EXHIBIT C DTA EXPLANATION OF ASSESSMENT FORMULA 2026.DOCX

page 1
Exhibit C to Resolution No. R2026.67
Enhanced Services District Assessment Formula
The Enhanced Services district was formed in 1993 to manage the development of downtown and 
improve the quality of the environment. This document describes the formulas for the Enhanced 
Services District assessments. This particular formula was established in 2007 and CPI adjustments 
are made annually. Rates included reflect the 2026/2027 CPI adjustments.
The formula and parameters were developed as follows:
1. The improvement district was adopted in perpetuity with an annual review regarding its 
continued operation.
2. The assessment rates for all categories will be modified annually based on the CPI as reported 
by the United States Bureau of Labor Statistics, West Urban region, 12-month percent change 
for December.
3. There are no minimum or maximum assessment amounts set. Assessments range based on the 
specific criteria described below.
The assessment rate structure is based upon three criteria:
1. Basic Land Rate, Zone 1, 2, & 3
2. Building Size, Floor 1, Floor 2, etc.
3. Building Use Rate by Business Type
These three criteria provide several rate category combinations, allowing each property assessment 
to be individually calculated based upon its zone, building use and size characteristics and the 
relationships between these three criteria.  The three-rate formula will be applied to each parcel of 
assessable, non-exempt property and its building. 
Existing single family residences and residential structures of four units or less are exempt by state 
law and will not be assessed. Similarly, property owned by the federal, city, county and state 
governments is exempt by law from assessment. Finally, although religious institutions are not 
exempt by law, the Advisory Committee has recommended that each such property be exempted from 
the assessment so long as the property is used for religious purposes. Assessments will be levied on 
properties owned by religious institutions that are utilized for commercial purposes.
Because parking structures are a major benefit to all downtown businesses, the formula treats them 
specially. The formula provides that the parcel size of a parking structure be multiplied by the use 
rate, with the addition of the total square feet of the parking structure, excluding the ground level.

Downtown Tempe Enhanced Services District - Assessment Formula      
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Exhibit C to Resolution No. R2026.67
The basic rate assumes a level of overall benefits derived from being within the 
Downtown special improvement district; e.g., enhanced business development, liaison services, 
marketing and promotion of the district, increased maintenance and landscape improvements, 
increased property values, advocacy on policy issues, merchant relations, land planning, etc. The 
basic rate is then divided into three zones:
A. Zone Rates: There are three zones (refer to map section 1) with annual zone rates as follows:
Zone 1 = $.086560 per square foot
Zone 2 = $.069248 per square foot
Zone 3 = $.051936 per square foot
Zone 1 receives the greatest amount of foot traffic and pedestrian density as well as increased 
promotional activities.
Zone 2 receives basic services and is seeing an annual increase in pedestrian traffic that is just below 
what is found in Zone 1.
Zone 3 includes more open space and less pedestrian traffic but will continue to see an increase with 
future density and development.
B. Building Area: The building area is the total number of all floors measured in square feet. 
Businesses on the first floor are assumed to have the advantage of increased accessibility and 
exposure to both pedestrian and vehicular traffic. Since each floor above (or below) the ground 
level has slightly less exposure, each floor is assessed progressively less. This methodology 
assumes that all businesses located on the third floor or higher will be assessed a flat $.065655 
per square foot for their floor/size assessment ratio. The assessment per floor is as follows:
Basement
$.086560 per Square Foot
1st Floor
$.119611 per Square Foot
2nd Floor
$.086560 per Square Foot
3rd Floor and above
$.069248 per Square Foot
C. Building Use Rate by Business Type: One of the most important dimensions of this assessment 
formula is the building use rate categories. These building use criteria add a considerable amount 
of specificity and equity to the overall formula since they are tailored to each business’ 
circumstance.
Category 1 – Restaurants and Bars – 
$0.173121 per square foot
Category 2 – Retail (including commercial banks and theatres) – 
$0.119611 per square foot
Category 3 – Office and Service-Related Businesses – 
$0.069248 per square foot
Category 4 – Government / Non-Profit / Parking – 
$0.069248 per square foot
Category 5 – Industrial / Warehouses – 
$0.034624 per square foot
Category 6 – Hotels & Motels – 
$51.936154 per guest room
Category 7 – Apartment complexes with over four units – 
$75.543497 per unit

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Exhibit C to Resolution No. R2026.67
Assessment Calculation Examples
Example 1: A bank in zone 1 with 61,000 square feet of land; one single story building with 15,000 square feet.
STEP 1 – LAND
Zone 1 rate of 
$0.086560 X 61,000 sf
=
$5,280.16
+
STEP 2 – BUILDING
First floor rate of 
$0.119611 X 15,000 sf
=
$1,794.17
+
STEP 3 – USE
Category 2 use rate of 
$0.119611 X 15,000 sf
=
$1,794.17
=
TOTAL 
ASSESSMENT
$8,868.50
Example 2: A building in zone 2 has retail shops on the first and second floors and offices on the third and fourth 
floors. The four-story building consists of 100,000 square feet with 25,000 square feet per floor and sits on 105,000 
square feet of land.
STEP 1 – LAND
Zone 2 rate of 
$0.069248 X 105,000 sf
=
$7,271.04
+
STEP 2 – BUILDING
1st Floor - $0.119611 X 25,000 = $2,990.28
2nd Floor - $0.086560 X 25,000 = $2,164.00
3rd Floor - $0.069248 X 25,000 = $1,731.20
4th Floor - $0.069248 X 25,000 = $1,731.20
=
$8,616.68
+
STEP 3 – USE
1st Flr Retail=$0.119611 X 25,000=$2,990.28
 2nd Flr Retail=$0.119611 X 25,000=2,990.28
3rd Flr Office=$0.069248 X 25,000=$1,731.20
4th Flr Office=$0.069248 X 25,000=$1,731.20
=
$9,442.96
TOTAL ASSESSMENT = $25,330.68
Example 3:  An Apartment Building in zone 2 has retail shops on the first floor and 285 apartments on 10 floors 
along with 150,000 sq. ft. of parking. The 14-story building consists of 50,000 square feet of first floor retail space 
and sits on 75,000 square feet of land.
STEP 1 – LAND
Zone 2 rate of 
$0.069248 X 75,000sf
=
$5,193.60
+
STEP 2 – BUILDING
1st Floor rate of $0.119611 X 50,000 sf
=
$5,980.55
+
STEP 3 – USE
Apartment Rate Per Unit =$75.543497 X 285=$21,529.90
Parking Rate = $0.069248 X 150,000 = $10,387.20
First Floor Retail = $0.119611 X 50,000=$5,980.55
=
$37,897.65
TOTAL ASSESSMENT = $49,071.80