EDE Minutes Draft (MR Edits).pdf

Attachment A 
Phoenix City Council 
Economic Development and Equity Subcommittee 
Summary Minutes 
Wednesday, June 22, 2022 
City Council Chambers 
200 W. Jefferson St. 
Phoenix, Ariz. 
Subcommittee Members Present                    Subcommittee Members Absent 
Vice Mayor Laura Pastor, Chair                   
Councilwoman Ann O’Brien 
Councilwoman Yassamin Ansari        
 
 
 
Councilwoman Debra Stark 
 
CALL TO ORDER 
Vice Mayor Pastor called the Economic Development and Equity Subcommittee to order 
at 10:00 a.m. with Councilwoman Ansari and Councilwoman Stark present. 
Councilwoman O’Brien joined the meeting via Webex at 10:30 a.m. 
CALL TO THE PUBLIC 
MINUTES OF MEETINGS 
1. Minutes of the Economic Development and Equity Subcommittee Meeting 
Councilwoman Stark made a motion to approve the minutes of May 25, 2022 Economic 
Development and Equity Subcommittee meeting. Councilmember Ansari seconded the 
motion, which passed 3-0-1. 
DISCUSSION AND POSSIBLE ACTION (ITEM 2)  
2. Downtown Redevelopment Tools Update 
Community and Economic Development (CED) Director Christine Mackay and Deputy 
Director Xandon Keating gave a staff update regarding Downtown Phoenix 
redevelopment tools. 
Ms. Mackay briefly discussed the redevelopment tools and the strategic economic 
development fund which receives $1.2 million from general fund revenues each year. 
She noted this fund was established in 2015 and used for Council-approved economic 
development projects related to infrastructure and job creation.  
Vice Mayor Pastor asked what the current amount was in the strategic economic 
development fund.

Ms. Mackay replied the strategic economic development fund receives $1.2 million in 
general fund revenues each year and the fund currently had $250,000 available with no 
commitments after 2028. 
Vice Mayor Pastor asked which current commitments would extend to 2028. 
Ms. Mackay stated she would provide the Council with a full list of current strategic 
economic development fund commitments up to 2028. 
Vice Mayor Pastor asked how the City determines which businesses were qualified for 
strategic economic development funds. 
Ms. Mackay stated qualified businesses must be a job creator in the City, expand job 
opportunities, have a minimum average salary of $50,000 a year, and pay for employee 
healthcare. She noted the salary requirement has gone down at the direction of Council 
as jobs expand in underserved areas of the community. 
Vice Mayor Pastor reiterated the decreased salary requirement was used as a tool to 
create jobs in underserved areas of the community. 
Councilwoman Ansari asked if the strategic economic development fund could be used 
for projects other than infrastructure projects.  
Ms. Mackay explained the strategic economic development fund could be used for a 
broad spectrum of projects, noting it was leveraged to attract companies to Phoenix 
rather than other large cities and reimbursement of would occur after a company had 
met the required City standards. 
Councilwoman Ansari asked if Council could increase the reoccurring $1.2 million 
funding in the strategic economic development fund.  
Ms. Mackay replied an increase to the fund would have a positive impact on strong job 
creation within the City. 
Vice Mayor Pastor asked staff to elaborate on accountability metrics for companies 
receiving funding from the strategic economic development fund.  
Ms. Mackay replied the City conducts an audit of each company receiving funds and 
they would not be reimbursed if they fell below the City’s standards. She reiterated each 
company must meet the requirements for wage threshold, jobs created, and the 
business must remain in the City. 
Mr. Keating continued the staff presentation and discussed the Downtown Community 
Reinvestment Fund (DCRF). He stated DCRF used lease payments from economic 
development projects to create new projects and programs. Mr. Keating noted the 
DCRF was created in 1989 and could be used for debt services, public infrastructure 
projects, land acquisition, and more.

Councilwoman Ansari asked how the recently acquired McKinley lot was unique as it 
relates to DCRF. 
Ms. Mackay replied staff would propose the McKinley lot be a land lease Request for 
Proposal (RFP) focused on affordable housing. She noted the DCRF fund could be 
used to create public infrastructure, bus shelters, water and sewer lines and, in the past, 
the fund has been used to create community ground floor spaces in the public domain.  
Councilwoman Ansari asked staff to describe the range of DCRF financial support. 
Ms. Mackay stated the fund could be used for a large variety of economic development 
plans, from small beautification projects to larger construction projects, such as the 
development of the Arizona State University School of Law. 
Vice Mayor Pastor asked staff to explain the uses of City property lease payments 
related to the DCRF. 
Ms. Mackay replied the City receives payments from leased City property and most of 
the fund was made up of lease payments the City receives from Government Property 
Lease Excise Tax (GPLET). She noted the property owner would pay a lease rate on 
the property which would fund economic development efforts like beautification for the 
broader community. 
Vice Mayor Pastor asked staff to explain GPLET. 
Ms. Mackay explained GPLET became an economic development tool for cities in 
Arizona in 1996 and said it allowed the City to collect tax from private entities that 
leased government property. Ms. Mackay said GPLET could only be used to tax non-
government uses on government property and served as an economic redevelopment 
tool that facilitated revitalization through reductions or abatement of the excise tax. 
Councilwoman Stark asked how the City offsets the impact of GPLET to Phoenix school 
districts.  
Ms. Mackay replied the City required developers utilizing GPLET make a private 
transaction with the affected school district to ensure there were no impacts to school 
funding. She noted CED creates an impact analysis for the school district and developer 
to make an agreement.  
Vice Mayor Pastor described her conversations with various school board members 
who noted a delay of when the school would receive funds from developers utilizing 
GPLET. She stated the redevelopment of Downtown Phoenix has caused a decline in 
Phoenix school district enrollment. Vice Mayor Pastor noted there were two Phoenix 
elementary schools being closed in the downtown area due to development.

Ms. Mackay replied staff would return with a department policy for GPLET usage, 
including two key policies for the Phoenix Elementary School District. 
Ms. Mackay spoke about the Central Business District (CBD) economic development 
tool, which requires developers to improve the value of a property or site by 100%, and 
said the City may abate excise tax for up to eight years or apply a tax for 25 years. 
Councilwoman Stark asked staff to leverage economic development tools and work with 
developers to create affordable housing units in the Downtown Phoenix area. She noted 
there were over 130 tax increment financing (TIF) projects focused on affordable 
housing in the Chicago area and encouraged staff to develop similar strategies. 
Vice Mayor Pastor stated strategies for affordable housing projects should be 100% 
affordable housing. 
Ms. Mackay replied that staff agreed the City could leverage the tool for 100% 
affordable housing projects. She noted that some developers focused on affordable 
housing would not benefit from GPLET if they were classified as a non-profit, as non-
profits do not pay property taxes, and staff would need to identify other strategies to 
encourage affordable housing development. 
Councilwoman Stark made additional comments about the benefits of affordable 
housing units in the Chicago area and asked staff to prioritize affordable housing 
projects for families.  
Vice Mayor Pastor stated private developers may partner with non-profit organizations 
to avoid paying property taxes. She said this would be an issue for future subcommittee 
meetings. 
Councilwoman Ansari noted her support for affordable housing units in the Downtown 
Phoenix area and spoke about the rising costs for housing in the City. She discussed 
her excitement for GPLET expanding the downtown housing and retail areas. 
Ms. Mackay replied staff would address this issue in department policies and would 
return to a future subcommittee to speak to this issue. 
Vice Mayor Pastor asked staff to explain how the DCRF was connected to the GPLET. 
Ms. Mackay replied developers utilizing DCRF were required to pay a lease payment to 
the City of Phoenix rather than a property tax. She noted this was an annual 
requirement. 
Vice Mayor Pastor asked staff to discuss the GPLET process. 
Ms. Mackay described the GPLET process and noted that developers have an eight-
year abatement process and staff would negotiate an annual lease payment with the 
developer. She noted the annual lease payment was approved by Council.

Ms. Mackay stated that once the property transfers to City ownership, developers would 
continue to make an annual payment to the City, as the developer would be leasing the 
property from the City.   
Vice Mayor Pastor reiterated the process Ms. Mackay outlined.  
Mr. Keating continued the staff presentation and spoke about historic and heritage 
preservation tools, including four key historic buildings staff redesignated as small 
businesses and restaurants through historic preservation grant funding.   
Ms. Mackay stated CED staff worked closely with the Planning and Development 
Department on historic preservation and noted the importance of maintaining historic 
properties.  
Deputy City Manager Stephenson noted historic buildings were important to attract 
small businesses in the Roosevelt corridor and throughout other areas in the City.  
Councilwoman Ansari asked if the City was putting enough effort into preserving historic 
properties.  
Mr. Stephenson replied staff could return with additional information on what a robust 
historic preservation effort would consist of and how the City could remain competitive 
in attracting small businesses. 
Ms. Mackay noted DCRF grant funds range from $50,000 to $200,000 a year to 
preserve two to three buildings each year. She stated the DCRF could also utilize 
$500,000 to protect a large historic building if needed. Ms. Mackay said CED budgets 
$300,000 in downtown reinvestment funds to preserve historic buildings and noted there 
was a total opportunity for $800,000 in funding.  
Councilwoman Ansari asked how staff worked with small businesses to locate them in 
historic buildings. 
Ms. Mackay replied small businesses would approach CED regarding historic buildings. 
She noted the department would connect with a developer to assist in the remodel of 
the historic building and then accept the tenant that first approached the department. 
Ms. Mackey stated the Office of Customer Advocacy in the Planning and Development 
Department has helped potential small businesses with creative solutions in historic and 
heritage preservation. 
Councilwoman Ansari reiterated the need to preserve historic and heritage buildings to 
attract small businesses. 
Mr. Stephenson noted there were additional historic preservation funds in the approved 
budget and preservation projects related to the General Obligation (GO) Bond program.

Councilwoman Stark mentioned the GO Bond subcommittee related to historic 
preservation and noted the importance of focusing on historic preservation throughout 
the City.  
Ms. Mackay spoke about the sports facility fund, which was established in 1989 to fund 
debt service and other costs related to sporting arenas and was generated by taxes on 
hotel, motel, and car rentals. She noted this fund usually pays for debt service related to 
sporting arena renovations and act as City renewal and replacement contributions.  
Ms. Mackay spoke about the final economic tool, infrastructure investments, which allow 
the developer to build infrastructure for a project and be reimbursed by the City. She 
said reimbursements were funded by tax revenues generated from the project, the 
general fund, or streets and water capital improvement projects.  
Vice Mayor Pastor asked if the City utilized the infrastructure investments program for 
the construction of the Taiwan Semiconductor Manufacturing Company (TSMC) facility.  
Ms. Mackay replied the City did not utilize the infrastructure investments program for the 
construction of TSMC because the Council had voted to provide $205 million to build 
the infrastructure before the construction of TSMC. 
Vice Mayor Pastor asked for additional information related to the economic tools. 
Ms. Mackay replied the department could provide a one-page informational sheet for 
each economic tool. 
 
NO CALL TO THE PUBLIC 
 
FUTURE AGENDA ITEMS 
Vice Mayor Pastor requested the Community and Economic Development staff return to 
the next Subcommittee meeting to discuss business attraction and water conservation. 
 
ADJOURNMENT 
Vice Mayor Pastor adjourned the meeting at 11:01 a.m. 
 
Respectfully submitted, 
 
Cooper Payne 
Management Intern