Central Business District Community Engagement

The City of Tucson Central Business District (CBD), first adopted in 2012, was renewed by the Mayor and Council in September 2020 for an additional 10 years. The CBD designation enables the City to use the Government Property Lease Excise Tax (GPLET) as an incentive to encourage quality redevelopment downtown.  This Spring, the Mayor and Council will determine the future of the CBD and how best to use GPLET as a tool to accomplish community goals. 

The City’s earnest intention is to engage the community, with its rich and diverse perspectives, in the process. To that end, the Mayor and Council and the Office of Economic Initiatives hosted a series of seven virtual meetings to engage the community in co-creating a shared vision for the future of the CBD. Each meeting was recorded, and can be viewed using the links below.

Nearly 700 Tucsonans completed a brief survey to share their ideas. The survey results will help inform City Council deliberations regarding the future of the CBD. Click the Storyboard link above to view the full survey results.

Frequently Asked Questions

Browse through these FAQs to find answers to commonly raised questions, and links to additional information.

FAQs will be updated by the City throughout the course of the Central Business District community engagement process.

What is the Central Business District (CBD)?

Per ARS 42-6209, “Central Business District” means a single and contiguous geographical area that is designated by Resolution of the governing body of the City.

What State statutes govern the Central Business District (CBD)?

ARS § 42-6209. Abatement of tax for government property improvements in single central business district; definition

A. A city or town may abate the tax provided for under this article for a limited period beginning when the certificate of occupancy is issued and ending eight years after the certificate of occupancy is issued on a government property improvement that is constructed either before or after July 20, 1996 and that meets the following requirements:

1. The improvement is located in a single central business district in the city or town and is subject to a lease or development agreement entered into on or after April 1, 1985.  For the purposes of this section:

(a) A city or town shall not designate more than one central business district within its corporate boundaries.

(b) A city or town shall not approve or enter into a development agreement or lease for a government property improvement within one year after the designation of the central business district in which the improvement is located.

(c) “Central business district” means a single and contiguous geographical area that is designated by resolution of the governing body of the city or town and that is geographically compact and not larger than the greatest of the existing total land area of the central business district of the city or town as of January 1, 2018, two and one-half percent of the total land area within the exterior boundaries of the city or town or nine hundred sixty acres. For the purposes of this subdivision, any central business district formed before January 1, 2018 is considered to be geographically compact. For the expanded areas of an existing central business district only and the new designation of a central business district formed on or after January 1, 2018 and for the purposes of this subdivision, “geographically compact” means a form or shape that has a length that is not more than twice its width as measured from at least four points on the exterior boundary of the expanded areas of an existing central business district or a central business district formed on or after January 1, 2018.

2. The improvement is located entirely within a slum or blighted area that is designated pursuant to title 36, chapter 12, article 3.

3. The government property improvement resulted or will result in an increase in property value of at least one hundred percent.

B. The prime lessee shall notify the county treasurer and the government lessor and apply for the abatement before the taxes under this article are due and payable in the first year after the certificate of occupancy is issued.

C. Except as provided by subsection D of this section, each lease between a prime lessee and a government lessor for which the tax is abated under this section that is entered into from and after May 31, 2010, and that does not meet the conditions provided in section 42-6203, subsection A must be approved by a simple majority vote of the governing body without using a consent calendar and shall not be approved unless:

1. The government lessor notifies the governing bodies of the county and any city, town and school district in which the government property improvement is located at least sixty days before the approval.  The notice must include the name and address of the intended prime lessee, the location and proposed use of the government property improvement and the proposed term of the lease or development agreement.

2. The government lessor determines that, within the term of the lease or development agreement, the economic and fiscal benefit to this state and the county, city or town in which the government property improvement is located will exceed the benefits received by the prime lessee as a result of the development agreement or lease on the basis of an estimate of those benefits prepared by an independent third party in a manner and method acceptable to the governing body of the government lessor.  The estimate must be provided to the government lessor and the governing bodies of the county and any city, town and school district in which the government property improvement is located at least thirty days before the vote of the governing body. A lease or development agreement between a prime lessee and a government lessor involving residential rental housing is exempt from the economic estimate analysis requirements of this paragraph.

3. The lease or development agreement provides that the government lessor may not approve an amendment to change the use of the government property improvement during the period of abatement unless:

(a) The government lessor notifies the governing bodies of the county and any city, town and school district in which the government property improvement is located at least sixty days before the approval. The notice must include the name and address of the prime lessee, the location and proposed use of the government property improvement and the remaining term of the lease or development agreement.

(b) The government lessor determines that, within the remaining term of the lease or development agreement, the economic and fiscal benefit to this state and the county, city or town in which the government property improvement is located will exceed the benefits received by the prime lessee as a result of the change in the lease or development agreement on the basis of an estimate of those benefits prepared by an independent third party in a manner and method acceptable to the governing body of the government lessor. The estimate must be provided to the government lessor and the governing bodies of the county and any city, town and school district in which the government property improvement is located at least thirty days before the vote of the governing body. A change in use under a lease or development agreement between a prime lessee and a government lessor to residential rental housing is exempt from the economic estimate analysis requirements of this subdivision.

D. Subsection C of this section does not apply if:

1. The tax is not abated under this section.

2. The government lessor is acting as a commercial landlord without a development agreement in a lease for a use ancillary to a government property improvement used for a public purpose.

E. The designation of a slum or blighted area that is originally designated from and after September 30, 2018 and in which a central business district is located automatically terminates on the tenth anniversary after the designation unless the city or town formally renews or modifies all or part of the slum or blighted area designation. The termination of a slum or blighted area designation under this subsection does not affect any existing project described in section 35-701, paragraph 7, subdivision (a), item  (ix) that is within the designated area. Before the tenth anniversary of its designation, the city or town shall review the area and, pursuant to the review, shall either renew, modify or terminate the designation. If the city or town renews or modifies the original designation, the slum or blighted area designation is subject to subsequent reviews on a ten-year cycle. If the city or town fails to renew or modify the designation, the slum or blighted area designation automatically terminates five years after the review. This subsection does not apply to leases or development agreements to lease government property if either of the following conditions is met with respect to any such excluded area:

1. The lease of the government property improvement was entered into before the termination or modification of the slum or blighted area designation.

2. A development agreement, ordinance or resolution was approved by the governing body of the government lessor before the termination or modification of the slum or blighted area designation that authorized a lease on the occurrence of specified conditions and the lease was entered into within five years after the date the development agreement was entered into or the ordinance or resolution was approved by the governing body.

F. Before October 1, 2020, each city or town shall review the designation of each slum or blighted area that was originally designated before September 30, 2018 and in which a central business district is located. All such slum or blighted areas in which a central business district is located are considered to be valid. Pursuant to the review, the city or town shall either renew, modify or terminate the designation. If the city or town renews or modifies the original designation, the slum or blighted area designation is subject to subsequent reviews on a ten-year cycle. If the city or town fails to renew or modify the designation, the slum or blighted area designation automatically terminates from and after September 30, 2025, or five years after any subsequent review. The termination of a slum or blighted area designation under this subsection does not affect:

1. Any existing project described in section 35-701, paragraph 7, subdivision (a), item (ix) that is within the designated area.

2. Any lease or development agreement to lease government property if either of the following conditions is met with respect to the slum or blighted area:

(a) The lease of the government property improvement was entered into before the termination or modification of the slum or blighted area designation.

(b) A development agreement, ordinance or resolution was approved by the governing body of the government lessor before the termination or modification of the slum or blighted area designation that authorized a lease on the occurrence of specified conditions and the lease was entered into within five years after the date the development agreement was entered into or the ordinance or resolution was approved by the governing body.

G. Notwithstanding section 42-6206, subsection C, beginning with development agreements, ordinances or resolutions to lease government property improvements approved by the governing body of the government lessor from and after December 31, 2016, the lease period for a property for which the tax is abated under this section may not exceed eight years, including any abatement period, regardless of whether the lease is transferred or conveyed to subsequent prime lessees during that period. As soon as reasonably practicable but within twelve months after the expiration date of the lease, the government lessor must convey to the current prime lessee title to the government property improvement and the underlying land. Property conveyed to the prime lessee under this subsection does not qualify for classification as class six property or for any other discounted assessment regardless of the location or condition of the property. This subsection does not apply to leases or development agreements to lease government property if either of the following occurred before January 1, 2017:

1. A corresponding resolution or ordinance for the lease or intent to lease such property subject to this section was approved by the governing body of the government lessor.

2. A proposal was submitted to the government lessor in response to a request for proposals.

When and why did the City designate a Central Business District?

The City of Tucson’s single Central Business District (CBD) was adopted by City Council Resolution 21883 on April 17, 2012. As stated in the Mayor & Council Communication dated April 3, 2012, “The City of Tucson [was] seeking to further encourage development and revitalization in the downtown area and the gateways into downtown.”

Where is the Central Business District?

A map of the adopted Central Business District is available HERE.

To see if your property is located within the CBD, click HERE.

When and why did the City renew the Central Business District designation?

The Central Business District was renewed for an additional 10 years by City Council Resolution 23246 on September 22, 2020. Per ARS § 42-6209(F), the City is required to review the Central Business District by October 1, 2020, and may either renew, modify, or terminate the designation. Approval of this Resolution allows the City to continue use of the Government Property Lease Excise Tax as an economic development tool to promote capital investment within the CBD.

Did the City comply with all statutory guidelines for creation of the Central Business District in 2012, and renewal of the designation in 2020?

Pursuant to ARS 42-6209(A), as in effect in 2012, the Central Business District was required to:

  1. Be a single and contiguous geographical area;
  2. Be designated by resolution of the Mayor and Council;
  3. Be located entirely within a slum or blighted area established pursuant to ARS 36-1471;
  4. Be geographically compact and be no larger than five per cent of the total land area of the City.
    Designation of a slum or blighted area requires a finding by the Mayor and Council at a public hearing that the proposed area meets the definition of a slum or blighted area as described in ARS 36-1471.

Pursuant to Resolution 21882, the Mayor and Council at the time found that the proposed CBD:

  1. Contained a “a predominance of buildings”; and
  2. The public health, safety or welfare “[was] threatened because of any of the following:
    1. Dilapidated, deteriorated, aging or obsolescent buildings or improvements;
    2. The inadequate provision for ventilation, light, air, sanitation or open spaces;
    3. Overcrowding;
    4. The existence of conditions that endanger life or property by fire and other causes” meeting the definition of a “slum” area in ARS 36-1471(18).

Additionally, Resolution 21882 designated a Redevelopment Area pursuant to ARS 36-1473. Resolution 21883 designated the Central Business District in the newly formed slum district, including complying with the area and contiguity requirements of ARS 42-6209. These two Resolutions, as well as the supporting exhibits and the Mayor and Council deliberations, met all the legal requirements for designating the CBD.

The Mayor and Council adopted Resolution No. 23246 on September 22, 2020, reaffirming the slum designation made under Resolution 21882 and reauthorizing and approving the Central Business District pursuant to ARS 42-6209(A).

What is the process for modification of the Central Business District?

The boundary of the Central Business District may be modified by Resolution of the City Council, provided that findings of fact are made in accordance with ARS § 36-1471, and that the proposed modification meets the geographical standards provided under ARS § 42-6209.

How does the Central Business District designation affect zoning and entitlements?

The CBD designation does not affect zoning or entitlements. It has no impact on a property owners rights to development of their property. ​Similarly, the CBD does not affect, or modify, any Historic Preservation Zone (HPZ).

Does the CBD designation mean the City is going to condemn, or otherwise acquire, my property?

No.

What is Englehorn v. Stanton?

Englehorn, et al. v. Stanton, et al., is a recent Maricopa County Superior Court case challenging a GPLET development on several grounds, including violation of the Arizona Constitution Gift Clause provision.  Judge Christopher Coury denied all of the plaintiff’s allegations except the violation of the Gift Clause provision, finding that while the development was constructed for a public purpose, under contract law principles, the consideration provided by the developer in terms of contracted-for obligations and direct benefits received, excluding indirect benefits and future City tax income, was insufficient when compared to the amount of the tax expenditures and payments made by the City to the developer.

What affect does the decision in Englehorn v. Stanton have on the City?

While the Maricopa County Superior Court decision is not legally binding on the City, the City believes that our GPLET agreements comply with Arizona Constitution and Arizona statute.  The City continually reviews its procedures and agreements to ensure such compliance.

What is the Government Property Lease Excise Tax (GPLET)?

The Government Property Lease Excise Tax (GPLET) is an alternate tax authorized by the State and paid by government entities in Arizona in lieu of property taxes on government property improvements and in certain other instances.  GPLET is set by state statute and is generally lower than local property taxes. GPLET and GPLET abatement are economic development tools available to Arizona cities to incentivize development or redevelopment in specific areas. In authorizing GPLET and GPLET abatement for private development, the State of Arizona has identified a City’s Central Business District as the area in which private property owners may apply for the GPLET or GPLET abatement.

How does GPLET and GPLET abatement work?

Arizona State statute grants the City of Tucson authority to enter into agreements where private developers transfer title to developments to the City, making them eligible for GPLET treatment for up to 25-year leases.  Additionally, the City may abate the GPLET entirely for up to eight years if a property is located within a designated Central Business District and meets other specific criteria. Together, the CBD designation and GPLET abatement tool allow the City to facilitate the development, and redevelopment, of real property in and around Downtown Tucson by providing a significant financial incentive to projects that would not be economically feasible but for the value realized through the property tax abatement.

How many GPLET agreements has the City approved?

To date, the City has entered into twenty-three GPLET agreements. You can find a spreadsheet summary of all approved GPLET projects HERE. Please also view the interactive StoryMap, which provides shows the location and images of each approved GPLET project.

Is the City obligated to offer a GPLET agreement to projects proposed in the CBD?

Use of the GPLET tool is at the absolute discretion of the Mayor & Council. If a proposed project does not meet the intent of the GPLET policy, or meet Council’s goals, the City is not obligated to offer or enter into a GPLET agreement.

How many of the approved GPLETS were by local developers?

20 of the 23 GPLET agreements approved since 2012 are with developers and/or owners based in Tucson, or in partnership with a Tucson-based entity.

How many jobs were created as a result of GPLET projects?
Project Name Project Address Permanent Jobs Construction Jobs
One East Broadway 1 E. Broadway 81 141
The Herbert 211 S. 5th Avenue 4 47
Cadence 350 E. Congress Street 100 230
AC Marriott 151 E. Broadway Blvd 219 215
Mister Car Wash 222 E.5th Street 112 33
Rialto Block 304 E. Congress 222 63
BP Annex 20 E. Congress 63 27
One West Broadway 1 W. Broadway 32 100
Gibson’s Market 11 S. 6th Avenue 75 18
Brother John’s 1801 N. Stone Avenue 41 9
The Arizona 45 N. 6th Avenue 49 30
Cirrus Visual 601 N. Stone Avenue 31 5
RiverPark Inn* 777 W. Cushing Street 34 n/a
Stone Ave. Townhomes 201 S. Stone Avenue 2 33
The Flin 100 S. Church Avenue 50 242
Mister Car Wash II 415 N. 6th Avenue 37 27
The Trinity 434 E. University Blvd 113 57
Union on 6th* 340 E. 6th Street 37 463
RendezVous Urban Flats 20 S. Stone Avenue 22 141
Tuxon 960 S. Freeway 9 27
Opus on 4th* 213 N. 4th Avenue 36 432
Fifth Avenue Partners* 127 S. 5th Avenue 4 132
Hyatt Regency Hotel* 181 W. Broadway Blvd 200 353

Please note that the GPLET is not intended as a job creation tool. The express purpose of the GPLET is to facilitate capital investment within the CBD.

Were any single-family residential homes demolished as a result of GPLET projects?

No.

Have GPLET projects contributed to gentrification of Downtown neighborhoods?

The City is conducting a research and analysis project with Dr. Gary Pivo at UArizona to address the impacts of GPLET projects in the CBD. These results will be complete in March.  Both the community meetings and the research will inform next steps and recommendations to Mayor and Council.

What is a Community Benefit Agreement (CBA)?

According to the U.S. Department of Energy Office of Economic Impact and Diversity, “A CBA is an agreement signed by community benefit groups and a developer, identifying the community benefits a developer agrees to deliver, in return for community support of the project. Community benefit groups are coalitions comprised of neighborhood associations, faith-based organizations, unions, environmental groups and other stakeholders. They represent the interests of residents who will be impacted by proposed developments. CBAs can ensure that measurable, local benefits will be given to a community. They are enforceable, legally-binding contracts for all parties that stipulate community benefits and are the direct result of substantial community input.”

How many GPLET projects have a related Community Benefit Agreement?

One. A Community Benefits Agreement relating to the “Union on 6th” project was entered into between Greystar (the developer), and the Historic Fourth Avenue Coalition. The City is not party to this agreement.