Tempe
Real Estate

Tempe plans to buy historic Monti’s La Casa Vieja for $10

(Source: AZCentral): Jerod MacDonald-Evoy –  One of the Valley’s oldest buildings, the adobe home of Arizona politician Carl Hayden which became a popular restaurant, could be sold to Tempe for $10.

The proposal is easing worries about the former Monti’s La Casa Vieja, now referred to as the Hayden House, which sat empty and in growing disrepair after closing in 2014.

The developer who owns the historic building began restoration work earlier this year after city leaders raised concerns about a fire in an adjacent shed and other problems. The developer also agreed to sell the building to the city in an amended development agreement the Tempe City Council will vote on Aug. 30

Victor Linoff, a Tempe Historic Preservation Foundation member, called the revised deal “the most encouraging word we have heard since Monti’s closed in 2014.”

Colorado-based developer Hensel Phelps will complete the restoration before handing ownership over to the city. The deadline to finish the work is June 30, 2020, Tempe Historic Preservation Officer John Southard said.

The developer must completely restore the Hayden House before moving forward with other plans for the 2.5-acre property at the southwest corner of Mill Avenue and Rio Salado Parkway.

Hensel Phelps plans to build an office complex and parking garage, along with a hotel or multi-family housing with possible restaurant or retail space, according to the development agreement. The project was described as a 15-story office building and 16-story hotel when first unveiled in 2014.

City leaders still must figure out how they will use the adobe house that was built in 1873.

Some have suggested offices, a visitors’ center or a community hub.

“We are working to ensure there will be a way for people to connect with this historic building as well,” Tempe spokeswoman Kris Baxter-Ging said. “It’s important to the city.”

The home was built by Charles Trumbull Hayden, considered Tempe’s founder. His son, Carl Hayden, served as Arizona’s first congressman at statehood and served in the senate through 1968.

“Best use of a historic property is one that ensures it is used,” Southard said.

The developer will give the city $100,000 to continue to maintain the site.

Preserving fragile adobe

The new deal calls for more space between the proposed commercial development and the adobe home, increasing the separation from 7 feet to 20 feet.

Linoff, the historian, had previously said the risks of such close construction “are enough to send a chill down your spine.”

The Hayden House was built with unreinforced adobe, which is water, clay, sand and straw.

The new setbacks “gives added comfort that this fragile structure can survive the massive disturbances caused by construction,” Linoff said.

The new deal details how the developer will restore the property, including:

  • demolishing all “non-historic portions” of the Hayden House.
  • repairing and replacing core components of the building.
  • adding two unisex bathrooms.
  • repainting the interior and exterior.
  • adding new interior lights.

Tax break remains

The revised development agreement maintains a tax break that was part of the original deal approved in 2014.

The tax break comes in the form of a Government Property Lease Excise Tax, or GPLET.

A GPLET allows cities to lease property they own to private parties and collect a lease excise tax instead of a property tax because government-owned real estate doesn’t pay property taxes. The developer transfers a property’s ownership to the city, which then charges a GPLET rate instead of the heftier property-tax rate.

This tax incentive is under fire by lawmakers and facing a lawsuit that could threaten its use. Here’s a quick primer on the Government Property Lease Excise Tax. Wochit

Sometimes the government abates the payment of all taxes for a time.

Tempe’s deal with Hensel Phelps forgoes excise tax collections for the first eight years when the developer will pay $10 annually.

The deal requires the developer to pay $50,000 to the Tempe Union High School Education Foundation and $50,000 to the Tempe Impact Education Foundation to make up for the lost property taxes, which are a major funding source for school districts.

Also as part of the deal, the developer will give the city access to 15 parking spaces for the next 99 years in the parking garage proposed as part of the site’s commercial development.