The Roosevelt Action Association voted for the first time to conditionally support a tax incentive on the controversial mixed-use residential project at the site of the Circles Records and Tapes building known as the Stewart project.
The support will come in the form of a letter asking the mayor’s office, City Council, the Community and Economic Development Department and the Historic Preservation Office to re-engage in negotiations with the Empire Group, the developer for the project, to award the property a GPLET with further stipulations.
RAA members voted 27-8 to adopt the motion to send a letter, which included conditions from a letter Empire sent RAA President Sherry Rampy on Friday. The city has not had negotiations with the developer since the partial demolition of the building in April.
“This is unique in that we’ve lost a lot of buildings, we haven’t partially lost a lot of buildings,” Rampy said. “I think supporting this is the best option given what our options are.”
The GPLET agreement, which the RAA voted to conditionally support, is a tax incentive which would allow Empire to pay reduced taxes instead of traditional property taxes for up to 25 years. The arrangements 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 conditions include $3.1 million in payments over 18 years for historic preservation; public art, which includes three murals and a sculpture; inclusion of a Historic Interpretation Exhibit; and a guarantee Empire will not sell for at least a year after a GPLET is approved. They also promised to negotiate with Phoenix Elementary School District in relation to the GPLET to cover any losses in tax revenue that would occur under the agreement.
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It also outlined which portions of the building would be preserved, including the showroom, mezzanine, and rotating spire. Nothing will be built above the showroom. The 69-year-old building originally housed the Stewart Motor company. Anne Stewart Zell and Terry Stewart, daughters of the original owner Jack Stewart, were present and approved of the movement in support.
A minimum of $25,000 a year would be allocated within the Roosevelt Action Association borders. The total funds would be given to the Arizona Community Foundation and dispersed with direction from the City of Phoenix Historic Preservation Office and approval from the Historic Preservation Commission.
As part of the agreement, the RAA also requested the Community and Economic Development Department adopted the Downtown Voices Coalition stance position paper on GPLETs. The DVC has yet to adopt this paper themselves, but it recommends more clear guidelines on the use of the tax incentive, including a recommendation that any land where a historically designated or eligible building has been removed within the last 10 years will not be able to receive a GPLET without approval of the Historic Preservation Commission.
Jordan Rose, a representative of Empire, said the conditions outlined in the letter require a GPLET agreement. The plans for the building were presented by Rose and Richard Felker, a principal with Empire, followed by community questions, concerns and discussions. There were concerns from community members about the precedent the project could set and that conditions would be followed through.
“It is reparations for damage that has already been done,” RAA secretary Joan Kelchner said. “I don’t consider it a precedent. I don’t want to see the building razed.”
Some community members argued the payments were not enough, but Felker said any violation of conditions would have consequences.
“There will be teeth in this. It is going to be a contract with the City and it will be dealt with,” Felker said. Rose added that violations would result in a loss of GPLET.
Felker was confident the agreement would carry through to the city.
“There’s been enough conversation that it seems like this would be okay with them,” he said. “If anything does change we would have to come back and talk about it. Something they could put teeth in so feet are held to the fire.”
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A future GPLET agreement with the city would include the outlined plans, and would carry over to any future developers if the property is sold. The plans presented at the meeting did not include affordable housing, a part of the project which has drawn mixed stances in the past.
“I just cannot thank the board, Sherry (Rampy), and many of you in this room enough in your persistence, insisting on excellence and continuing conversation. I know this continues to be a challenging situation and your commitment to your community and your willingness to continue to work with us has been incredible,” Rose said.
The conditional support follows the unanimous decision by the RAA in July to not support the potential use of a tax break on the Circles Records and Tapes building project after months of discussion. They sent a letter to city officials stating they felt they were at an impasse and asked for the city to reopen negotiations with Empire. Evans Churchill Community Association also sent a letter backing the RAA.
Empire had sent a letter of its own saying it had addressed all community concerns, but the RAA refuted that claim, leading to the Community and Economic Development Department recommending the city continue to not negotiate with the developers on GPLET.
Contact the reporter at kara.carlson@asu.edu.
