Flagstaff City Council approves certificate of economic hardship for 19 West Birch, clearing way for hotel and garage

The Flagstaff City Council voted July 8 to grant an appeal of the Heritage Preservation Commission’s denial and approve a certificate of economic hardship for 19 West Birch Avenue, a decision that the council majority said allows a proposed Graduate-brand hotel and parking garage to proceed toward demolition and redevelopment.

The vote followed a staff review of code requirements and two cultural resource studies, expert testimony about the building’s historic associations, detailed developer financial projections and about two hours of public comment. The council’s motion to grant the appeal passed in council action after deliberation.

Why it matters: Council members framed the decision as a clash between downtown economic revitalization and historic‑preservation standards. Supporters said protracted delay would imperil a roughly $50 million private investment and the city’s downtown recovery; opponents said the record shows local and national historic associations tied to the Old City Hall and urged that preservation and fuller exploration of alternatives be favored.

Staff and evidence presented Lauren Clementino, the city’s heritage preservation officer, opened the item with a summary of the process: phase 1 and phase 2 cultural resource studies had been completed and the Heritage Preservation Commission (HPC) had concluded the building met local and national criteria for significance but denied the applicant’s economic‑hardship claim at its June hearing. Clementino told the council that Flagstaff code requires six criteria to be satisfied before a certificate of economic hardship may be issued, including independent identification of resources, demonstration of economic hardship, and that the hardship is not self‑created.

Expert and developer presentations Caitlin Stewart of Cornerstone Environmental Consulting, the applicant’s consultant, said the building commonly called Old City Hall (built about 1950–51) is locally significant for architecture and is nationally significant because of events tied to the American Indian Movement and subsequent ACLU investigation. "We found that the building was nationally significant for events that were associated with the building," Stewart said, and described proposed mitigation that would document the site’s history and support a citywide Indigenous interpretive trail.

Tyler Mark, speaking for the applicant, presented the economic case for demolition and redevelopment, citing the project budget and revenue projections: "The property's roughly gonna cost $50,000,000 to develop. It'll bring in about 9 and a half million dollars worth of revenue, annually," he said. He and the owner told the council that restoring the existing structure to a viable commercial use would require multi‑million‑dollar investments and still leave an appraisal gap that lenders would not finance. The applicant’s materials compared current raw revenue (about $216,000) and an apartment‑conversion projection ($368,000) against the proposed hotel revenue and said preservation would not pencil out.

Public comment and Indigenous‑community input Speakers from the city’s Indigenous Commission and the Indigenous Circle of Flagstaff urged the council to prioritize preserving and honestly interpreting the site’s human‑rights history. Moana Lamawombeia, co‑chair of the Indigenous Commission, read a letter saying the site "holds a significant historic importance in relation to the Indigenous human rights movement" and that commissioners had favored an interpretive walking trail over preserving the physical building.

Business and neighborhood voices urged a different balance. Several downtown businesses and lodging‑industry representatives urged the council to approve the appeal to avoid long delays that they said would deter investment and harm downtown economic health.

Council debate and ruling Council members split over how to apply the city’s six legal criteria. Several members said the record satisfied the statutory tests, including independent studies, appraisals, financing exploration and a finding that hardship was not self‑created. Other members — and a unanimous HPC at an earlier hearing — said the owner’s purchase in the historic overlay and available alternatives suggested a self‑created hardship and that more exhaustive tests of adaptive reuse (including housing) had not been proven.

In the end, the council majority voted to grant the appeal and approve the certificate of economic hardship. The motion was made by Council member Matthews and seconded; the motion passed and the mayor adjourned the meeting. The decision allows the applicant to move forward with plans that include a hotel and parking garage, and the developer reiterated commitments discussed at the meeting — interpretive materials, engagement with the Indigenous Commission, and the use of locally‑sourced malapai stone in the new design.

What happens next Approving the certificate of economic hardship does not bypass later land‑use or design reviews: the applicant still must complete applicable design‑review and certificate‑of‑appropriateness processes, and the HPC and city staff will remain involved in mitigation and design conditions. Council and public speakers repeatedly called for a review of the city’s process so that historic‑overlay impacts are identified earlier in the development timeline.

The council’s action was a vote on a specific appeal; the meeting record shows the council approved the certificate by majority vote and then adjourned the session.