The city of Phoenix will be in court on Wednesday over a lawsuit against its arrangement waiving $8 million in property taxes for a private real estate developer downtown.
The Arizona Court of Appeals will hear the case, Paulin v. City of Phoenix. The Goldwater Institute filed the lawsuit in May 2022.
Goldwater Institute Vice President for Litigation Jon Riches claimed the property tax exemption violated both the Arizona Constitution and court precedent prohibiting the use of taxpayer dollars to benefit private interests.
“Arizona courts have been clear time and again: taxpayer dollars are to be put to public use, not to benefit private, special interests,” said Riches.
Phoenix waived the property taxes on a downtown high-rise development project by assuming the legal title from real estate developer Hubbard Street Group and leasing the property back to them. The city did so in order to capitalize on Arizona’s Government Property Lease Excise Tax (GPLET) abatement provisions. In so doing, the city of Phoenix ensured the Hubbard Street Group protection would be saved from having to pay millions in property taxes for the term of the lease — eight years. After that better part of the decade is up, the city will return the title back to the developer.
The Goldwater Institute maintains that this workaround adopted by the city amounts to, essentially, tax evasion: an abuse of GPLET and a loss of a revenue stream at a burden to other taxpayers.
As reported previously, the city of Phoenix assumed ownership after it declared the developer’s project, “Skye on 6th,” to be part of a slum or blighted area. As part of their arrangement with the city’s assumption of their legal title to the development, Hubbard Street Group agreed to pay over $500,000 in rent to the city, $30,000 to two school districts, and dedicate 10 percent of its residential units to workforce housing.
Skye on 6th is marketed as “the height of luxury.” The most affordable rooms (studios listed at 400 square feet) start at $1,500 a month. The most expensive rooms are on their penthouse floor, where rent starts at $4,500 a month and goes up to over $6,700 a month.
The project cost nearly $88 million to develop.
One of the represented taxpayers in the case, Bramley Paulin, successfully sued the city last year, Paulin v. Gallego, when he challenged the city’s restriction on temporary signage for the Super Bowl LVII. The Maricopa County Superior Court ruled the city’s resolution on signage was an unconstitutional restraint on free speech and delegation of government power.
Paulin and the other taxpayer in the case, Mat Englehorn, reside and own businesses in the Phoenix area.
The oral arguments are scheduled to occur on Wednesday at 9:30 am.
In 2020, the Maricopa County Superior Court ruled against a similar GPLET arrangement between the city of Phoenix and another high-rise developer.
In his ruling, Superior Court Judge Christopher Coury questioned whether GPLET could be relevant any longer given the tendency for abuse.
“This judicial officer questions whether the death knell for the GPLET’s usefulness has rung,” wrote Coury.
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The outgoing Scottsdale City Council has busied itself with passing certain left-leaning priorities.
The election of several new faces to the Scottsdale City Council ensured what effectively amounted to an overhaul of the status quo, which was a council in favor of more progressive policymaking such as sustainability plans aligning with those proposals put forth by the Green New Deal.
The incumbent council members lost their seats, several to more conservative challengers. Mayor Dave Ortega lost to Lisa Borowsky, though he beat her previously in 2020. Adam Kwasman and Maryann McAllen were newly elected, ousting incumbents Tammy Caputi and Tom Durham.
Kwasman said in a post on X that the outgoing “lame duck” council was focusing its last weeks in office on “slamming through” action items on apartments, appointments to citizens’ commissions, and a sustainability plan. Kwasman said the current council has exhibited “extremely regrettable” behavior.
“We will do all we can to reverse the damage done,” said Kwasman.
It is extremely regrettable to see what is likely to come out of the Scottsdale City Council over the next few weeks.
Rather than create a smooth transition with the newly-mandated council majority, the lame duck council is slamming through thousands of apartments, appointing…
Earlier this month, the council worked on the nominations for 14 committee vacancies across the Environmental Advisory Commission, Historic Preservation Commision, Library Board, McDowell Sonoran Preserve Commission, Neighborhood Advisory Commission, Paths and Trails Subcommittee, and Veterans Advisory Commission.
Scottsdale Vice Mayor Barry Graham claimed that the outgoing council majority and city staff were working to limit public opposition to the lineup of more progressive policymaking in the works.
Graham asserted that city staff had “misrepresented” one of Tuesday night’s contested agenda items as a discussion-only item — a rezoning and development agreement to establish headquarters and housing for the Scottsdale-based weapons defense company Axon — but then agendized it as an action item.
“[City staff] are warning that residents may be turned away at the door and sent across the street to an ‘overflow’ waiting area… a strategy that may favor the applicant,” said Graham.
Tonight, Scottsdale City Council Votes on Axon's Apartment Application.
City staff—who misrepresented the item as a "discussion" when it's agendized for "action"—are warning that residents may be turned away at the door and sent across the street to an "overflow" waiting area… pic.twitter.com/Wn1q172KG4
Last week, Graham addressed the outgoing councilmembers’ commitment to assigning their preferred committee members.
“Because commission terms last for years, I requested that my colleagues postpone their lame duck December appointments of commissioners by two weeks as a good-faith gesture toward the newly-elected council,” said Graham. “Even though you chose not to re-elect any of them, the outgoing members insist on pushing through their midnight appointments.”
Later this month, the council plans to review a sustainability plan to implement “extreme heat” strategies.
Although council seats are nonpartisan, most of the incoming council members have Republican backgrounds. McAllen was the only registered Democrat in the group and received backing from Democratic groups.
Kwasman formerly served as a Republican lawmaker in the Arizona House from 2013 to 2015, and ran for Congress in 2014.
Jan Dubauskas, who won through her primary victory in August, has been an active member in local Republican organizations, serving as a precinct committeewoman as well as Palo Verde Republican Women vice chair of community outreach.
Mayor-elect Borowsky has advocated for fiscal conservatism to complement and boost Scottsdale’s economy. Borowsky previously served on the council from 2009 to 2013, and ran for Congress as a Republican in 2012.
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Scottsdale Unified School District (SUSD) will no longer be using X to stay engaged with the community, with the given reason being a lack of a “family-friendly” environment.
SUSD made the announcement last week, also alluding to board policy necessitating their ceasing the use of X. The district will remain on Facebook and Instagram instead.
“In line with board policy IJNDB and our commitment to safety, SUSD schools are stepping away from X to prioritize family-friendly engagement,” said SUSD. “For updates, find us on Facebook, Instagram, or visit http://susd.org. Let’s stay connected in spaces that uphold our values.”
In line with board policy IJNDB and our commitment to safety, SUSD schools are stepping away from X to prioritize family-friendly engagement. For updates, find us on Facebook, Instagram, or visit https://t.co/EN0kZ8ruFl. Let’s stay connected in spaces that uphold our values. pic.twitter.com/ZJUyD9fi8D
— Scottsdale Unified School District (@ScottsdaleUSD) November 12, 2024
IJNDB refers to policy on the use of technology resources in instruction. Per that policy, the district implements technology protections against visual depictions that are obscene, child pornography, or content which may be discerned as harmful to minors.
Yet, the district allows children access to sexually explicit books and content in its libraries and classrooms.
In stepping away from the use of X, the district also remarked that X failed to align with its values. In addition to protections for sexually explicit materials, SUSD holds values such as transgenderism in minors, social emotional learning, and critical race theory.
SUSD made their announcement a week after Election Day, when Donald Trump won the presidency and Republicans secured a trifecta.
Tech billionaire and Tesla CEO Elon Musk bought Twitter (now X) for the express purpose of preserving and supporting free speech following the 2020 election. During that election, the silencing of certain right-wing voices occurred under social media platforms such as Twitter and Big Tech companies.
SUSD lost nearly 500 students over the course of this past year, amounting to millions in lost revenue. The auditor general has scored the district as “high risk” due to its continued decline in enrollment. Enrollment has declined 10 percent under the tenure of SUSD Superintendent Scott Menzel, and reports have emerged of record staff turnover.
Additionally, SUSD spending on classrooms and teachers have hit another historical low for this school year: 54 percent versus nearly 64 percent from 20 years ago, just over the lowest fiscal year (2017, which amounted to 53 percent).
Parent watchdog group Scottsdale Unites for Education Integrity said the nine percent decrease signified a $40 million redirection of funds from academic achievement.
Menzel also enjoyed a pay raise earlier this semester despite falling short of academic performance goals: achievements in math, English-Language Arts (ELA), and science fell below desired outcomes. Over 8,000 students weren’t proficient in ELA, over 9,000 weren’t proficient in math, and over 12,000 weren’t proficient in science.
The only goals which Menzel accomplished were nonacademic, and they amounted to less than half of the goals set: increases in attendance rates, student participation in extracurricular and cocurricular activities, and certified staff retention; an establishment of a baseline for work-based learning opportunities and hours completed using Major Clarity; and production of a decision-making matrix and at least one proposal for action by June.
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The federal government unlawfully denied Grand Canyon University (GCU) its nonprofit status, per a new federal court ruling.
Last week, the Ninth Circuit Court of Appeals ruled in Grand Canyon University v. Miguel Cardona that the U.S. Department of Education (ED) was wrong to refuse the Christian university their nonprofit status.
Circuit Judge Daniel Collins reversed the summary judgment by District Court Judge Susan Bolton favoring ED. Collins remanded GCU’s nonprofit status back to ED for review.
ED had determined that GCU’s organizing documents satisfied the IRS organizational test’s requirements; however, ED denied GCU when it came to the operational test. ED determined that GCU’s primary activities and its stream of revenue both didn’t benefit the university. Collins disagreed.
Collins ruled that ED had invoked the wrong legal standards, going beyond the Higher Education Act (HEA) requirements to impose exceeding IRS regulations. Rather, Collins ruled that HEA standards only require ED to determine whether GCU was owned and operated by a nonprofit corporation and whether GCU satisfied the no-inurement requirement.
“The Department invoked the wrong legal standards by relying on IRS regulations that impose requirements that go well beyond the HEA’s requirements and instead implement a portion of § 501(c)(3) that has no counterpart in the definition of the term ‘nonprofit’ set forth in HEA § 103(13),” ruled Collins.
The inurement requirement allows nonprofits to buy from for-profit companies at fair market value.
GCU has been battling with ED over its nonprofit status since 2019, when ED denied the IRS status granted to GCU. GCU had historically been a nonprofit school, save a stint in the early 2000s when the university went for-profit to avoid bankruptcy.
After GCU sued ED in 2021 over the denial, ED launched a coordinated investigation with the Federal Trade Commission and Department of Veterans Affairs for unfair or deceptive practices.
Last year, ED levied a $38 million fine against GCU.
GCU maintained that ED targeted them over their ideological differences, since they are a Christian university.
Bob Romantic, GCU executive director of the office of communications and public relations, said in a press release that the nonprofit status would allow GCU to thrive more than it has been able to under a for-profit status.
“While the university remains exceedingly proud of what it achieved during its short stint as a for-profit institution, building up GCU from the brink of bankruptcy into the largest Christian university in the country, nonprofit status best allows the university to accomplish its goals around research, grant writing, development, being full members of the NCAA, etc.,” said Romantic. “Today’s decision is a long-awaited correction to the Department’s unlawful application of a standard that improperly denied GCU of its nonprofit status, and we are hopeful for a quick affirmation of the university as a nonprofit institution.”
President-elect Donald Trump pledged to dismantle ED “very early” in his administration in a campaign video last year, citing America’s high spending and poor student outcomes compared to other nations.
“[We’re] sending all education and education work and needs back to the states. We want them to run the education of our children, because they’ll do a much better job of it. You can’t do worse,” said Trump. “We’re going to end education coming out of Washington, D.C., we’re going to close it up, all those buildings all over the place, and yeah people that, in many cases, hate our children. We’re going to send it all back to the states.”
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Arizona schools will be receiving a supply of overdose kits to address the increased impact of drugs on students.
The Arizona Department of Emergency & Military Affairs (DEMA) began delivering over 16,000 Narcan anti-overdose kits to schools on Wednesday. The Arizona Department of Education (AZED) oversaw the initial deliveries across all 15 counties.
In a press release, Superintendent Tom Horne said these kits were a lifesaving preventative to the increased presence of illicit substances in the state.
“Lives will be saved because these kits will be in schools throughout Arizona,” said Horne. “The STOP-IT Task Force has done incredible work to address the Fentanyl crisis among school-aged children and this is a major step to protecting the lives of students and raising awareness of this terrible scourge.”
The Narcan kit deliveries are part of AZED’s Overdose Preparedness & Intelligence Taskforce (STOP-IT), a new task force established this year to address the growing opioid epidemic. The idea for placing kits in schools came out of a meeting back in May.
The Arizona Department of Health Services (AZDHS) provided the Narcan kits at no cost to the state, and the Arizona Health Care Cost Containment System (AHCCCS) will provide training.
The kits come with flyers on training resources, information on county health agency partners, an announcement of an upcoming comprehensive STOP-IT Toolkit release, and a QR code taking the user to real-time training on Naloxone Resources from AHCCCS.
STOP-IT co-chairs are Holly Geyer from the Mayo Clinic and Mike Kurtenbach with AZED, leading over 60 representatives across various government agencies, schools, healthcare entities, law enforcement, and other organizations.
Geyer credited the initiative’s success to the collaborative strengths of Arizona agencies in Thursday’s press release.
“The STOP-IT naloxone distribution initiative could not have materialized without the unprecedented collaboration between the Department of Education, the Department of Health, AHCCCS and the National Guard,” said Geyer. “The representatives appointed through these agencies proved themselves strategic problem solvers who prioritized the mission and produced outcomes that far exceeded the taskforce’s original targets. Because of their resolve, we are proud to offer schools more than just naloxone. We can offer confidence in the safety of our school campuses and parental peace of mind.”
DEMA director Kerry Muehlenbeck said that their team’s logistical support for tackling drug overdose incidents ensured a better approach to their ultimate goal of reducing drug demand.
“Through this multi-agency initiative, we build stronger communities and support wellness in our future generations,” said Muehlenbeck.
Schools signed up for Narcan kits through the AZED’s online form, with the permission of their district or charter approval first. Further information about the kit distribution and application was submitted in a memo sent to schools across the state last month.
Per AZED, these overdose kits will be continually replenished to ensure schools’ continued ability to handle opioid emergencies.
Arizona reported over 1,900 opioid-related deaths and over 4,000 overdoses last year. 26 of those opioid-related deaths were among minors (those under the age of 17).
So far this year, AZDHS has recorded over 3,200 non-fatal opioid overdoses and over 1,000 confirmed opioid deaths. The total deaths among minors for this year amount to less than 10.
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