Numbers show public safety costs exceed value of Scottsdale entertainment district downtown

Downtown Scottsdale is home to iconic western art cherished by visitors and local alike. (Independent Newsmedia/Melissa Fittro)

Visitors from throughout the Valley, country and even the world visit Scottsdale on a regular basis and often make it a point to visit — and spend their money — at the restaurants and nightspots in what locals call the “entertainment district.”

But protecting that popular area comes at a high cost to the city.

According to one recent study, the city may be paying far more to protect the entertainment district than what it receives in return from sales taxes.

An internal audit reveals the city of Scottsdale pays $3,198,737 annually in public safety costs — including costs associated with the police and fire departments — to patrol, manage and mitigate issues that may arise in this particular area.

And that figure is on the rise.

In 2011 that number equated to $1.2 million, but did not include costs allocated to the Scottsdale Fire Department.

New data shows fire calls to the entertainment district represented 20 percent of the 7,903 calls for service over the period of from July 2015 to June 2016 at Fire Station 602 at 7522 E. Indian School Road.

Numbers also show the entertainment district accounts for 25 percent of all police calls for service in Patrol District 2, which has north and south boundaries of Lincoln Drive and Osborn Road and west and east boundaries of 64th Street and Pima Road.

According to one member of Scottsdale City Council, the study points to one fact: the entertainment district is a drain on city funds.

Councilman David Smith says it’s time the city determine once and for all what it costs to protect the entertainment district and decide if the costs outweigh the benefit.

However, one longtime downtown advocate — who for years objected to the large and unruly crowds visiting the area — disagrees and has changed his tune. He now believes recently adopted ordinances and new housing options have gone a long way toward reinvigorating the once-fledgling marketplace.

He thinks that turnaround is good for the city and well worth the cost to protect those who visit, live and work in the entertainment district, the area with east and west boundaries of Scottsdale and Miller roads, and the north and south boundaries of Indian School and Camelback roads.

“The argument is often confused by proponents of the bar district because they count revenues from nearby non-bar businesses in the square-mile entertainment district even though these businesses do not account for any extraordinary public safety expenses,” said Scottsdale Councilman David Smith Monday, Dec. 5.

A breakdown of the two studies suggests:

  • There are three fewer establishments with a Series 6 liquor license in the entertainment district in 2011 compared with 2016.
  • In 2011, the anticipated General Fund influx from those establishments was $400,000, which includes sales tax remits, license fees and property tax levies. In 2016 that number is expected to be $623,619.
  • The cost to manage the entertainment district from a public safety perspective has increased just under $1.5 million compared to five years earlier.
  • The city now knows it costs the fire department $499,815 annually to provide auxiliary services to the police department and medical emergencies.

Councilman Smith says the devil is in the details.

“From these statistics, one can reasonably infer the bar business in our entertainment district has grown by 50 percent — measured by sales tax alone, $555,363 compared to $366,000,” he pointed out. “Unfortunately, the incremental public safety expenses are now five times the bar revenue number.”

The November entertainment district study was conducted by Scottsdale City Treasurer Jeff Nichols with public safety data provided by both the Scottsdale police and fire departments.

“Expenses for public safety have been estimated by or with information given to me by the police and fire departments,” Mr. Nichols wrote in a Nov. 1 memo to Scottsdale City Council.

“In the same period of time — July 2015 through June 2016 — the fire department responded to 1,357 calls for service in the district out of a total of 7,903 calls for service out of Fire Station 602.

“This equates to 17.2 percent of the calls responded to by staff at Fire Station 602. You will note in the third attachment that the estimated costs for operating Fire Station 602 is $2,905,901. Multiplying the estimated cost by 17.2 percent results in an estimated cost of fire service in the district of $499,815.”

Scottsdale Police Sgt. Ben Hoster says personnel details have remained steady over the last five years within the entertainment district.

“It has stayed relatively the same,” he said in a Dec. 7 statement pointing out downtown Scottsdale has seen an influx to visitors due to an uptick in special events.

“The entertainment district has seen an increase of high density residential properties and commercial businesses. A significant number of major ‘special events’ in the Phoenix metropolitan area, which include the Super Bowl, the BCS College Football Championship, annual college football bowl games, and this year the NCAA Basketball Final Four, have an influence on patronage in the direct area as well.”

The iconic “Welcome to Old Town Scottsdale” welcoming visitors to Old Town Scottsdale, which is in close proximity to the entertainment district. (File photo)

Investing in the city’s future

One of the largest critics of entertainment district issues — those ranging from public urination and drunkeness to physical violence and vandalism — now says he believes the downtown community has turned a corner.

Bill Crawford

“I do. I think it is a much safer place,” said Scottsdale resident and proprietor Bill Crawford in a Dec. 6 phone interview.

“Once the city acknowledged we had a problem and needed a solution, we were able to get six different ordinances passed that really made a difference.”

Mr. Crawford owns Basic Training fitness center at 4390 N. Miller Road in downtown Scottsdale.
Since 2011, several noise ordinances have been crafted, building stipulations created and community associations formed. The issues surround the amount of noise emitted from popular Scottsdale clubs and the kind of people attracted to and around the local bar scene, locals says.

Back in 2011, Mr. Crawford would host walking tours of downtown Scottsdale during peak bar business hours to illustrate the party scene the once sleepy downtown sector had evolved into.

“The reason I am not out there every weekend is because this has been greatly mitigated,” he said. “I am not kidding, I work down here and I live down here. Before the bar district, the downtown was a sleepy, quiet downtown.”

While Mr. Crawford says great strides have been made in downtown party management he also says the new demographic created by new housing options is something Scottsdale should want.

“This has brought a demographic in Scottsdale we weren’t accustomed to have visiting,” he explained.

“You can’t have the businesses being successful without having the people. One thing that has really made a difference is the housing down here. They (new housing options) are making downtown work and I think it is working better than it has in a long time.”

The more, the merrier, Mr. Crawford contends.

“We are attracting the future of Scottsdale through the entertainment district. The entertainment district is where successful millennials want to be,” he explained.

“As long as it is managed and we don’t take our eye off the ball. We have made great progress in that area, but it’s the kind of thing that requires constant supervision.”

Rising costs ‘troubling’

Councilman Smith says the 2016 study gives a much more in-depth look at the dollars and cents of the Scottsdale entertainment district.

David Smith

“I think the current study is a better capture of the costs than what was done five years ago,” he said.
“Five years ago it was only looking at the police department’s incremental costs. Now they are looking at fire department incremental costs for protecting the entertainment district.”

Councilman Smith calls the cost numbers troubling today — and five years ago.

“It was troubling even five years ago and even more so that now it continues to rise,” he said of the latest cost figures.

“The intent is to try and figure out if we are spending more money over and above incremental fire and police protection in that area. What is the revenue I am getting from those businesses and how does that match up with the incremental cost?”

Councilman Smith says the costs of management exceeds the carrot offered by the city’s entertainment district.

“The argument that is sometimes made is the people who come to the entertainment district also spend money elsewhere. I think that argument is largely fallacious,” he said.

“They (bar patrons) come for a purpose, enjoy their evening then they go home. These people are not shopping at Fashion Square. I don’t think it enhances our cache of us being a destination for tourists to visit. If it does note enhance our image or livability then the next question is does it pay for itself?”

Councilman Smith contends the entertainment district does not pay for itself.

“Frankly, there is nothing unique about these establishments — nothing iconic. What we try to do in Scottsdale is create things that are uniquely iconic to Scottsdale. Two dozen bars? Anyone can build them and there is nothing iconic or memorable about the bar district.”

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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