Local developments

Recent development plans for Fourth Avenue have groups searching for local options. 

Danyelle Khmara

The Save 4th Avenue group has been making progress on advocating for beneficial “smart growth” options to support locally owned independent businesses in response to the planned Union on 6th project, a seven-story apartment building with ground floor retail space under contract with Education Realty Trust Inc. (EdR), a student-housing development company based in Memphis. The area that EdR has under contract stretches west from the corner of Fourth Avenue and Sixth Street to Fifth Avenue and has caused significant concern from the local businesses in the area about the potential negative impact on the avenue, the hub of localism in Tucson with 74 historic properties. A recent community forum planned by the Save 4th Avenue group attracted a large audience to discuss the best options ahead that can protect locally owned independent businesses as Fourth Avenue begins to change.   

Many significant barriers exist to protecting locally owned independent businesses in Arizona, especially Prop 207. Under this voter-approved proposition passed in 2006, the city is required to pay affected property owners for a diminished value of their property if new land-use regulations are adopted that impose additional restrictions on the use of private property. The effect of this proposition has been to stall the adoption of new, more restrictive land use regulations by Arizona cities. Other barriers include the Arizona court decisions relating to “local preference” legislation such as the Big D Construction Corp v. Court of Appeals case in 1990, when the court struck down legislation that provided a local preference on the grounds that any preference violated the Arizona Constitution’s equal protection clause and was an improper special law granting privileges to certain corporations. In addition, the “Gift Clause” in the Arizona Constitution (Article IX, Section 7) prevents cities and towns from making public expenditures without the receipt of adequate consideration. 

However, there are a number of significant opportunities that can be pursued under Arizona law, in particular the Community Benefits Agreement (CBA) concept. CBAs are agreements negotiated between the developer and affected community group that specify certain conditions and agreements relating to the design and use of a particular project as well as defining a set of transparent community benefits that the developer has committed to provide as part of a development project. An example of a provision that can be included in a CBA that relates to the current Union on 6th development is a requirement that the developer reserve a certain amount of space for locally owned, independent businesses. The City of Tucson could have a CBA be one of the conditions for a developer to receive any economic incentives and ensure that this Union on 6th project meets the needs of the community. 

Many examples of successful CBAs exist in cities across the U.S. giving community groups a voice in developing projects, enabling them to achieve project benefits that match local needs, and providing the legal authority to enforce developers’ promises. Since a CBA is a contract, community coalitions also need an attorney and should work with other stakeholders who can offer additional types of assistance. The developer then goes to the city for approval with the full support of the coalition and the signed CBA can be integrated into the development agreement signed by the developer and the city which makes the agreement enforceable both by local officials and by community groups and stakeholders. 

The various benefits of a CBA are wide-ranging and can be determined by the size and type of development and the needs and creativity of the community. They can include smaller storefronts for locally owned independent retail, pedestrian-oriented development, and funding for needs such as storefront improvement efforts that ensure support for locally-owned independent businesses.  The new developments on Fourth Avenue present an opportunity to create a long-standing precedent that can support both the developers and the locally owned independent businesses and lead to a better mix of economic development benefits.  

The CBA process is the best short-term option to support locally owned independent businesses with new developments and can move quickly with enough support. With the leadership of the City of Tucson and Fourth Avenue Merchants Association supporting the continued advocacy by the businesses involved in Save 4th Avenue and Local First Arizona, the CBA precedent is one that can be accomplished. 

This is a regular series of columns from Local First Arizona on local sustainable economy issues. Get involved as a member or volunteer of LFA by signing up at www.localfirstaz.com.