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Lawsuits, Laws and Taxes: What’s Behind Roosevelt Row’s Business Improvement District?

Published: Friday, September 16, 2016 - 4:26pm
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Amanda LaCasse/Roosevelt Row CDC
Roosevelt Row in downtown Phoenix.

Roosevelt Row is one of the most vibrant parts of downtown Phoenix. It’s helped spur the redevelopment of the city center in recent years, but, now, the arts district is in the middle of a controversy that keeps ramping up.

“I like to talk with some friends and colleagues about the critically important difference between politics and policy and this is, I think, an example of politics preempting policy,” said Greg Esser, executive director of the Roosevelt Row Community Development Corporation.

Esser is one of the community leaders who has been pushing for the creation of a Business Improvement District in the area, which would tax the district’s property owners to cover services beyond what the city normally provides.

In January, the city approved the Business Improvement District after much debate and controversy over a map of the properties involved. In response, residents who were against the tax worked with the state legislature to pass a law effectively blocking the creation of the business district in Roosevelt Row.

Now, the City of Phoenix announced it’s suing the state over the new law

Business Improvement Districts aren’t new. There are others in the state and even another in downtown Phoenix

These districts cover things like landscape maintenance and security and, Esser said, those things are going to be more and more important in the future on Roosevelt Row, given the number of new residents that are about to live in new housing developments that are being built there now.

He said this money would go toward critically important services as the area grows.

“Sadly, there are a number of new plants that were recently installed in the area that are stressed and starting to die because of lack of maintenance. Picking up garbage, providing garbage receptacles in the right of way,” he said. “I pick up garbage when I walk in the neighborhood today, I can’t do that when there are 1,000 new people living in this area.”

But some property owners in the district aren’t happy about paying for services like these. Phoenix City Councilman Jim Waring said many of those property owners came to him with complaints, saying they didn’t get complete information about the Business Improvement District from the city.

“There was [sic] a whole host of people who were saying, ‘that’s not fair, nobody asked me,’ or ‘that’s not fair, I didn’t understand the implications, nobody really contacted me,’” Waring said. “I do not blame the citizens for being mad and going to the state legislature and asking for redress there, which they got. The bill passed, Governor Ducey signed it.”

The bill changed the requirements needed to form Business Improvement Districts statewide.

You used to be able to go forward with one of these districts unless half of the area’s property owners submitted a protest. Now, it’s the other way around. You’d have to get a petition of support signed by more than half of the landowners in the area in order to make a new Business Improvement District. 

Esser said that’s obviously much harder to achieve, but, to Waring, it should be difficult.

“To my mind, you’re talking about taking people’s money, and so if it is going to be skewed one way or another, shouldn’t it be skewed more to the … not taking money unless you’re absolutely sure that most people are okay with this?” Waring asked.

The city of Phoenix said in a statement it is seeking a declaratory judgment finding the law unconstitutional and unenforceable.

“For many years the businesses and residents in the Roosevelt Row District have worked toward a Business Improvement District,” the statement said. “Unfortunately, the legislature passed a law after the fact that the city of Phoenix believes targets the Roosevelt Business Improvement District unconstitutionally.”

Esser said they’ll win in the end, because he thinks they have the majority of property owners in the area on their side.

“The quality of this place has been largely defined by artists and people in the cultural community really calling this home and making long-term investments,” he said. “So, the flashpoint is interesting only in that it was a quick, rapid response in opposition to a long term community investment that’s continuing regardless of what happens with the lawsuit or with a change at the legislature. This work will be ongoing regardless.” 

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