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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Arizona’s Democrat Governor Katie Hobbs promised a “major announcement,” leading up to a Monday press conference at the Port of Nogales on the state’s southern border with Mexico. And indeed, the border press event did highlight “Task Force SAFE,” a joint military-U.S. Customs and Border Protection operation deploying Arizona National Guardsmen to aid in intercepting drug smuggling. However, Hobbs also told reporters that Phoenix would not tolerate what she called Trump’s “misguided policies,” namely his promise of mass deportations of illegal immigrants.
As reported by 12News, Hobbs told reporters, “I will work with the administration when it benefits Arizonans and if I need to stand up to them because their actions will harm Arizonans, I will do that.”
She continued targeting Trump’s deportation vow, specifically saying, “We don’t know what a mass deportation plan will look like, what resources will be involved. I’m here to protect Arizonans, and I will do that.”
When asked if she would allow state law enforcement to participate in any mass-deportation action, Hobbs told ABC News, “We will not be participating in misguided efforts that harm our communities. And I’ve been incredibly clear about that.”
JUST IN: Arizona Governor Katie Hobbs bumbles through interview, says she will not let the Trump administration deport illegal aliens in Arizona.
Hobbs added, “Those efforts are going to divert needed resources that we need here on these drug interdiction, and smuggling and trafficking efforts to keep harm out of our communities. We need those resources here. And coming here today and seeing this operation firsthand just underscores that. That working in partnership here is how we can best secure the border.”
When asked what worries her about mass deportation, Hobbs told ABC, “I think the diversion of law enforcement from the work that they do everyday to keep our communities safe, people hiding in fear, we saw that under previous state policies here and it harms communities. It tears families apart. And that’s not going to happen on my watch.”
Despite reports that Hobbs is seeking to clothe herself in the garb of a moderate, noting her refusal to join the “Governors Safeguarding Democracy” (GSD) with fellow Democrat governors J.B. Pritzker (Illinois) and Jared Polis (Colorado), Hobbs recently described the legislature she has to work with as “run by literal insurrectionists and indicted fake electors,” who send her “garbage,” prompting a record shattering 216 vetoes.
According to AZCentral, Hobbs replied to calls to join the GSD saying, “I don’t think that’s the most productive way to govern Arizona. As governor, I have and will continue to stand up against actions that hurt our communities. But I will work with anyone who is doing what is right for Arizona.” Some have taken that as an indication of her willingness to work with the incoming Trump administration and the now-overwhelmingly Republican-controlled Congress.
Hobbs’ commentary from Nogales would seem to put Arizona Democrats’ concerns of the governor potentially moderating her stance against the core policies of the GOP to rest. But should 2024 electoral trends carry through to 2026, it could foreclose on the possibility of her re-election.
Congressman-elect Abe Hamadeh (R-AZ-8) released a new video via X in which he memorialized his victory against Democrat Greg Whitten in the November General Election.
In the video posted to X, Hamedeh told his supporters, “I’m ready to go to Washington, D.C. to fight. Fight with everything I’ve got for every single one of you here and everybody in this district and all across Arizona. Because despite the many problems we face, I still believe in America, because I believe in all of you. We took on so many powerful people in this race. And it showed us that the American people are stronger than the money that they have. And that’s what this victory is about. It’s a victory about all of you. It’s a victory for ‘We the people.’”
Hamadeh added, “I love you Arizona. I love my country, and I love you. And that’s why I’m with you now and forever. Thank you, Arizona. God bless you. God bless the United States. And let’s keep winning.”
As reported by the Arizona Daily Independent, Hamadeh pledged to “deliver real results, protect our freedoms, and restore America’s greatness.” He added, “This is a victory for every Arizonan who’s fed up with open borders, skyrocketing prices, and a political class that has sold our country out to the highest bidder. Arizona deserves a fighter who will go to Washington, drain the swamp, and actually put America First—and that’s exactly what I’m here to do.”
He remarked that his campaign “was a true grassroots movement fueled by Americans who believe our best days are still ahead.”
“After four years of Joe Biden in the White House and radicals trying to tear this country apart, we need strong, fearless leaders who will fight for the America we know and love. I am honored to be that fighter for Arizona’s 8th District,” Hamadeh said. “This isn’t just about policy; it’s about the courage to fight for the values that have made America the greatest country in the world.”
He told the outlet that his first priorities when he takes office are to deliver on his promises to “secure the border, bring down inflation, protect seniors and stand strong for America’s military and law enforcement.”
In a statement to AZ Free News Hamadeh said, “From day one of my campaign, I made a promise to Arizonans: to bring bold, courageous leadership to the table. As I set out to represent Arizona’s 8th District in Washington, my mission is clear—I will never stop fighting for my constituents, for future generations, and for the revitalization of the United States of America. Together, we will restore the strength and spirit of this great nation.”
In the Sunday post to X, Hamadeh wrote, “Arizona… I am with you, now and forever. Let’s roll.”
In the most up-to-date results from Arizona.vote, Hamadeh handily defeated Whitten by a thirteen-point margin or approximately 47,925 votes. That’s around the combined populations of Sun City West and New River, two of his smaller constituent cities.
Another Arizona governing body has intervened in a critical issue in place of the state’s attorney general.
Last week, the Arizona Corporation Commission (ACC) intervened in a matter at the Federal Energy Regulatory Commission (FERC), protesting BlackRock, Inc.’s Request for Reauthorization and Extension of Blanket Authorizations to own utilities. The Environmental Social Governance (ESG) – related filing was led by a coalition of state attorneys general from around the nation and the ACC.
The coalition requested that FERC decline to approve BlackRock’s application unless the following four conditions are met:
“The Commission must require that Applicants, including all affiliates and subsidiaries, limit their collective ownership to 20% or less of the shares of each FPA-covered utility.
“Applicants must function only as passive investors.
“Applicants must hold the shares subject to their fiduciary duties to their investors, including the duty to act in the sole financial interest of the investors.
“The Commission should require specific reports by Applicants of every instance when the asset managers voted contrary to the recommendation of utility management on a shareholder proposal or board of director nomination, as well as an explanation of how such votes were consistent with the asset manager’s commitments to FERC.”
Freshman Commissioner Kevin Thompson, who pushed hard for the commission to join the legal protest, told AZ Free News, “We need utilities to make decisions based on what makes the most sense for ratepayers and the integrity of our grid, not the policy goals of ESG-minded asset management cartels. This Commission is taking a more proactive role in federal matters that impact Arizona ratepayers and our grid because FERC and other federal agencies have rapidly been exerting their influence in matters that should be left up to state regulators and our utilities.”
Joining the Arizona Corporation Commission on the filing were the States of Utah, Arkansas, Florida, Idaho, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Virginia, and Wyoming.
The Corporation Commission’s involvement with this coalition mirrors the Arizona Legislature’s repeated efforts the past two years to join with other state officers in attempts to defend laws and protect the interests of their constituents. Both the Commission and the Legislature have been forced into acting as the state’s defacto attorney general due to Arizona’s top prosecutor, a Democrat, being unwilling to stand against certain infractions or questions of legality for state and federal laws.
The intervention into the ESG-related matter marks another instance of leadership by Arizona Republicans on this issue. The ESG movement has sought to advance an environmental agenda to bring an end to traditional and reliable energy investments across the country and world, and many have challenged the legality of such efforts in various industries. Before the current Democrat administration, the state had a Republican Attorney General Mark Brnovich, who led a handful of early ESG skirmishes. Arizona Treasurer Kimberly Yee has also joined other state financial officers over the years to oppose pro-ESG actions.
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
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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