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OFF-LIST TRACT: CENSUS TRACT 3184 Census Tract 3184, an existing Opportunity Zone, is more broadly located between McKellips Road on the north, Evergreen Road on the east, University Drive on the south, and Rural Road on the west (see map below). This tract presents a unique case in which standard eligibility metrics, particularly the purported median family income, do not accurately reflect the tract's underlying demographic and economic conditions. The tract’s unusually high ratio of households to families, combined with a limited residential and substantial nonresidential land uses, results in a small, potentially unrepresentative sample that drives family income estimates. This is further evidenced by the exceptionally large margin of error for median family income in the tract, which calls into question its reliability as a basis for exclusion. In addition, the built environment of Census Tract 3184 is characterized by three distinct areas: North Tempe, the Arizona State University Novus Innovation Corridor, and the Smith Innovation Hub. Each of these areas is at a different stage of evolution, but collectively reflects the tract’s substantial redevelopment opportunity. Altogether, these factors suggest that the tract’s apparent ineligibility is due to statistical inaccuracies rather than actual economic conditions, and that it remains an appropriate candidate for Opportunity Zone designation given its undeveloped character and significant potential for catalytic investment. The following sections of this report provide more detail on the demographic characteristics of Census Tract 3184, as well as the tract's current redevelopment pipeline. 84thiSt Uoop 202 — ~*f ElUniversity,Dr THINKTEMPE.COM 12 DEMOGRAPHICS Census Tract 3184 is defined by a unique and highly dynamic population shaped largely by its proximity to Arizona State University. The tract is home to a significant concentration of students, young professionals, and other non-family households, resulting in a demographic profile that differs substantially from more traditional residential areas. Despite being one of the largest tracts geographically in the city, Census Tract 3184 is home to only 1,024 families with an average family size of 3.27.1 This is significantly disproportionate to the total number of households (2,482), indicating that the majority of residents in the tract live in non-family arrangements, such as single-person households or shared housing (roommates). Over time, this trend has intensified, as university-adjacent neighborhoods have seen increasing renter occupancy, smaller household sizes, and higher population turnover. These characteristics create a population base that is younger, more transient, and more economically variable than typical census tracts, complicating the use of standard income metrics to assess economic conditions. The 2024 5-Year American Community Survey data, which is used exclusively to determine Opportunity Zone eligibility, does not provide an accurate or reliable representation of the economic conditions of Census Tract 3184. The reported median family? income of $100,750 is accompanied by an exceptionally large margin of error (+$59,941), indicating a high degree of statistical uncertainty.° This level of variability significantly limits the usefulness of the estimate for policy decisions, as the true value could reasonably fall within a range that meets eligibility thresholds. Additionally, the median family income in Census Tract 3184 has dramatically increased from $48,635 in the 2015 5-Year American Community Survey (used for the original Opportunity Zone designation). While the tract experienced an increase in total housing units, the scale and type of development, including largely multifamily and renter-oriented, do not align with the magnitude of change observed in median family income. These discrepancies, combined with significant margins of error, indicate that this increase is more likely attributable to changes in a small and unrepresentative sample of households, rather than a broad-based improvement in underlying economic conditions. Land use patterns further exacerbate these data limitations. Census Tract 3184 contains substantial nonresidential and institutional land, including university-related uses and large redevelopment areas, which constrain the size and distribution of the residential population. With relatively few housing units compared to the overall land area, income metrics are derived from a small population, making them highly sensitive to outliers and less indicative of broader conditions. Over time, while adjacent areas have seen more consistent residential growth, Census Tract 3184 has remained in a state of transition, with significant portions of land yet to be developed. In summary, these factors demonstrate that the 2024 5- Year American Community Survey data, particularly median family income, does not accurately reflect the tract’s economic conditions. Reliance on these figures alone would overlook a tract that is well aligned with the intent and objectives of Opportunity Zone designation. 1 According to 2024 American Community Survey 5-Year Estimates. ? The U.S. Census defines “Family” as “a group of two people or more (one of whom is the householder) related by birth, marriage, or adoption and residing together.” 3 For purposes of comparison, the median family income margin of error for Census Tract 3188 is only $19,895. THINKTEMPE.COM 13 REDEVELOPMENT PIPELINE As discussed above, Census Tract 3184 comprises three distinct redevelopment areas: North Tempe, the Arizona State University Novus Innovation Corridor, and the Smith Innovation Hub. NORTH TEMPE North Tempe has historically developed as a transitional area north of Arizona State University and Tempe Town Lake, characterized by a mix of older multifamily properties, small-scale commercial uses, and areas of underutilized infill sites. Although the area has benefited from its proximity to Downtown Tempe, much of North Tempe has remained fragmented and has not experienced the same level of coordinated reinvestment as surrounding areas. In recent years, however, North Tempe has begun to experience a measurable uptick in redevelopment activity and reinvestment. The City itself has taken a more proactive role in shaping the area’s transition, including new streetscape improvements, major infrastructure upgrades, and redevelopment policy changes. In 2024, the City also acquired a shopping center, anchored by Food City, at the intersection of Scottsdale and McKellips Road for future redevelopment. These public investments also translate into new private redevelopment activity and reinvestment. Currently, there are an estimated six projects in various stages of planning or development within North Tempe alone. In addition, the county island in North Tempe presents a significant future redevelopment opportunity. Characterized by a mix of aging industrial and underutilized properties, as well as inconsistent infrastructure typical of unincorporated areas, the county island presents both challenges and opportunities for future redevelopment. Its proximity to major employment centers and transit corridors positions it well for future transformation into a more cohesive, mixed-use environment. Notably, the Banyan North Tempe project in this area successfully leveraged Opportunity Zone funding under the original program, demonstrating the area’s ability to attract private investment and deliver new housing opportunities. Retaining this existing Opportunity Zone designation would help to support ongoing and future redevelopment efforts in a part of Tempe that stands to benefit from continued, targeted reinvestment. NOVUS INNOVATION CORRIDOR The Arizona State University Novus Innovation Corridor represents one of the most ambitious long-term redevelopment efforts in Tempe, encompassing land historically associated with Arizona State University’s athletic facilities and related uses. Through a public-private partnership, Arizona State University has developed a vision for the Novus Innovation Corridor as a premier mixed-use innovation district that integrates office, residential, hospitality, and research space in a highly connected, transit- and pedestrian- oriented environment. Overall, the Novus Innovation Corridor encompasses approximately 355 acres and is planned to include up to 10 million square feet of development at full buildout. Upon completion, the Novus Innovation Corridor is anticipated to support 34,000 new jobs and 5,400 new residents. Several major components have already been completed, including Marina Heights, State Farm’s regional campus totaling approximately 2 million square feet of office space, multiple Class A office buildings, multifamily residential projects, such as The Mira, and supporting retail amenities. Despite this progress, a substantial portion of the corridor remains undeveloped. These ongoing redevelopment opportunities highlight both the momentum and the incompleteness of the district, reinforcing the need for continued investment to realize its full vision as a dense, transit-oriented innovation hub. Opportunity Zone designation would support the continued buildout of the Novus Innovation Corridor by helping to attract long-term capital needed to deliver large-scale, mixed-use THINKTEMPE.COM 14 projects over the next 10 years. For more information about the Novus Innovation Corridor and the potential impact of Opportunity Zone designation, please see the information prepared by Arizona State University and provided in Appendix B. cath Lyne nif a [irae su NVS! hi es Ok ee SMITH INNOVATION HUB The Smith Innovation Hub is approximately 302 acres, and has historically functioned as an industrial and service-oriented part of Tempe, with a concentration of auto repair shops, contractors, warehouse/distribution users, and other locally owned businesses. Despite its strategic location near the Loop 202 and Arizona State University, the area generally remains characterized by low-intensity development, aging building stock, and a high share of vacant or underutilized parcels. However, in recent years, the City of Tempe has taken a more proactive role in guiding the area’s transition, including advancing an Innovation Hub initiative to enhance key employment corridors and promote new investment, job creation, and placemaking that attract and retain a quality workforce. Public investments, such as the streetscape improvements along Smith Road that were recently completed by the City, also enhance overall neighborhood connectivity and create a more attractive environment for private investment. These past efforts have been specifically intended to encourage reinvestment and support the evolution of the area into a dynamic hub for advanced manufacturing, logistics, construction, and mixed- use development. THINKTEMPE.COM 15 Continued Opportunity Zone designation in this area would be particularly impactful, not only by supporting new redevelopment, but also by enabling direct investment into existing operating businesses. Home to over 230 companies and 4,700 employees, the Smith Innovation District offers unmatched regional access and business opportunities. Opportunity Zone designation creates a pathway to provide growth capital for locally owned firms, support business expansion, and facilitate the modernization of existing industrial and commercial spaces. Enclosed with these materials is a letter of support from the Tempe Chamber of Commerce describing the potential impact of Opportunity Zone designation on existing Tempe businesses. Given the combination of active small businesses, public sector planning efforts, and early- stage redevelopment activity, the Smith Innovation Hub is a strong candidate for Opportunity Zone investment. CONCLUSION Census Tract 3184 represents a clear and compelling candidate for its continued participation in the Opportunity Zone program. As described in more detail, the currently available data, particularly median family income, fails to accurately reflect the tract’s reality due to its unusually high margin of error, disproportionate share of non-family households, and a young, student-influenced population shaped by proximity to Arizona State University. At the same time, land use patterns and current redevelopment trends reveal a tract defined by its significant redevelopment potential across North Tempe, the Arizona State University Novus Innovation Corridor, and the Smith Innovation Hub. With an active but incomplete pipeline of projects, substantial vacant and transitional land, and ongoing public-sector efforts to encourage reinvestment, the tract aligns closely with the intent of the Opportunity Zone program. THINKTEMPE.COM 16