Last October, the Arizona Department of Housing published a Notice of Funding Availability which resulted in more than 20 developers expressing interest in sharing $24.5 million which came available to help fund affordable housing projects.
Nine applications came in by the end of January for a total of nearly 1,200 units; all but two of the applications were for projects in Maricopa or Pima counties. One was for a project serving Yuma County, while the other is the long-awaited second phase of an affordable housing complex in Sierra Vista being developed by Walling Affordable Communities, LP.
Glenn and Mary Walling specialize in the development of affordable housing apartment projects across Arizona and have been involved in bring more than 1,500 residential units to the market utilizing tax credits. One of the projects was Casa Del Sol in Sierra Vista, where Mary Walling grew up.
Casa Del Sol – Phase One of the project brough 88 badly needed low income adult housing to the area, which is home to the U.S. Army’s Fort Huachuca. Planning for Phase Two began in 2019 with the use of Federal Low Income Housing Tax Credits as part of the funding mechanism.
But COVID-19 in 2020 and then uncontrolled price increases and labor challenges throughout 2021 put pressure on the company’s plans. Walling turned to the Arizona Department of Housing, which began offering a competitive State Low Income Housing Tax Credit program in further support of bringing as many affordable housing units to market as possible.
ADOH also made available the $24.5 million pool to help provide several projects with some gap financing to address the unrelenting surge in costs. In late February, the Wallings were told by ADOH that underwriting for the Casa Del Sol project could still take another 60 days.
But on March 31, ADOH told AZ Free News that underwriting was completed and the developer has received their award.
“We at the Arizona Department of Housing are proud to help fund this exciting project to bring much-needed affordable housing to Cochise County,” Sheree Bouchee – ADOH Rental Programs Administrator. “We are thrilled to collaborate in creating housing solutions for rural Arizona communities.”
It was welcome news for city officials in Sierra Vista, where there are currently only 503 affordable housing units despite the fact more than one-third of Cochise County’s 125,000 residents live in the area. The presence of Fort Huachuca and the city’s proximity a U.S. Border Patrol station near Bisbee has led local rents outpacing the ability of many non-government employees to afford local housing.
According to Sierra Vista spokesman Adam Curtis, the city staff worked with the Wallings to waive some fees and approve modifications to code requirements to help facilitate and incentivize the project. Those actions were consistent with strategies identified in the City’s voter-approved Vistas 2030 General Plan.
And with the site plan approved and a building permit already issued, city officials are looking forward the announcement of a ground-breaking ceremony.
“The second phase of Casa Del Sol will be a welcomed and much needed addition to our West End,” Community Development Director Matt McLachlan said. “The Wallings have a tremendous track record of building high quality affordable housing in our community and have been a great partner in advancing the City’s affordable housing goals.”
Tucson-based Tofel Dent Construction will serve as general contractor for Phase Two, which encompasses more than five dozen new units and a swimming pool to complement the existing recreation center. The hope now is for construction to begin in late summer with occupancy set for the end of 2023.
In the meantime, the Wallings are already moving forward with plans for Phase Three which could be ready for occupancy by the end of 2024.
News of ADOH’s assistance for the Casa Del Sol project is just one of the recent efforts across the state to address Arizona’s lack of affordable housing.
Last week the Maricopa County Board of Supervisors approved applying $17 million of American Rescue Plan Act (ARPA) funds toward adding more than 600 new units to the Valley’s affordable housing stock. Arizona Housing, Inc. will received $8 million of those funds to convert an existing hotel in central Phoenix into 50 permanent, supportive housing units.
In addition to the living spaces, the property will include on-site case management services to provide residents with employment assistance and social services options. Maricopa County says construction could begin yet this year with estimated completion in Summer 2023.
The remaining $9 million will support the construction of affordable rental projects in the West Valley and in central Phoenix. The Centerline on Glendale will go up at the southeast corner of 67th and Glendale Avenues. The 368-unit project by The Gorman Group will take place in two phases, starting with 186 units.
“It’s going to take awhile to get our inventory where it needs to be, but the addition of nearly 400 new rentals in the heart of Glendale is an example of how we can address our affordable housing shortage one investment and one partnership at a time,” said Maricopa County Supervisor Clint Hickman.
In downtown Phoenix, Ulysses Development is slated to construct a 192-unit affordable rental complex called Salt River Flats. It will be built near Broadway and 14th Street, with an expected opening in Spring 2024. All of the unit figures are estimates.
How to interpret changes enacted in 2011 to Arizona’s development impact fee law will be heard by the Arizona Supreme Court, it was announced last week.
At issue is Arizona Revised Statute 9-463.05 which was amended in 2011 to redefine the circumstances under which a municipality can lawfully assess development impact fees. The Legislature noted its intent that courts would “narrowly” construe a town or city’s privilege to assess development fees.
Specifically, the 2011 version of ARS 9-463.05 prohibits impact development fees on new residents to pay for “a burden all taxpayers of a municipality should bear equally.”
In 2018, the Southern Arizona Home Builders Association (SAHBA) sued the Town of Marana after town officials spent more than $16 million in 2013 to acquire a water reclamation facility formally operated by Pima County. At the time, the facility only had capacity to serve current residents.
Marana then spent more than $17.5 million as part of a multi-phase Capital Improvement Project (CIP) to expand, upgrade, and modernize the facility, including compliance with environmental regulations. 20-year bonds were issued to cover the costs, with bond payments coming from impact fees charged on new homes and other development projects.
SAHBA’s lawsuit contends the expansion of the water reclamation facility and other upgrades undertaken as part of the project benefitted all existing residents as well as new residents. As a result, much of the impact fees violated ARS 9-463.05, the lawsuit argued.
The town, however, contended there was already sufficient water resources and wastewater treatment capacity to serve existing residents. It only acquired the Water Reclamation Facility and expanded the facility in order “to meet the needs” of future development, town attorney’s argued.
Marana also argued the project was developed “over years of careful consideration” by engineers, consultants, the public, and the Town Council. SAHBA was among the stakeholders involved in a planning process which started years earlier but took no action until 2018, according to town attorneys.
A Pima County judge and later the Arizona Court of Appeals sided with Marana’s position. Attorneys for the town later argued that review by the Arizona Supreme Court is “unwarranted” because the two lower court ruling were rightly decided.
“The trial court and the court of appeals evaluated whether the Town’s impact fee ordinances met the statutory requirements under A.R.S. § 9-463.05,” Marana’s response stated. “Both courts held the statutory requirements were met.”
But on April 5, the Arizona Supreme Court announced it will take up the case later this year, representing the first time the amended law will be subjected to review by the justices. The questions to be addressed during oral arguments are:
Did Marana violate A.R.S § 9-463.05 by making future development bear 100 percent of the cost of acquiring the Facility?
Did Marana violate the same statute by making future development bear nearly all of the cost of upgrading, modernizing, and improving the Facility?
Did Marana further violate the statute by failing to take into account what could or could not be included in development fees under that statute, and by failing to make any proportionate allocation of costs between existing and future development?
The Home Builders Association of Central Arizona, which is a trade association representing nearly 500 member companies engaged in residential construction and development, filed an amicus curiae (friend of the court) brief in support of SAHBA’s case.
A controversial bill to offer up to $150 million in tax credits to filmmakers, SB1708, passed the House Appropriations Committee on a divided vote: 8-5.
The bill reads like a promotional deal for a store: if a company spends up to $10 million, then they get 15 percent in tax credits. If they spend between $10 and $35 million, then they get $17.5 percent. And if they spend over $35 million, then they get 20 percent. Companies could get more: an additional 2.5 percent for total production labor costs associated with Arizonan employees, an additional 2.5 percent of total qualified production costs associated with filming at a qualified production facility in Arizona or primarily on location, and an additional 2.5 percent of total qualified production costs if they filmed in association with a long-term tenant of a qualified production facility.
Arizona Free Enterprise Club Vice President Aimee Yentes told the committee that the $150 million refundable tax credit was not only unwise but likely unconstitutional, directing the committee members to review the Goldwater Institute’s analysis of the bill’s potential gift clause violations. She added that this type of legislation only causes a bidding war between states that ultimately cause its residents to lose out, citing similar legislation adopted in other states and their current struggles. As for the argument that the tax credit would result in more jobs for locals, Yentes asserted that theory fails to prove itself in practice.
“It’s a loser that produces few, shallow, low-payment, temporary jobs,” said Yentes.
Michael Scott, CEO of self-described “faith-based” film company Pure Flix responsible for movies like “Case for Christ” and the “God’s Not Dead” series, said that they spend tens of millions outside of Arizona. Scott promised they would employ many locals if they could bring filmmaking to Arizona.
Rob Gerstner, a longtime cameraman, said that this bill wouldn’t stop film companies from “sub-renting” equipment: local companies lack all the equipment necessary to film a movie, meaning that they would then need to rely on renting equipment from other states to fulfill the film company’s contract. Gerstner said that money would bleed out of Arizona because of logistical problems like that.
State Representative Jake Hoffman (R-Queen Creek) noted that pornography movies don’t qualify for the credit, but asked why works like the controversial Netflix film “Cuties” wouldn’t be scrutinized — something that would oppose certain Arizonan’s values. The bill sponsor, State Senator David Gowan (R-Sierra Vista), said that the bill would inspire the “mass good” and that the bad and good works could compete.
“I don’t know how you control all that aspect, but it certainly allows them to be here and allow them to counter that with our religious movies,” said Gowan. “You can’t control everything that’s out there, but you can certainly control the most evil.”
Hoffman said that political candidates and their campaigns could reap the tax credit reward. Gowan said that those kinds of works would fall under campaign laws, which would. Hoffman said that attorneys informed him of the opposite legal take and advised Gowan to look into that.
State Representative Gail Griffin (R-Hereford) explained that she’s never voted for a refundable tax credit. Hoffman said that he wasn’t confident political campaigns wouldn’t benefit from the bill, and cited concerns that the bill would cause a slippery slope “race to the bottom” for tax credits. State Representative Joanne Osborne (R-Goodyear) cited similar concerns.
“At the end of the day I’m just a small mom and pop business owner; I don’t get a $150 million tax credit,” said Osborne. “This bill does set a precedent, and it’s not one I’m going to support.”
State Representative Lorenzo Sierra (D-Avondale) expressed excitement at the thought of all the film-related programs that may arise from this bill.
Butler argued that this bill was “really scary” from the sheer amount of money being committed from the state legislature, at the potential expense of other investments. She said she wasn’t convinced that the returns would outweigh the funds given, citing that there needed to be more checks and balances like a sunset clause to keep the legislation in check. Yet, Butler voted for the bill.
Chairman Regina Cobb (R-Kingman) said that she felt there were significant advantages and disadvantages presented by the bill, agreeing with Butler that there should be a sunset clause, and voted for the bill.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
Arizona State Treasurer Kimberly Yee wants to ensure all State vendors understand their obligations in light of economic sanctions put on the Russian Federation by the U.S. and E.U. following Russia’s military invasion of Ukraine.
On Tuesday, Yee issued a Notice of Compliance about her expectation that State contractors, vendors, and other third-parties pay attention to the situation involving Russia and have all “necessary consents, approvals, and authorizations of all governmental authorities in connection with any transaction” dealing with the State.
“As you are aware, the State of Arizona and the Arizona State Treasurer’s Office (ASTO) are subject to U.S. laws, regulations, and orders applicable to its business activities and financial transactions, including those related to the international trade controls and economic sanctions,” Yee wrote. “As a vendor of the State of Arizona, you have separate and independent obligations under these same laws.”
Yee added that the State of Arizona has no investments in Russia, and while economic sanctions are subject to change, she expects all contractors and third parties “acting as intermediaries for the State of Arizona” to be knowledgeable about and remain in compliance with export and import laws, regulations, sanctions, embargoes, and policies.
That includes, but is not limited to, securing all clearances, export and import licenses, or exemptions therefrom, and making all required filings with appropriate governmental bodies, she noted.
“If you or your agents are unable to comply with the above foreign transaction requirements – including compliance with the United States trade sanctions related to Russia– in regard to your independent relationship with State of Arizona, you are required to notify the Arizona State Treasurer’s Office in writing immediately,” Yee wrote.
Yee also used the notice to suggest State contractors and vendors not be associated with financing any oil or other energy trades with Russia.
“Instead, we respectfully request you consider financing and investing in energy production in the United States, so we can be energy independent,” she wrote. “This is not only beneficial from a foreign policy perspective, but it is also a safer domestic investment.”
Yee’s suggestion, she noted, goes against the wishes of the Biden Administration but she pointed out there is no law against financing U.S. energy production.
“Doing so is a sound investment that does not carry the risk of foreign investment in that sector,” Yee wrote.
A municipality’s mayor or the chairperson of a county’s board of supervisors would not have the authority to order any business closed during a declared local emergency, if a bill introduced by House Majority Leader Leo Biasiucci is signed into law.
“Government should never have their hand in telling who can stay open, and picking winners and losers,” Biasiucci (R-LD5) recently said in support of House Bill 2107, which passed the House on Feb. 17 and was transmitted the next day to the Senate.
On Wednesday, HB2107 cleared the Senate Commerce Committee and now awaits further action in the Senate.
Under current state law, a mayor or county board chairperson has authority to declare proclamations in response to a local emergency, such as from fire, flood, earthquake, explosion, war, bombing, acts of the enemy or other natural or man-made disaster or by reason of riots, routs, affrays or other acts of civil disobedience that endanger life or property.
Once a local emergency is declared, the mayor or chairperson may then impose “all necessary regulations” to preserve the peace and local order through curfews; closing of streets, public places, and build facilities; and utilization of law enforcement agencies. The forced closure of businesses is also currently allowed under state law.
HB2107, however, would amend state law to repeal the authority of local government officials from ordering business closures. The bill is opposed by some cities and towns as well as the County Supervisors Association of Arizona, but many business groups and associations are calling for its passage due to the financial impacts of having to comply with local emergency declarations.
Among the issues is the fact many communities saw small businesses and locally owned businesses forced shut while national corporate businesses like Walmart and Home Depot were allowed to stay open.
State lawmakers continue to propose ways to rectify Arizona’s severe healthcare workforce shortage, including a bipartisan vote on House Bill 2691 to increase collaboration among the state’s education and healthcare communities.
Under HB2691, five new healthcare related programs would be established to promote various training efforts in an effort to address an ongoing shortage for nurses and other medical professionals. The programs are:
The Arizona Nurse Education Investment Program which would increase the capacity of nursing education programs in Arizona to increase the number of all levels of nurses graduating from the state’s nursing education programs. This is intended to address Arizona’s yearslong nursing shortage.
An Arizona Department of Health Services grant program to expand the capacity of preceptor training for nurse students and new nurse graduates. This would ensure an increase in instructors available to handle expanded nursing programs.
The Nurse Transition to Practice Program to better support and develop new nurses, provide evidence-based professional development, and more rapidly accelerate the novice nurse to a competent nurse.
A grant program to encourage and support more preceptorships in Arizona for the training and development of graduate students wishing to become physicians, advanced practice registered nurses, dentists, and physician assistants.
A pilot program to develop and expand capacity of behavioral health programs at community colleges. This would include coverage of tuition, fees, and related educational expenses for eligible students.
HB2691 also seeks to make it less difficult for military members who wish to receive credit in a healthcare education program for experience and skills developed during their service.
The bill passed its Third Reading in the House on Thursday with a 56 to 3 vote and has been transmitted to the Arizona Senate for consideration.
