What’s Happening with the Circles Records Building in Central Phoenix?

On November 2, the Roosevelt Action Association did something unexpected. The community group that represents one of downtown Phoenix's most vibrant communities asked the City of Phoenix to grant a tax incentive to Empire Group, a local developer with plans to construct a mixed-use residential development on the site of the building that was previously home to Circles Records & Tapes. It's the building Empire began — and then halted — demolishing earlier this year.

Opened in 1947 near Central Avenue and McKinley Street, the building first served as a Studebaker dealership called Stewart Motor Company. From 1972 to 2010, it housed the music shop Circles. It’s been empty ever since, and in February 2016, Leonard and Angela Singer sold it to the Empire Group for $2.65 million. It's being developed by Empire affiliate Aspirant Development.

Controversy soon followed.

Empire asked the City of Phoenix for something called a government property lease excise tax (GPLET), which lowers a developer’s tax burden for a set period of time as a way to incentivize commercial development. Empire representatives talked with both City officials and the Roosevelt Action Association about possible strategies for preserving rather than demolishing the building.

That's the prime objective of the Roosevelt Action Association. It's "dedicated to the preservation and improvement of the Roosevelt Historic Neighborhood," an area roughly bounded by Central and Seventh avenues, between McDowell and Fillmore streets.

But Empire began demolition on the Circles building on April 15 — in the midst of ongoing discussions about preserving the building.

Although it’s not listed on the national or local register of historical properties, the building has historical significance, says Michelle Dodds, historic preservation officer for the City of Phoenix. Buildings can’t be designated in Arizona without owner approval, Dodds says. For this building, they don’t have it.

City and community reactions to the demolition were swift and scathing. The City of Phoenix ended its discussions with Empire.

Mayor Greg Stanton took to Facebook on April 15, posting: “I am angry that in the middle of negotiating a plan to save the iconic Stewart Motor Company building, the developer began demolition. After my office participated in discussions between the developer and neighborhood leaders, I was confident that a resolution would be found. However, sadly, it appears that the developer was acting in bad faith.”

In that post, the Mayor also provided the following information as background: "The City’s Community and Economic Development Department was in the middle of discussions with the developer, Empire Group. Some of the agreed terms of the discussion stated that the developer would not demolish or remove any portion of the existing building on the Site prior to submitting for construction permits. Empire has plans to build a 19-story apartment building on the 1.24-acre site."

Historic preservationist Stacey Champion started an online petition urging the City of Phoenix not to grant Empire the tax break, and several hundred people signed it.

On April 18, Empire principal Geoffrey Jacobs issued a statement apologizing for the demolition.

Instead of resuming discussions with Empire, the City told the developer to make it right with the community. But that didn’t happen right away

On July 25, Roosevelt Action Association president Sherry Rampy sent a letter to Christine Mackay, director for the City’s community and economic development department. The letter expressed the groups’s opposition to the developer getting the GPLET tax break, but encouraged the City to resume talks with the developer.

Empire responded with an October 28 proposal that includes plans for preserving parts of the original building, incorporating local art, and making a series of payments to help fund preservation efforts in the Roosevelt Historic District.

The proposal says that Empire would make payments totaling $3.1 million over the course of 18 years for the purpose of historical preservation efforts in the area served by the Roosevelt Action Alliance.

“I’ve never seen a deal like this, with people offering money hoping to get a GPLET,” Dodds says.

The proposal also outlines several steps Empire would take to retain existing elements of the property, including exterior brick walls and the rotating spire on top of the building. It also promises to create a “green building” and include several art-related elements. Elements would include a “historical interpretation exhibit” regarding the history of the building and surrounding area, and include significant public art works on or around the building’s exterior such as a large-scale sculpture by Pete Deise and murals by artists including Ashley Macias. Both artists have confirmed that they’ve been approached by the developer about creating these works.

Empire presented the plan during a Roosevelt Action Association meeting at New City Church on November 1, which several community members attended. Following discussions, the Roosevelt Action Association voted to accept the proposal.

Then, it notified the City of Phoenix about its change of heart.

On November 2, Rampy send a letter to City leadership on behalf of the Roosevelt Action Association, which requests that the City renew GPLET discussions with Empire. Addressed to Mayor Stanton, members of the Phoenix City Council, and City staff, the letter also states that Roosevelt Action Association now supports the tax break – assuming conditions outlined in Empire’s October 28 proposal are met.

It’s unclear at this point whether the City of Phoenix will resume GPLET-related discussions with Empire.

Empire already has a full demolition permit. So it could decide at any time to scrap the property without preserving any of the existing structure. It would be perfectly legal for them to tear the building down tomorrow, although that would likely nix their chance of getting the GPLET.

In any event, the Phoenix City Council has already taken action to make it less likely that a similar demolition will occur before City and community conversations with developers about historical preservation or other concerns take place.

On November 2, City Council voted to change the demolition permit application review period from three days to 30 days for commercial buildings that are 50 years or older and for all buildings identified as eligible for historic designation. The ordinance also requires that public notice be given before a demolition permit gets issued.

"What happened to Circles was sad, but I guess if there is one good outcome from it, it's that we've created a better process," Dodds says. "You can't just come get a demolition permit without having dialogue with the community."