The Northwest Fire District Governing Board last week delayed indefinitely a decision on whether to provide a reduced level of emergency services at a reduced cost for the Ritz-Carlton resort and golf club.
The board also begged off considering a pre-annexation agreement for the development’s planned million-dollar homes.
Citing a recent lawsuit — Turken v. Gordon — that seeks to overturn a $97-million tax-sharing deal between a retail developer and the city of Phoenix, the fire district’s attorney suggested the delay.
“The law in this field is rapidly changing,” attorney Thomas Benavidez told the fire board on Jan. 27. “It’s more prudent to wait a while and see how the legal environment changes.”
The Phoenix lawsuit centers on whether the tax-sharing deal violates the “gift clause” in Arizona’s constitution. The clause prohibits governments from giving preferential treatment to any individual or entity, such as subsidies or tax breaks.
The Arizona Court of Appeals in November said the Phoenix deal violated the state’s constitution.
The state’s high court this year may take up the case. If not, then the lower court ruling will stand. That could affect a variety of arrangements between governments and developers.
Under the plan proposed by Cottonwood Properties, the Dove Mountain resort’s developer, the golf club and hotel would not be annexed into the fire district. The resort would provide for its own non-emergency services.
For emergency fire and medical services, plan reviews and building inspections, the resort’s developers would pay the fire district $36,000 the first year and $30,000 a year thereafter for the golf club, and $124,000 the first year and $120,000 a year thereafter for the hotel.
Under the Cottonwood Properties proposal, on a percentage basis the resort complexes would pay roughly the same rate annually for fire protection as a residential customer, who is taxed at a 10-percent residential assessment ratio.
The commercial assessment ratio stands at 23 percent, but it will decrease to 20 percent in 2011.
The resort is trying to spare itself additional expenses, Northwest Fire Chief Jeff Piechura has said. But, the nearby million-dollar homes would, over time, inject a healthy dose of cash annually to the district’s coffers.
The Ritz-Carlton will have the staff on-site to handle all non-emergency calls, Bill Hallinan, vice president of Cottonwood Properties, has said previously.
If the fire district board were to reject the Ritz plan, Piechura said, then the developers would need to contract for emergency services.
In the meantime, Northwest Fire will respond to emergencies at the resort property and golf course “if available,” the chief added. Other available agencies may respond as well. The resort would receive bills for any emergency services provided by the district, Piechura explained.
The Ritz-Carlton proposal drew fire from the Pima Association of Tax-Payers.
Mary Schuh, a member of the watchdog group, cautioned district officials on moving forward with the plan, which she called “fiscally disconcerting.”
“It creates a fire island on purpose,” Schuh told the board last week.
After meeting in closed session, the board agreed to hold off on a decision for now. It could take months for officials to know the outcome of the Phoenix litigation and whether they could proceed with the Ritz proposal as written.