There is Kierland shopping center or Fashion Square Mall, but that is totally getting old. There’s Desert Ridge and Cine Capri, but those are also getting so passé. As a last resort there’s P.V. Mall, but that is getting pretty ghetto. Wait, what about that new place, CityNorth, by Desert Ridge? Oh my, that is perfect.
Except it’s not, really. Why? Because the sales tax that comes from CityNorth does not all go the city of Phoenix. For every two dollars Phoenix receives in sales tax from CityNorth, one dollar will go to a third party. That third party is the Thomas J. Klutznick Company, a privately held real-estate investment, development and consulting firm in Chicago.
Thomas J. Klutznick Company of Chicago was the developer for CityNorth. Phoenix officials must have been pretty anxious to make the whole project happen because they actually agreed to this when T.J.K. Company approached them with their proposal. They were so anxious that they committed $97.4 million dollars in sales tax revenue for building CityNorth. According to the ruling court documents of a lawsuit filed by the Goldwater Institute from the Maricopa Superior Court, “the payment period is for 11 years and 3 months or until the City has paid a maximum of $97.4 million. After that time period or payment of the maximum amount, whichever occurs first, all of the sales tax revenues from the project will remain with the City”.
The reasoning behind the city’s decision is that the taxes we would receive, even though only half, would be that much more than we would otherwise receive. The city also argues that CityNorth will promote a development of urban core, decrease pollution, reduce traffic, provide hundred, possibly thousands, of jobs, and secure free public parking. The city justifies agreeing to T.J.K. Company’s proposal because, according to court documents, “the City North project would not be built in the same time, place, or manner as contemplated by the Agreement”. So basically, the city council didn’t think there would be another opportunity for the project to happen. There is absolutely no connection whatsoever to the city agreeing and the fact that CityNorth’s development team has given campaign contributions to Mayor Phil Gordon and his Vice Mayor.
It is no secret that Arizona and the United States in general are having fiscal problems. But what does that really mean? As a fellow student so eloquently once put it, “the economy is in the s***ter”. Sales taxes for the city of Phoenix and Arizona are sinking. More than 50 percent of the city’s main budget comes from consumer purchases and not very many people seem to be consuming.
CityNorth isn’t even finished, yet its had its grand opening already. Nordstrom, Macy’s and Bloomingdale’s have committed to open, but they aren’t even open yet because they are a part of Phase II of CityNorth’s development, which just so happens to be on hold. Hmm, could that have anything to do with the whole economy being in the toilet?
-carolina
Information:
http://www.goldwaterinstitute.org/common/img/Turkenvgordonruling.pdf