A massive high-rise project near downtown Phoenix’s Roosevelt Row will move forward with a tax break worth an estimated $9 million.
By a 7-2 vote, the City Council on Wednesday approved an agreement with Clark Street Holdings LLC,
to build three residential towers of 29 stories, 25 stories and 19 stories at Third and Pierce streets. Developer CA Residential plans to add 612 rental units and retail and commercial space to the area.
The developer would transfer the land to Phoenix and lease it back for up to 20 years to save money on property taxes. The controversial statewide incentive is known as a government property lease excise tax.
Councilmen Jim Waring and Sal DiCiccio voted against the proposal. No council member mentioned a recent lawsuit against Phoenix regarding use of the incentive that has stalled another high-rise project downtown.
Project includes space for artists, incubators
In addition to apartments, the developer will build 646 parking spaces and nearly 25,000 square feet of retail and mixed-use space on roughly 1.3 acres.
Three lease agreements will all include eight years without the developer paying property taxes. One tower will pay an excise tax after that. The developer will also pay $10,000 a year in lease payments to the city for each tower.
High-rise developers could not support the costly construction without help from the city, said Community and Economic Development Director Christine Mackay.
Five percent of units in the project will rent as reduced-rate workforce housing, though Vice Mayor Laura Pastor said the city needs to push for more in the future. Incubators, non-profits and artists can use half of the ground-floor space without paying rent for two years.
Is tax break a giveaway?
Council members who supported the tax break said they carefully considered the proposal, which they called an asset to downtown Phoenix. Councilman Daniel Valenzuela said the economic incentive is one tool to attract development the city wants.
“I think this is going to change the Phoenix skyline now instead of 20 years from now,” he said.
But DiCiccio called the agreement a government giveaway, especially considering where else the city could spend that money.
“It is insane to give money away when you’re broke,” he said.
Also at the meeting, a lawyer representing owners of the downtown Circles building asked the council when they could get a hearing on their request for a city tax break. Negotiations stalled last year after a surprise demolition of the historic building angered community members and the city.
Councilman Michael Nowakowski said he also wanted to hear the request at a council meeting. It’s unclear if that request will move forward.
Read or Share this story: http://azc.cc/2pEKsUr