News Ticker

GPLETs Sought for Two Phoenix Downtown Towers

By Emily Gersema for The Arizona Republic

Two more retail-and-office high rises are planned for downtown Phoenix, including one for the Barron Colliers’ property near the $500 million CityScape office-and-retail complex at First and Washington streets.

The other proposed retail-and-office project is at Second Avenue and Monroe Street.

The nine-member Phoenix City Council July 10th was expected to approve the tax-relief agreements for the developments.

Barron Colliers

The council is being asked to vote to change the city’s original 2007 agreement with Barron Colliers’ limited-liability company, Phoenix CityScape Investments, for the downtown property near CityScape known as Block 23. The company wants the option to build two buildings, including a 27-story, office-and-retail complex and a smaller building with a new surface parking lot, instead of the hotel and residential project it had planned to complement CityScape.

Within the next nine years, Barron Colliers plans to build the second building, a 250,000 square-foot edifice on the south end of the property that also would have some surface parking.

Arizona cities and counties use GPLETs as an incentive to help developers lower costs so they can complete construction projects and open them for business.

Under these agreements, the cities and counties are the property owners after the development is built. The developer becomes the lessee, which allows the developer to avoid property tax.

If Barron Colliers constructs the second smaller building by June 30, 2017, the city says it would begin a separate 25-year GPLET agreement for it, starting with $50,000 in rent the first year, with rent increasing to $144,830 by the 25th year.

211 Monroe

A city agreement to spur development on another property, 211 Monroe St., near Second Avenue and Van Buren Street, was up for council approval July 10th.

211 Monroe Holdings wants to build a 21-story mixed-use office tower with 350,000 square feet of Class A office space and 900 parking spaces.

As part of the agreement with the city, 211 Monroe Holdings would pay a $10,000 deposit to the city and, by December, will enter a development agreement with the city.

The city is requiring the 211 Monroe Holdings to start construction within three years of signing the development agreement.

Also under the government-property-lease-excise-tax agreement:

The property would have no property taxes for 25 years. (When the state law passed, older agreements such as Barron Colliers’ were grandfathered in, allowing them to last up to 75 years.)

After opening the building, 211 Monroe Holdings would begin paying $10,000 in rent the first year that would increase to $150,000 in rent by the 25th year.

Sales taxes would be abated for the first eight years of the agreements.

At any time during the 25-year lease, 211 Monroe Holdings can buy the property for $50,000.

211 Monroe Holdings will commit 3,500 square feet of space to Arizona State University to be utilized as incubator space for startup businesses.

Read more at AZCentral