thing to keep in mind is that as we do grow at this stage we make sure we maintain a place for all economic classes. We can’t build a city that’s sustainable that continues to forget its past and its people.”
Contact the reporter at kara.carlson@asu.edu.
