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Arizona cities give tax breaks to developers. Here’s how you help pay for it

Posted by   /  October 11, 2018  /  No Comments

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By Agnel Philip and Jerod MacDonald-Evoy | Arizona Republic

The cities of Phoenix and Tempe struck deals in recent decades exempting high-rise developers from millions of dollars in taxes, subsidies that added to their downtown skylines but pushed additional costs onto neighboring property owners.

As a result, the tax breaks, known as Government Property Lease Excise Tax agreements, have become a flashpoint at community gatherings, city council meetings and the Arizona Legislature over the past decade.

Supporters of this development strategy, chief among them city officials, credit it with getting projects built that otherwise would never happen — in this case, high-rises to anchor burgeoning downtowns.Those projects, once built, contribute to the growing prosperity of all property owners in the area.

Critics counter that the tax breaks have shifted additional financial burden onto other property owners and shortchanged school districts of tax revenue. And, they argue, the projects would likely have been built without incentives.

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