Hello Lyn:

The recent discussion regarding funding the building of a Carefree cultural center to include ASU with the Butte Companies Easy Street project has created a healthy discussion with varying points of view.  

But, one point is clear.  The current situation in Carefree is not sustainable.  In large part, the town is financed by construction tax and sales tax revenue from new construction.  Every new construction brings a onetime deposit of revenue, but as the Town is built out, that revenue stream will diminish.  Sales tax revenue from our Town center merchants also help fund the Town.  But as restaurants continue to close and merchants leave, that revenue stream shrinks.  A third source of Town revenue is the State.  But we know that the State is facing a large budget deficit and we know, from experience, that when times are tough, the State legislature is quick to dramatically reduce funds that normally trickle down to cities and towns.   This is the situation.  What should be done?

The Ed Lewis Easy Street Project and the ASU cultural center present us with a window of opportunity.  Both will bring people and foot traffic to our Town center.  We know from the Baker Group consultants that people bring people.  These people will frequent our merchants and restaurants and sales tax revenues will increase.  Success will breed success.  More merchants and restaurants will come.  Today it is the norm that local government at some level participate in revitalization.  The key is to limit the duration of Town payment and make intelligent decisions weighing the risks.  This project passes muster on both counts.

Financial Risk:  Yes, there is financial risk.  A $4 million project, after allowing for about $1 million from Easy Street project phase 1 construction and condo closing taxes, will require about a $3 million investment by the Town.  By including Town Council chambers in the project, nearly $1 million of the cost could be a loan serviced annually by the $50,000 saved in lease payments for the current Town Council chambers.  The balance of $2 million would be drawn from our reserves.  But how to recoup that amount in a reasonable amount of time?  If the combination of Easy Street restaurant and retail sales tax revenue and sales tax revenue generated by the spending by Easy Street condo residents within the Town generate an additional $250,000 year, then our return will be achieved within 8 years.  Is this a reasonable expectation?  One major restaurant alone, with annual sales of $3 million, would generate an additional $90,000 in sales tax revenue.  Over the past 10 years, Town Center sales tax revenues have averaged $400,000 per year.  An additional $250,000 is a 63% increase.  The Meyers Research report shows that the sales tax revenues from Easy Street restaurants and merchants plus the sales tax revenue generated by the Easy Street condo residents additional Carefree spending will total $100,000 in 2017 and about $200,000 per year thereafter.  This does not include increases in revenues from visitors to the cultural center or increased spending by local residents within our Town center. 

Location Risk:  Building the ASU cultural center on the Butte Easy Street property will save costs relative to placing the building elsewhere in Town.  We can tap into the economies of scale of the Easy Street project.  The ~0.5 acres of Easy Street project land itself would be sold to the Town at the appraised value.  Assuming fair appraised values, the cost of this half acre property should be about the same as any other half acre along Easy Street.  And, if we consider land currently owned by the Town, that land has value.  And all things being equal, that half acre would have the same value as the half acre on the Butte property.  A cultural center located on the Butte Easy Street property will inspire Town center property owners, landlords and merchants to spruce up their appearance so as to lure visitors from the cultural center into their shops. 

ASU Commitment Risk:  ASU is willing to initially commit to a 5 year lease.  The long term viability of the project will be measured by the membership fees, event revenue and ongoing philanthropy.  These monies will support operating costs.  If successful, ASU will remain.  An indicator of the likely success of an ASU presence in Carefree will be the results of the initial fund raising campaign offered to be conducted by the Butte Companies and ASU where $2.5 million must be pledged between February and June 2015.  $2.5 million is the estimated operating costs over 5 years.  If the needed pledges are not made, the discussion is over.  On the other hand, we might find that support for this project measured in dollars pledged far exceed the target.  We will never know unless the fund raising effort goes forward.

As with everything, there is risk.  The upside of this opportunity is a rejuvenated downtown where residents and guests to our Town dine, shop and attend cultural events on a regular basis.  These improvements will enhance our upscale image and brand, improve our quality of life and property values, and strengthen the bottom line of the Town, such that the services we have come to expect continue without fear of budget cuts due to financial constraints and the imposition of a property tax.  This upside outweighs the likelihood of failure and outweighs the certainty of the continued downward spiral within our Town center and the budget squeeze that will certainly need to be addressed in the coming years. 

I believe the Town Council needs to endorse the concept of a Carefree cultural center in association with ASU and the Butte Companies.   This first step will initiate the Butte Companies and ASU fund raising effort which will, in turn, measure our citizen’s enthusiasm for this cultural center.  Carefree deserves the benefits of this project.

Respectfully,

John Crane

Carefree Town Councilman

 

 

Nice getting the People of Carefree looking at the reality of the facts presented by the Lewis group, and they don't like the deal, because the deal is really not practical.

 

Now we know that there is only a Phase 1 of 38 condos + retail, and that's the only commitment they have put on the table. Wow.

 

Kandace, thanks for the info, but shouldn't that Report be requested by the Town in behalf of the Council & interested parties so that they should be properly informed. This Report could have a major influence on the decision making process by the Council. That last paragraph is Meyers' Disclaimer. The Summary Report is irrelevant unless the full report is made directly accessible to the Public for review.

 

My Thoughts

Joe J DeVito

 

 

 

I love the idea of making Carefree a Cultural Destination. So I want to throw out an idea that I don't believe has been discussed, and may get all of this back on course in a way that is not offensive to anyone. Councilwoman Melissa Price stated in her letter that in speaking to the downtown Carefree landlords, "When approached about a Commercial Facility District they seemed to be on-board and realize we need to keep renovating and revitalizing the entire Town Center." She also passed around a petition several months ago, advocating the retail/condominiums and the ASU center in the downtown. That petition was signed by many of the business owners, who believed it would bring in the people needed to support their businesses. 

 

I was one of many who attended the ULI day long workshop, and this is exactly what the panel of experts put forth as the ideal situation. They suggested that the landlords and merchants form a downtown improvement district into which they would all pay to achieve the improvements they feel would increase their business.  We have repeatedly been told that the council should listen to the merchants, because they know what they need to succeed. I agree.  This would leave the decision making process as to what would or wouldn't work in the hands of the folks who have what the ULI called "skin in the game". It appears both the landlords and merchants very much want to see the Ed Lewis project, which would include the cultural center for ASU, built. 

 

A Commercial Facility District seems to be as good a solution as any I've heard thus far. Funding would be generated through the Commercial Facility District, rather than coming from the Town reserves, which seems to be a sticking point for many residents who would otherwise approve of the project, and the project could proceed without the present controversy over the funding. 

 

Should this prove a success, the Commercial Facility District could choose to expand on the idea of making Carefree a cultural destination by renovating some of the existing empty spaces for uses by other cultural amenities. Mr. DeVito's suggestion to scatter these amenities throughout the downtown, thus encouraging people to walk between them, passing shops and restaurants that they may find interesting, is brilliant. The mostly empty Los Portalas Mall would make an ideal center for larger events. Unlike ASU, the local theater, music, and arts non profits could partner with the District to  organize capital fund raising drives to renovate existing buildings or to build something new.  There are so many opportunities that wouldn't require large expenditures from the Town. 

 

Cities that invest in cultural centers tend to be large, with huge budgets. Carefree is not Scottsdale, Phoenix, or even Glendale.  Can we open a conversation about the ULI suggested Commercial Facility District, rather than this being a conversation that will die should the Town choose not to finance the proposed cultural center to the tune of $4,000,000 from Town reserves? 

 

Sue G.   

 

 

I have watched and listened to the workshops. Ed Lewis and his daughter have done their due diligence. Our Mayor and other Council persons are leaning too much, in my opinion, on the side of caution.  The Town residents have placed their faith in them. It is time to look around. Be realistic and see that this economy will be a long while in recovery. The “Easy Street Project” is a rare chance to start revitalization with the influence that Mr. Lewis and ASU have. The door is open for all sorts of revitalization opportunities but this project is a sound start.  The affiliation with ASU, it’s donors and people of influence that frequent places of culture will be a positive influence for our Town.

We must be optimistic about the economy over the next 5 years, as it is on the upswing. We will still need an anchor here to stimulate business to invest in the Town. As for the location of the facility, Mr. Lewis and his daughter have done the legwork and spent the money. We have the plans ready. Through experienced marketing individuals we have in the Town, we can maximize the location to its fullest. With ASU in place and its myriad of choices that would present themselves in the building, along with the festivals, Christmas parade and other functions that draw the folks to our Town, we will have made a very positive move in the right direction.

Along with any planned activities by ASU, we could also make the facility available to our citizens. Such programs as “silver sneakers” would be a regular draw from the surrounding communities as well. I see peripheral businesses springing up to support the new activities with the art center in place and our galleries in town now will be more viable. There needs to be stimulation for businesses to survive and our reputation of being a quality place to live needs to be upheld. Not a bunch of vacant buildings and businesses that leave in a year.

As time passes and the economy looks better,  DFT can enhance our cultural experience but at as a standalone it doesn’t add up. It will take Ed, ASU, DFT, SAL and others to make this fully work.

The rejection of this opportunity at this point in time will only serve to exacerbate the slow death of the Town core and surrounding areas.  Without increase in people traffic, I see having to pay for fire and EMT protection. I see having to pay property tax that will be in excess of $1000 per year. I see a deterioration of vacant buildings. I have worries about the gardens and the lack of use of the new Pavilion, due to low people traffic. I see no chance of a well-known restaurant or other facility wanting to build here for a lot of years. It is time to use that “rainy day” fund. It is time to make a low cost loan if needed. We have lasted longer than a lot of other small towns in the country. It is now time to step up and prevent another “coffin nail” from being driven into Carefree.

Respectfully,

Joseph Intenzo

Longtime Carefree Resident since 2003

 

 

I sure like the idea of a redevelopment district. To have the town working together with the merchants and the building owners with an incentive program is a very workable idea.

Merchants could work with the townspeople to shop Carefree. Do like the fine art and wine festivals do, give Carefree residents free admission. The merchants could have a resident discount. if you are a Carefree resident you get a 10% discount. 

Work with the landlords to work with the tenant businesses to keep them here, not chase them away with demands that can't be met.

If the town and the landlords work together and incentivise the merchants to rent their stores, good ones will stay and new ones will come, and if the merchants incentivise the townspeople they will shop here in Carefree.

I think the Ed Louis/ASU project are for another time and another town.

Joseph Corpora (Non-expert),

7402 E Carefree Drive