Attachment A CBD RDA Policy Framework.pdf

ATTACHMENT A 
 
DRAFT - City of Phoenix 
Government Property Lease Excise Tax Policy 
(CBD and Redevelopment Areas) 
 
PURPOSE 
 
This policy is to define the City’s goals and utilization of the economic 
development tool known as Government Property Lease Excise Tax (GPLET). 
Under state law, GPLET applies to the private use of government owned land 
throughout the city. This policy is specific to the utilization of this tool in the area 
located within both the City of Phoenix designated Central Business District and 
a “Redevelopment Area” or “RDA,” defined as a slum or blighted area declared 
by the Phoenix City Council pursuant to ARS Title 36, Chapter 12, Article 3. 
 
BACKGROUND 
 
GPLET is an economic development tool available to Arizona cities and counties 
to incentivize development or redevelopment in specific areas. The City of 
Phoenix (City) has identified City Council designated Redevelopment Areas as 
the primary area in which private landowners may apply for GPLET. The 
Redevelopment Area that also lies within a Central Business District (CBD) 
allows for enhanced economic development benefits. 
 
The Legislature created GPLET in 1996 at Arizona Revised Statutes sections 42-
6201 through 46-6210. GPLET allows ownership of property to be transferred 
from a private entity to the City. Although government-owned property is not 
subject to property tax, GPLET imposes an excise tax from private entities that 
lease government-owned property or for properties located within both an RDA 
and CBD, that excise tax may be abated for up to eight years. 
 
GPLET can help to solve the financial gap for workforce or attainable housing, 
infill development, and redevelopment challenges, which may include increased 
design and development costs, entitlement processes, utility and infrastructure 
challenges and environmental issues, as well as land assemblage. 
 
Utilization of GPLET can strategically encourage redevelopment; help address 
the housing crisis taking place in Phoenix and the rest of Arizona and the country 
today, create jobs, new capital investment and tax revenues; enhance property 
values and capitalize on existing public infrastructure investments; as well as

generate excise taxes typically greater than the prior property taxes of the parcel 
while the property is being leased. 
 
Projects assisted by GPLET help the City achieve its policy and plan goals 
including those in the Housing Phoenix Plan, the General Plan, and 
Redevelopment Area Plans to create a thriving, diverse, inclusive, equitable, 
sustainable, vibrant, and affordable community. 
 
POLICY 
 
The City is seeking to utilize GPLET to facilitate development and redevelopment 
of our strategic and challenged areas of our community, as defined by our 
Redevelopment Areas and Central Business District, by approving the careful 
and considered use of this State authorized tool to assist with private 
development’s financing, construction, and management of projects that 
implement and further our redevelopment area plans as well as established City 
policies and goals.  These policies and goals include addressing the housing 
crisis that is currently being faced in Phoenix, revitalization of older properties 
located in our CBD and RDA’s, to further implement the City’s strategic economic 
development vision, downtown strategic vision, enhance our investments in 
public infrastructure including public transportation, light rail and high-capacity 
transit as well as other public investments.  
 
Projects that will be considered for GPLET treatment must be located within the 
City’s single CBD, a RDA and address the following goals, where applicable: 
 
A. Be consistent with the Downtown Strategic Plan, Phoenix Housing Plan, the 
General Plan, Streets Transportation Masterplan, the Climate Action Plan, 
Planning & Development Codes, Ordinances and Policies, Transit Oriented 
Development and Walkable Urban Code 
B. Promote dense urban mixed-use, urban retail, multi-modal and pedestrian-
friendly development 
C. Support high rise office development where supported by market conditions 
D. Create equitable and diverse development 
E. Encourages redevelopment of older retail and other community amenities 
F. Provides opportunity for retail and small business  
G. Promotes sustainability and climate/heat readiness 
H. Include open space, public art, placemaking with community amenities 
I. Encourages the creation of an Entrainment District 
J. Creation of safe and thoughtful connections between new development and 
existing projects, neighborhoods, single-family residences, and businesses

K. Protect historic structures and neighborhoods 
L. Provides for true ground-floor space activation with commercial, retail, 
restaurants and other types of publicly available space, where applicable 
M. Creates or maximizes public parking 
N. Incorporate or create a minimum of 20% workforce or affordable housing 
 
The Community and Economic Development Department shall update the City’s 
existing GPLET application and procedures to review, evaluate, and bring 
forward to City Council for consideration, requests for the use of GPLET in 
Redevelopment Areas.  This procedure shall include the following minimum 
elements for review: 
 
a. Submittal and development parameters such as: 
i. site design, mix of uses, and connectivity and transition to adjacent 
communities. 
ii. Amenities for both private and public users. 
iii. General compliance with codes and plans. 
iv. Timeliness of development 
v. Inclusion of public benefits 
b. Review and evaluation steps 
c. Engagement and outreach to the community and impacted taxing districts 
d. Engagement with the Council Office in the district of the project 
 
If a request includes a mix of uses or has a residential component to the project, 
the City will seek a minimum of 20% of the units, in a proportional mix of unit 
types, for workforce housing. A workforce housing unit means a rental residential 
apartment unit that will be made available for lease exclusively to households 
that demonstrate current income of 80% to 120% of the Area Median Income 
Limits (AMI), and Affordable Housing is defined as those unites at 80% or below 
of AMI, as published annually by the U.S. Department of Housing and Urban 
Development (HUD) for the Phoenix-Mesa-Chandler, AZ Metropolitan Statistical 
Area (MSA). Alternatively, the City may require a developer to make a payment 
in lieu of units to the City’s Affordable Housing Trust Fund in the amount of 200% 
of the property tax the City would otherwise receive from the completed project 
for the term of the GPLET lease or alternative Public Benefit Fund. Any payment 
in lieu would be required prior to the execution of the lease. The selection 
between the contribution of workforce housing or a payment to a specific Fund is 
at the sole discretion of the City Council.   Utilization of the Affordable Housing 
Trust Fund or an alternative Public Benefit Fund would be through separate and 
individual actions of the City Council.

For the purpose of calculating rental rates, the monthly rent for a workforce 
housing unit may not exceed 30% of the Income Limit for the respective 
household size divided by 12, and will be adjusted annually based on changes to 
the MSA listed above. 
 
Additionally, the City will require that the developer generate to the City and other 
taxing jurisdictions new revenue in the form of minimum tax payments (in the 
construction of the project, other transaction privilege taxes during the lease, and 
property taxes after the lease term), based on a third-party economic impact 
study. If the developer fails to generate these minimum tax payments, it will be 
required to make additional payments to the City to cover any shortfall. 
 
Applicants will be required to engage in community meetings prior projects 
progressing to City Council Subcommittee and Formal meetings. City staff shall 
also complete all required statutory processes and notices to taxing jurisdictions. 
Staff shall return to City Council for annual updates on this policy. 
 
COMPLIANCE  
 
Approved projects shall enter into development agreements with the City which 
shall include negotiated terms and conditions including rental payments, 
verifiable public benefits, and audit provisions of the terms of the agreements as 
well as standard City terms and conditions.  Development agreements, leases 
and other contracts must also comply with State statutes and City codes.