| NEWS | Oops, They Did It Again! Phoenix sued again over property tax ‘shell game.’ BY ELIAS WEISS T he Goldwater Institute, a libertarian public policy think tank based in Phoenix, sued the city of Phoenix last week on behalf of two Arizona taxpayers for the second time in Maricopa County Superior Court. Plaintiffs think the city is playing favor- ites, and they’re not happy about it. Especially because they went through the same ordeal just two years ago. Goldwater Institute attorneys allege the city sidestepped state law when it got in bed with the Chicago-based Hubbard Street Group, a real estate developer, gifting it a hefty handout of taxpayer dollars in the form of a $7.9 million tax break to spur local development. “I am baffled by this,” Jon Riches, Goldwater Institute’s director of national litigation, told Phoenix New Times. “This is an extraordinary demonstration of hubris and lawlessness.” The Chicago developer is eyeing its Phoenix debut with Skye on 6th, a 26-story high-rise at Sixth and Garfield streets downtown. It’s an $87 million project that is expected to feature more than 300 apart- ment units and 7,000 square feet of commercial space. Skye on 6th is Hubbard Street Group’s second Arizona project. The firm developed the Sunscape Villas in Scottsdale in 2010. But the new lawsuit could hinder Hubbard Street Group’s plans to finish the mixed-use tower near Roosevelt Row, which is already about half-built. The project broke ground in July last year and is slated to begin admitting tenants next summer. Plaintiffs want the city’s decision to offer Hubbard Street Group a special tax break to be ruled unconstitutional. They also want to bar the city from ever providing special tax advantages to the developer again, and to award costs, attorney fees, and additional relief, according to court records. Hubbard Street Group executives did not respond to interview requests from New Times. The new lawsuit is an echo of another case the Goldwater Institute filed and won against the city. In that case, a Maricopa County 8 Superior Court judge ruled in 2020 that Phoenix officials violated the Arizona Elias Weiss Constitution when they gave millions of dollars in tax breaks to Denver-based Amstar, another private developer, to construct a 22-story residential high-rise downtown. The same legal team is representing the same two plaintiffs, challenging the same defendant over the same issue less than two years later. Now, Goldwater attorneys are looking for consecutive victories in court. Taxpayer advocates call the special subsidy a “property tax shell game” and the “latest crony tax scheme,” again decrying the action as unconstitutional. An emergent lawsuit could hinder Hubbard Street Group’s plans to finish building this mixed-use tower near Roosevelt Row, which is already about halfway constructed. The city’s defense against these asser- tions will later be filed in court. “We are unable to comment on pending litigation,” city spokesperson Dan Wilson said. What is known is that the city believes it will eventually see returns on the project exceed $8 million, justifying the preemp- tive tax break. That special tax break could stick existing business and property owners with a higher tax bill. Just ask the plain- tiffs: Mat Englehorn, the co-owner of Angels Trumpet Ale House on nearby Second Street, and Bramley Paulin, a prop- erty owner in downtown Phoenix. “Paying taxes on my own business is enough of a burden,” Englehorn said. “I shouldn’t be required to pay additional taxes so the city can pick its preferred winners and losers.” In 2018, Englehorn opened a second beer garden in the Arcadia neighborhood. It closed less than two years later, and sources close to the owners say business at the flagship restaurant has lagged. “The pandemic was not easy on the downtown area,” said Riches, Englehorn’s attorney. “If you’re a downtown redevelop- ment-area business like Angels Trumpet Ale House, your property taxes will neces- sarily go up. The price of doing business is now even higher.” Gimme a (Tax) Break Englehorn worries that the Hubbard Project, as it has been dubbed, will make matters worse. It’s rooted in a 1996 decision by the Arizona Legislature to roll out a commer- cial development program called Government Property Lease Excise Tax (GPLET). The city uses GPLETs to temporarily ease developer tax burdens, incentivizing developments that meet its long-term vision for downtown. When the city authorizes a >>p 10 Token Effort GOP Chairwoman Kelli Ward is selling NFTs now. BY KATYA SCHWENK B eginning Monday, if you feel the urge to purchase “America First” election- fraud-themed non-fungible tokens, you’re in luck. Arizona Republican Party chairwoman and relentless election denier Kelli Ward announced on May 9 that she’s jumping into the NFT game. Her personalized NFT collec- tion went on sale on Monday. NFTs are unique digital tokens hosted on blockchain technology, available to trade and purchase. Over the last year, the market for NFTs has exploded — though it remains highly volatile, full of speculation, Ponzi schemes, and questionable actors. And Ward is entering at a particularly sketchy moment for the industry. Last week, the Wall Street Journal pronounced: “NFT Kelli Ward Twitter sales are flatlining.” Some tokens once valued at $400,000 are now worth half that. The upheaval, it appears, did not put a pin in Ward’s plans. On Monday, she tweeted a graphic announcing the venture. It reads “liberty” and “America First” and features the Statue of Liberty with its face replaced with, yes, Ward’s own. In place of the statue’s iconic torch, Ward thrusts a ballot up in the air. The ballot has two options: Donald Trump and “Let’s Go Brandon.” In her arm, the statue carries a copy of Ward’s book, Justified, which tells the “story of America’s audit,” and which she dedicated to the former president. The website for Ward’s NFT venture has much the same imagery, although in this case, Ward’s mouth on the statue is taped shut. “Own a piece of American history,” it says, without elaboration. Many details about Ward’s NFT venture are still unclear: What’s the “mint price” of the tokens, or their initial price? How many will Ward be selling? What exact purpose do they serve? Ward did not reply to questions or an interview request from Phoenix New Times. Ward, a physician in Lake Havasu City, has long been a prominent figure in Arizona poli- tics. She has run, unsuccessfully, for U.S. Senate twice, and served for two years as a state senator. But it was her position as Republican Party chairwoman through the Arizona Senate’s “audit” that gave her a national platform. Enough of a platform to make money off NFTs? We’ll see. MAY 19TH– MAY 25TH, 2022 PHOENIX NEW TIMES | MUSIC | CAFE | FILM | CULTURE | NIGHT+DAY | FEATURE | NEWS | OPINION | FEEDBACK | CONTENTS | phoenixnewtimes.com
