Updated plans to preserve parts of the old Circle Records and Tapes building as part of a new mixed-use development on Central Avenue and the use of a tax incentive to facilitate those plans were met with community skepticism. Even after meetings between the developer and community leaders in recent days, the future of the building remains unclear.
Empire Commercial LLC is planning to build a 19-story residential tower that will incorporate some elements of the current building’s façade. Historic preservationists and community members worry that the development will rid the building, which has stood on the corner of Central Avenue and McKinley Street for 69 years, of its historic character and threaten its ability to be registered as historic. The building originally housed the Stewart Motor Company and is also commonly referred to as the Stewart Motor building.
Compounding community concerns was the developer’s desire for a property tax incentive, known as the Government Property Lease Excise Tax. A GPLET agreement would allow Empire to pay reduced taxes instead of traditional property taxes for up to 25 years.
GPLET agreements are based on a provision in Arizona’s tax code that exempts land owned by governments from property taxes. GPLET allows the city to take over the rights to a piece of land and lease it back to the developer at a significantly reduced rate that replaces the normal property tax. The incentive has been used widely by city government to encourage development downtown, with notable developments like CityScape, the Freeport-McMoran building and Luhrs City Center all having received development agreements of various lengths.
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Larry Lazarus, a land-use attorney who represents the property owners and Empire Commercial, said that without the tax incentive, the entire building would likely be demolished. He said the project’s public benefit includes job creation, historic preservation and affordable housing.
Attendees at a Roosevelt Neighborhood Community meeting on Monday evening discussed the updated plans, but no clear consensus emerged on what input to provide to Empire.
The Roosevelt Action Association will send a collective letter sometime in the next few days detailing their concerns and feedback. The Roosevelt Neighborhood community will have a meeting next Monday with the developers present to address these concerns. During a tour of the building on Monday, CCBG architects, who were hired by the developer, outlined
the portions of the building that would be saved, which have expanded to now include adding 15 feet to the façade easement so that it would wrap around into the alley.
The current preservation plan is to maintain the two circular portions of the building and the portion, including the signage, which they hope to restore to be able to rotate again.
They also plan to remove portions of the brick wall on McKinley Street to have open storefront, which Brian Cassidy, the president of CCBG, says would restore it to be more alike to the original Stewart Motor Building. Cassidy said this would be better for any businesses that might move in, and he also wants the preserved spaces to be for public use which is why the space is planned for businesses.
“They will see activated buildings and a really good urban solution for the design overall,” Cassidy said. “You can only go northbound on Central and the first thing they will see is the original portion of the building.”
Empire has proposed a conservation easement and a façade easement on the building, which would conserve the building and stay on the deed for future owners, protecting any preservation efforts.
But the preservation of the portion of the building is not guaranteed, and according to Empire, contingent on the city of Phoenix providing them with a tax break. Without the GPLET agreement, the building will likely be fully demolished.
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Some residents questioned whether the project delivered enough public benefit to justify using GPLET. They also questioned how much of the building should be preserved and whether they are willing to risk full demolition of the building in order to ask that the entire building be saved.
“They’re looking for the GPLET, so that opens the door to negotiation for us,” said Sherry Rampy, president of the Roosevelt Action Association, adding that for community support to occur — whether there is partial or full demolition — the community itself needs to benefit. “As a community we need to figure out what we’re asking for and whether it is all or nothing, sometimes when we ask for all or nothing, we get nothing.”
Unlike normal property taxes, which are based on a property’s value, GPLET rates are based on the size of a property and the buildings on it. City Council would have to approve the use of the tax incentive on this project and could grant Empire with eight property tax-free years after the project is completed.
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.
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Residents also had concerns over how protected the preserved building portions would be under the easement. There were concerns about the potential for the building to no longer qualify for the historic registry, once demolition occurred, even with the easement being put into place.
Some attendees felt that too much focus was being placed on specific benefits rather than conceptual ideas.
“I think what we have to be prepared to do is state principles that we believe in and not spin our wheels redesigning a project for someone else,” said Tim Eigo, chair of the Downtown Voices Steering Committee. “I think we are concerned about saving a building.”
Eigo said that significant community opposition would prevent the use of GPLET. Last month, community efforts resulted in City Council requiring a percentage of a new micro-apartment development’s units to be designated as affordable housing in return for the tax incentive.
Others, including Rampy, felt that other people with smaller concerns deserved to be heard. Rampy said she personally was concerned about completely losing the building based on ideals.
“I’m not willing to risk the building to say this is what the city stands for,” she said. “I’m not willing to play poker with it.”
The most vocal concerns ultimately still related to the historic preservation of the building and the finances.
“This building is not just a Roosevelt building, not just a downtown building, not just a Phoenix building, but an Arizona building,” said Jim McPherson, who is a part of Arizona Preservation Foundation, Evans Churchill and Downtown Voices Coalition.
“This is an important building not just because of its architecture but its history… We need to think of it not just in the context of the brick, but the Phoenix history,” he said.
Editor’s note: Government Property Lease Excise Tax agreements are a complex topic that the Downtown Devil broke down extensively in a previous report. If you’d like to learn more about GPLET you can read the report here.
Contact the reporter at Kara.Carlson@asu.edu.
