{"id":176,"date":"2026-06-02T20:36:16","date_gmt":"2026-06-02T20:36:16","guid":{"rendered":"https:\/\/phoenixrelocationnews.com\/?p=176"},"modified":"2026-06-02T20:36:16","modified_gmt":"2026-06-02T20:36:16","slug":"goldwater-institute-sues-to-stop-roosevelt-row-affordable-housing-project","status":"publish","type":"post","link":"https:\/\/phoenixrelocationnews.com\/?p=176","title":{"rendered":"Goldwater Institute sues to stop Roosevelt Row affordable housing project"},"content":{"rendered":"
\n

A new affordable housing development is slated to go up right off of Roosevelt Row in Phoenix. But the Goldwater Institute, Arizona\u2019s libertarian-minded policy organization, is suing to prevent it from happening.<\/p>\n

Read more Phoenix high school grad gets too drunk at Senior Ditch Day party, sues<\/a><\/p>\n

Last week, the Goldwater Institute filed a complaint against the city of Phoenix in Maricopa County Superior Court. The suit alleges that Phoenix violated the gift clause in the Arizona Constitution by selling the property \u2014 currently an empty lot just north of Tropic Thunder at 1016 N. 2nd Street\u00a0 \u2014 to Pennrose LLC at a severe discount.<\/p>\n

Phoenix agreed to sell the lot for approximately $1.5 million, about one-third of the 2023 appraised fair market value of $4.8 million. Goldwater argues that the sale violates the state constitution\u2019s gift clause, which prohibits governments from giving away anything of value \u2014\u00a0land, credit, money and assets \u2014 to a private entity. It also argues that the sale violates a state law prohibiting housing from being built for a specific class of people, including income.<\/p>\n

In approving the project, the city relied on calculations that suggested that by selling the property and turning it into affordable housing, Phoenix would benefit in other ways to make up for the difference in price.<\/p>\n

The city acquired the 0.4-acre lot, which is now in a prime location on Roosevelt Row, in 2004. Pennrose, whose website says it has successfully completed more than 350 projects, responded to the city\u2019s request for proposals in 2023. It submitted a plan for a multi-use development that includes about 60 housing units, all of which would be affordable housing.<\/p>\n

As a way to increase the benefit to the city, the developer proposed having an early childhood education program run by the Bezos Academy \u2014 of Jeff Bezos fame \u2014 on the property. If the academy runs for 15 years and has 80 students each year, the city would receive the equivalent of $10.8 million in saved tuition and a free lease valued at $100,000 a year, the complaint says.\u00a0<\/p>\n

Goldwater \u2014 which is bringing the suit on behalf of a Phoenix landowner named Bramley Paulin, who seeks \u201cto prevent the unlawful depletion and transfer of City-owned public assets\u201d \u2014 argues all of this is an illegal giveaway.<\/p>\n

\u201cThe hope of the lawsuit is that the city will spend or will make this land available to a developer \u2014 be it the current one or someone else \u2014 who will pay the actual market price,\u201d Goldwater Institute senior attorney Anthony Napolitano told Phoenix New Times. \u201cThat the city will be blocked from giving something away so that it does not squander public resources, and that it will actually receive in compensation the amount it is due for such valuable land in the middle of downtown on Roosevelt Row.\u201d<\/p>\n

To bolster its point, the Goldwater complaint notes that nothing in the contract for the sale holds Pennrose to following through on the academy. And even if it did, it doesn\u2019t think having the academy clears Phoenix of a gift clause violation because the city government doesn\u2019t benefit from it directly. Pennrose comes out on top, especially since it will also receive\u00a0$2 million\u00a0in federal HOME funding for the project<\/span>.<\/p>\n

New Times reached out to the Bezos Academy to ask whether it plans to open a school at that location if the project is completed. Spokesperson Aarti Chandorkar said no. The city declined to comment due to the ongoing litigation. Pennrose LLC did not respond to questions and requests for comment.<\/p>\n

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\u201cIt just, to us, underscores the overpromise and underperform that is common in these gift clause cases,\u201d Napolitano said.<\/p>\n

\n

Different interpretation<\/h2>\n

But one expert \u2014 Arizona State University professor Mark Stapp, who is the director of the school\u2019s Masters in Real Estate Development program \u2014 doesn\u2019t agree with Goldwater\u2019s interpretation. Stapp has testified as an expert against Goldwater in similar cases.<\/p>\n<\/div>\n

Arizona has one of the strongest gift clauses in the country because it was so late in becoming a state, Stapp said: \u201cBy the time they got to us, all of the corruption that had been perpetrated by others before was known and figured out, and they are not going to let that happen here.\u201d But he doesn\u2019t think simply selling a property at a discount so it can be turned into affordable housing is a violation.<\/p>\n

It isn\u2019t viable for a property to be sold at market value and used for affordable housing, Stapp said. Putting affordable housing restrictions on a property decreases its earning potential over time and ultimately decreases its value.<\/p>\n

\u201cYou simply can\u2019t lease it or sell it for as much money,\u201d he said. \u201cPeriod.\u201d<\/p>\n

Some of the arguments in the case boil down to a difference in opinion over what constitutes a benefit to the city. Stapp\u2019s understanding is less literal. Affordable housing brings many benefits to the community, which in turn benefits the city, he said. Affordable housing has a ripple effect on residents and often comes with changes that last for many years, like deed restrictions on the property so it remains affordable for future owners. It doesn\u2019t need to be a literal exchange, he said.<\/p>\n

A development that is entirely affordable housing will have a massive impact.<\/p>\n

\u201cIt\u2019s a legitimate use of public funds and public assets to pursue affordable housing,\u201d he said.\u00a0<\/p>\n

And the early childhood education program would be a legitimate benefit if it happens, even if it\u2019s through a nonprofit with no association with city government. However, Stapp said if he were an expert on the case, he would most likely not factor in the free tuition as a benefit when doing his calculations.\u00a0<\/p>\n

\n

The tuition is not tied to the property and could benefit the city wherever it is located. A free lease to the academy is<\/em> tied to the property, so he would include it when calculating how much benefit the school gives the city. And on the whole, early childhood education is a good thing.\u00a0<\/p>\n

\u201cThink about making an argument to a jury that says childhood education, early childhood education isn\u2019t really necessary, and we shouldn\u2019t really support it,\u201d Stapp said. \u201cThat\u2019s a hard one to make with a straight face.\u201d<\/p>\n

Read more What are the wettest Phoenix monsoon seasons on record?<\/a><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The conservative organization says Phoenix violated the state constitution by giving a developer a discounted deal on the Roosevelt Row site.<\/p>\n","protected":false},"author":1,"featured_media":175,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-176","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"\nGoldwater Institute sues to stop Roosevelt Row affordable housing project - Phoenix Relocation News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/phoenixrelocationnews.com\/?p=176\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Goldwater Institute sues to stop Roosevelt Row affordable housing project - 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