Business

Judge: Phoenix must start over with Roosevelt Row business district

(Source: AZCentral): Brenna Goth

Some landowners concerned about the changing face of Roosevelt Row led the effort to make it an established district, paid for by a new property tax within its boundaries. Those opposed argued the process was unfair and successfully sought help from the state Legislature.

The resulting law requires cities to prove support for districts, instead of a lack of opposition. That change applies to the Roosevelt district, Kiley ruled.

The legal argument at a hearing earlier this month focused mainly on what counts as a map. The law was retroactive to Jan. 1, 2016, and applies to districts that didn’t approve a boundary map before then.

Phoenix argued it met that deadline with early City Council decisions and could move forward under the old rules.

Kiley, though, agreed with the state that Phoenix didn’t approve the type of map required by law. He wrote the law meant to target the Roosevelt district, and the court should not interpret the definition of a map “in a manner that would defeat the Legislature’s intention.”

Challenges moving forward with district

Some owners of Roosevelt Row's shops, restaurants and
Nick Oza/The Republic

Some owners of Roosevelt Row’s shops, restaurants and galleries in downtown Phoenix spent roughly two years designing a proposal to incorporate the arts corridor into a business improvement district,but less than two months after Phoenix approved parts of the plan, the state Legislature blocked it with a bill signed by Gov. Doug Ducey to retroactively change the rules for how districts are formed. The new rules shift the balance of power in the neighborhood and give several opposing landowners more control over its approval.

The court also rejected Phoenix’s argument that the law is special legislation that unconstitutionally targets Roosevelt Row. Kiley said the law will first be applied to the Roosevelt district, but that it’s not a unique burden.

Property owners said earlier this month that there’s still interest in moving forward with a business-improvement district. However, gaining enough support will be difficult — if not impossible — using the original boundaries.

Some City Council members also opposed the district and the fight to save it.

Councilman Sal DiCiccio said in a statement that the ruling was a “huge loss for politicians pushing big taxes on small business owners.”