Under Cave Creek’s form of government, the mayor has sole control over what issues are placed on the town council agenda. In March of 2015, the mayor denied the residents of Area 96-1 a town council vote on an extension to the Area 96-1 Annexation Agreement (AA), and now we know why: the AA is not developer-friendly. On April 6, 2015, under Resolution No. R2015-12, and as a result of its placement on the town council meeting agenda by the mayor, the mayor and town council gave preliminary approval to Cahava Springs developer Mark Stapp and Cahava Springs Development Corporation (CS) to create their own town within the boundaries of our town by establishing a special taxing district on the 1,000± acres that CS owns and which lie within the boundaries of Cave Creek. By law, this “special taxing district” will be an independent political subdivision, i.e., another town within the borders of our town. This newly-formed town will not be subject to any governance by our town council. The statute states “Except as otherwise provided in this section, a district is considered to be a municipal corporation and political subdivision of this state, separate and apart from the municipality.” A.R.S. 48-6807(B). (writer’s emphasis.)
Resolution No. R2015-12 was approved by the town council over the objections of residents in attendance and over the objections of two of the town’s legal advisors. Mark Stapp, and his legal and financial entourage which were in attendance, assured town council members that approval of the Resolution would not commit the town to anything --- and the council believed them.
Their assertion to the town council was not true.
By approving the Resolution, the town is statutorily committed to completing the special taxing district process. Under Arizona law the town is obligated to conduct another meeting to give final approval. The statue, A.R.S. 48-6804, identifies the persons who are allowed to file an objection to the creation of a special taxing district as being “Any person claiming an interest in real property that the resolution discloses is situated in the district or any qualified elector of the district.…” No Cave Creek citizen is qualified to file an objection under the statute because the Cahava Springs property is wholly owned by Mark Stapp and CS. Since no Cave Creek citizen is allowed to speak either in favor or in opposition to the creation of another town within our town, the meeting to give final approval can be noted as a consent item on a town council meeting agenda.
As cited above, the newly-formed town in Cave Creek established by Mark Stapp and CS will not be subject to any governance by the Cave Creek town council. A.R.S. 48-6807(B). The newly-formed town will have its own 3-member governing board (town council). Because Mark Stapp and CS own all of the property within the proposed newly-formed town, the three members on the Board in the newly-formed town will be elected by Mark Stapp and CS. This 3-member Board in the newly-formed town has statutory authority to impose a property tax on the purchasers of the vacant lots in the Cahava Springs development. Despite the recent media claims, Mark Stapp and CS have no intention of building any Frank Lloyd Wright-styled homes or any other styled homes in Cahava Springs. At the April 6th Cave Creek town council meeting Mark Stapp estimated that a 1½ acre vacant lot in his newly-formed town would be assessed a tax on the land of approximately $2,500/year or ±$75,000 over the thirty-year life of the financing bonds. In addition to imposing a property tax on purchasers of the vacant lots, the newly-formed town has statutory authority to establish, charge and collect user fees, rates or charges against a property owner for the use of any infrastructure or service in the newly-formed town. A.R.S. 48-6808(6). Despite being inside Cave Creek’s town boundary none of the newly-formed town’s tax revenues will ever be paid to the town of Cave Creek. Should there come a time when Cave Creek residents are forced to approve a residential property tax to avoid bankruptcy, NONE of the residents or property owners in the Cahava Springs development will be required to pay the Cave Creek property tax.
The newly-formed town does not have the power to enact its own zoning ordinances. However, it does have the authority to interpret Cave Creek’s zoning whether through town ordinances or its understanding of the town’s zoning policy as stated in our General Plan. As currently written, Cave Creek’s General Plan contains a DR-43 overlay on all residential properties in Cave Creek. For this reason it is extremely critical to the future of Cave Creek that DR zones 70, 89 and 190 be put back into the General Plan that is currently being drafted. If these DR zones are not put back into our town’s General Plan, based on the DR-43 overlay zoning in Cave Creek’s General Plan, the 3-member Board in the newly-formed town could reduce the size of lots in Cahava Springs to less than one-acre without having to obtain approval from our town council.
There is no financial benefit to the citizens of Cave Creek for the town council to cede its municipal authority over 1,000± acres of land within the town to a developer. The Arizona statute authorizing Revitalization Districts is entirely for a developer’s financial benefit.
According to his testimony, Mark Stapp and CS will be issuing $20-million dollars in bonds to pay infrastructure costs. By his own testimony, $5-million dollars from these bond proceeds will be used to immediately reimburse Mark Stapp and CS for the costs they claim has been spent by them for infrastructure.
Unlike other special taxing districts authorized under Title 48 there is no cloak of immunity afforded to towns formed under the “Revitalization Districts” statute. However, the 3-member Board operating the newly-formed town is cloaked with immunity. In the event of default on the $20-million dollar bond repayment, who will the bond holders sue to recover their financial investment since the three board members operating the newly-formed town are cloaked with immunity? In the event of bankruptcy, will the Bankruptcy Court require Cave Creek be part of the bankruptcy proceedings because the newly-formed town is within our municipal boundaries? As currently written, Title 48, chapter 39 does not provide Cave Creek with any cloak of immunity or other statutory remedy to escape litigation by bond holders, other litigants, or protection in federal Bankruptcy Court. If the Bankruptcy Court should order the sale of Cahava Springs the law allows another town, city, county or even the State to purchase the property. In that event, inside the borders of Cave Creek there could be a suburb of a Phoenix or Scottsdale or other municipality.
These are some of the many, many unanswered questions and untested issues that our newly-elected town council should have considered before disregarding the recommendation by the two town attorneys not to sign the Resolution. Despite our town’s multi-million dollar infrastructure investment for water, the newly-formed town will contract with the city of Phoenix for its water services and supplies, not the Cave Creek water system. Likewise, any homes on the west side of Cave Creek which are currently on wells, adjacent to Cahava Springs, and wish to hook up to a municipal water supply will also be on Phoenix water, not Cave Creek water. The statue also does not state that the newly-formed town is required to pay for its own police security; although this is a requirement under the law for municipalities such as Cave Creek.
Unanswered questions and untested issues posed above and in articles written by other Cave Creek citizens are likely the reason that no town or city in Arizona has ever approved allowing a developer to form an independent town within their town boundaries. Cave Creek would be the first in Arizona.
The town of Cave Creek will not survive the kind of financial management that this new council is pursuing. Without putting too fine a point on the issue, it may even be too late to do anything to reverse the financial management course this new council has charted for the town because of its approval of the Resolution. The authority that citizens have for a referendum challenge is unclear, A.R.S. 48-6806. A Special Action lawsuit to the Court of Appeals will be a financial expense that Cave Creek citizens --- not the town coffers --- will have to fund, while the town coffers will be paying the legal expenses for the lawyer’s the town council will hire to defend them in the Special Action litigation. The four newest council members are safe from recall for six months, leaving a quorum in support of a newly-formed town on the council. (A recall of at least four councilmembers is required to affect a quorum.) Unfortunately, by the time any of these events to stop the formation of Mark Stapp’s town within our town, irreversible damage will have been done to our town by our town council. The bonds will be sold and Mark Stapp’s town within our town will likely be in existence.
Is hoping that the members on town council will perform their due diligence before their final vote the only hope Cave Creek citizens have for our town’s survival?
If you wish to further discuss this issue, or you can’t find a copy of the Arizona statues governing Revitalization Districts referred to herein, contact me at the email address listed below.
The contact information for members on town council is listed for your convenience. Don’t delay! Call them now or send an email. Tell our mayor and town council members that our town is not for sale to developers! Mayor Vincent Francia, [email protected], (480) 488-0672; Vice Mayor Steve LaMar, SL[email protected]; Councilwoman Susan Clancy, [email protected]; Councilman Dick Esser, [email protected]; Councilman Mark Lipsky, [email protected]; Councilman Ernie Bunch, [email protected], (602) 799-0838; Councilman Tom McGuire, [email protected], (480) 575-1705.
There are numerous citizens in Cave Creek helping to spread the facts about this issue and the first of their articles will be appearing in the Thursday, April 16, 2015 edition of Cave Creek’s on-line paper www.desertfoothillschronicle.org.
Be informed. Stay informed. Get involved. Demand the truth.
Janelle Smith-Haff
Resolution No. R2015-12 was approved by the town council over the objections of residents in attendance and over the objections of two of the town’s legal advisors. Mark Stapp, and his legal and financial entourage which were in attendance, assured town council members that approval of the Resolution would not commit the town to anything --- and the council believed them.
Their assertion to the town council was not true.
By approving the Resolution, the town is statutorily committed to completing the special taxing district process. Under Arizona law the town is obligated to conduct another meeting to give final approval. The statue, A.R.S. 48-6804, identifies the persons who are allowed to file an objection to the creation of a special taxing district as being “Any person claiming an interest in real property that the resolution discloses is situated in the district or any qualified elector of the district.…” No Cave Creek citizen is qualified to file an objection under the statute because the Cahava Springs property is wholly owned by Mark Stapp and CS. Since no Cave Creek citizen is allowed to speak either in favor or in opposition to the creation of another town within our town, the meeting to give final approval can be noted as a consent item on a town council meeting agenda.
As cited above, the newly-formed town in Cave Creek established by Mark Stapp and CS will not be subject to any governance by the Cave Creek town council. A.R.S. 48-6807(B). The newly-formed town will have its own 3-member governing board (town council). Because Mark Stapp and CS own all of the property within the proposed newly-formed town, the three members on the Board in the newly-formed town will be elected by Mark Stapp and CS. This 3-member Board in the newly-formed town has statutory authority to impose a property tax on the purchasers of the vacant lots in the Cahava Springs development. Despite the recent media claims, Mark Stapp and CS have no intention of building any Frank Lloyd Wright-styled homes or any other styled homes in Cahava Springs. At the April 6th Cave Creek town council meeting Mark Stapp estimated that a 1½ acre vacant lot in his newly-formed town would be assessed a tax on the land of approximately $2,500/year or ±$75,000 over the thirty-year life of the financing bonds. In addition to imposing a property tax on purchasers of the vacant lots, the newly-formed town has statutory authority to establish, charge and collect user fees, rates or charges against a property owner for the use of any infrastructure or service in the newly-formed town. A.R.S. 48-6808(6). Despite being inside Cave Creek’s town boundary none of the newly-formed town’s tax revenues will ever be paid to the town of Cave Creek. Should there come a time when Cave Creek residents are forced to approve a residential property tax to avoid bankruptcy, NONE of the residents or property owners in the Cahava Springs development will be required to pay the Cave Creek property tax.
The newly-formed town does not have the power to enact its own zoning ordinances. However, it does have the authority to interpret Cave Creek’s zoning whether through town ordinances or its understanding of the town’s zoning policy as stated in our General Plan. As currently written, Cave Creek’s General Plan contains a DR-43 overlay on all residential properties in Cave Creek. For this reason it is extremely critical to the future of Cave Creek that DR zones 70, 89 and 190 be put back into the General Plan that is currently being drafted. If these DR zones are not put back into our town’s General Plan, based on the DR-43 overlay zoning in Cave Creek’s General Plan, the 3-member Board in the newly-formed town could reduce the size of lots in Cahava Springs to less than one-acre without having to obtain approval from our town council.
There is no financial benefit to the citizens of Cave Creek for the town council to cede its municipal authority over 1,000± acres of land within the town to a developer. The Arizona statute authorizing Revitalization Districts is entirely for a developer’s financial benefit.
According to his testimony, Mark Stapp and CS will be issuing $20-million dollars in bonds to pay infrastructure costs. By his own testimony, $5-million dollars from these bond proceeds will be used to immediately reimburse Mark Stapp and CS for the costs they claim has been spent by them for infrastructure.
Unlike other special taxing districts authorized under Title 48 there is no cloak of immunity afforded to towns formed under the “Revitalization Districts” statute. However, the 3-member Board operating the newly-formed town is cloaked with immunity. In the event of default on the $20-million dollar bond repayment, who will the bond holders sue to recover their financial investment since the three board members operating the newly-formed town are cloaked with immunity? In the event of bankruptcy, will the Bankruptcy Court require Cave Creek be part of the bankruptcy proceedings because the newly-formed town is within our municipal boundaries? As currently written, Title 48, chapter 39 does not provide Cave Creek with any cloak of immunity or other statutory remedy to escape litigation by bond holders, other litigants, or protection in federal Bankruptcy Court. If the Bankruptcy Court should order the sale of Cahava Springs the law allows another town, city, county or even the State to purchase the property. In that event, inside the borders of Cave Creek there could be a suburb of a Phoenix or Scottsdale or other municipality.
These are some of the many, many unanswered questions and untested issues that our newly-elected town council should have considered before disregarding the recommendation by the two town attorneys not to sign the Resolution. Despite our town’s multi-million dollar infrastructure investment for water, the newly-formed town will contract with the city of Phoenix for its water services and supplies, not the Cave Creek water system. Likewise, any homes on the west side of Cave Creek which are currently on wells, adjacent to Cahava Springs, and wish to hook up to a municipal water supply will also be on Phoenix water, not Cave Creek water. The statue also does not state that the newly-formed town is required to pay for its own police security; although this is a requirement under the law for municipalities such as Cave Creek.
Unanswered questions and untested issues posed above and in articles written by other Cave Creek citizens are likely the reason that no town or city in Arizona has ever approved allowing a developer to form an independent town within their town boundaries. Cave Creek would be the first in Arizona.
The town of Cave Creek will not survive the kind of financial management that this new council is pursuing. Without putting too fine a point on the issue, it may even be too late to do anything to reverse the financial management course this new council has charted for the town because of its approval of the Resolution. The authority that citizens have for a referendum challenge is unclear, A.R.S. 48-6806. A Special Action lawsuit to the Court of Appeals will be a financial expense that Cave Creek citizens --- not the town coffers --- will have to fund, while the town coffers will be paying the legal expenses for the lawyer’s the town council will hire to defend them in the Special Action litigation. The four newest council members are safe from recall for six months, leaving a quorum in support of a newly-formed town on the council. (A recall of at least four councilmembers is required to affect a quorum.) Unfortunately, by the time any of these events to stop the formation of Mark Stapp’s town within our town, irreversible damage will have been done to our town by our town council. The bonds will be sold and Mark Stapp’s town within our town will likely be in existence.
Is hoping that the members on town council will perform their due diligence before their final vote the only hope Cave Creek citizens have for our town’s survival?
If you wish to further discuss this issue, or you can’t find a copy of the Arizona statues governing Revitalization Districts referred to herein, contact me at the email address listed below.
The contact information for members on town council is listed for your convenience. Don’t delay! Call them now or send an email. Tell our mayor and town council members that our town is not for sale to developers! Mayor Vincent Francia, [email protected], (480) 488-0672; Vice Mayor Steve LaMar, SL[email protected]; Councilwoman Susan Clancy, [email protected]; Councilman Dick Esser, [email protected]; Councilman Mark Lipsky, [email protected]; Councilman Ernie Bunch, [email protected], (602) 799-0838; Councilman Tom McGuire, [email protected], (480) 575-1705.
There are numerous citizens in Cave Creek helping to spread the facts about this issue and the first of their articles will be appearing in the Thursday, April 16, 2015 edition of Cave Creek’s on-line paper www.desertfoothillschronicle.org.
Be informed. Stay informed. Get involved. Demand the truth.
Janelle Smith-Haff
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