Brenna Goth

The Republic | azcentral.com

Phoenix leaders are asking a judge to rule that a district intended to fund the downtown Roosevelt Row arts corridor is unaffected by a new law changing how the districts are formed, which would allow for initiatives like marketing and beautification of the area to progress.

A complaint filed in Maricopa County Superior Court last week against the state of Arizona argues that House Bill 2440 — which caused a firestorm among area property owners earlier this year — should not apply to the Roosevelt business-improvement district. The districts allow landowners to tax themselves to pay for common services, such as extra cleaning and safety initiatives.

Phoenix approved parts of a district bounded by Fillmore and Moreland streets and Seventh Street and Seventh Avenue based on a proposal by some business and gallery owners. But after the controversial vote by the Phoenix City Council, opponents of the tax worked with state Rep. Warren Petersen, R-Gilbert, to introduce legislation at the Capitol to change how the districts are formed.

The rules are retroactive to Jan. 1, before the city held a public hearing to approve the district.

Phoenix's complaint, though, argues the law opens a "real and justiciable controversy" over whether the Roosevelt district should be affected. An earlier vote by the city means Phoenix approved a boundary map before the retroactive date, the complaint states.

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But if the court finds the district is subject to the retroactivity, the complaint states, then HB 2440 is "unconstitutional and unenforceable" as special legislation because no other district underway would be affected. Applying retroactivity only to the Roosevelt district doesn't serve a "legitimate legislative purpose," the complaint states.

Gov. Doug Ducey's office did not immediately respond to a request for comment.

Phoenix spokeswoman Julie Watters said in a statement that the lawsuit is a response to the many years Roosevelt Row business owners and residents have worked to implement a district.

"Unfortunately, the Legislature passed a law after the fact that the city of Phoenix believes targets the Roosevelt Business Improvement District unconstitutionally," she said.

Phoenix intends to move forward with the district and is looking for clarification on the law, according to the complaint. An Arizona Republic analysis of property data shows challenges to the Roosevelt district moving forward under the new system, as power shifts between supporters and opponents.

The city also seeks attorneys' fees and "further relief" to be determined by the court.

Phoenix Councilman Jim Waring, who said he supported HB 2440 with the understanding it would affect the Roosevelt district, said he disagreed with the decision to go to court.

A Roosevelt Row plan error that resulted in the suspension of three city executives and other confusion made the district's approval process a "black mark" for the city, Waring said.

Waring said he understood why citizens were frustrated, went to the Legislature, and won, he said.

"Now the city is trying to overturn that," he said.

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