By Catherine Reagor for The Arizona Republic
Original headline: 2 downtown Phoenix redevelopment projects get boost
A little-known, seldom-used tax incentive is financing a pair of projects in the Valley. CSM Lodging negotiated a government property lease excise tax (GPLET) with Maricopa County for the Hilton Garden Inn and Suites (Hotel Monroe) in downtown Phoenix. In Chandler, Wood Partners is seeking to execute a GPLET with the city for its downtown apartment complex.
Hilton Garden Inn and Suites
Maricopa County agreed to work with developer CSM Lodging on tax incentives for the redevelopment of the art deco Professional Building at the southeastern corner of Central Avenue and Monroe Street.
The city of Phoenix had offered Minneapolis-based CSM a government property lease excise tax, known as a GPLET, to redevelop the property into a hotel. But Phoenix wasn’t able to complete the deal.
Wednesday, Aug. 27, the Maricopa County Board of Supervisors voted unanimously for its Stadium District to negotiate with CSM for the economic-development incentive. A GPLET allows developers to avoid paying certain property taxes through deals that title their land and buildings to a government entity with an exclusive right to lease the property back.
CSM purchased the 12-story Professional Building for $7.85M in December and plans to spend $40M renovating the long-empty building on the southeastern corner of Central Avenue and Monroe Street into a 165-room boutique hotel (AZBEX, Jul. 29, Jun. 24).
Alta Steelyard Lofts
Wood Partners is negotiating a GPLET with Chandler for the 301-unit apartment community just southeast of City Hall in the downtown area. Alta Steelyard Lofts is planned as a walkable, pedestrian friendly community (AZBEX, Jun. 21). If approved, the Chandler GPLET will cut financing and operating costs of the development, allowing Wood to offer more market-competitive rents.
When the certificate of occupancy is issued by the city, Wood Partners will deed the property to the city and then lease it back.
Read more at AZCentral