Government Property Lease Excise Tax (GPLET)

What is GPLET?

Arizona State statute grants the City of Tucson authority to abate property tax for up to eight years if a property is located within a designated Central Business District and meets other specific criteria. This tool is commonly referred to as the GPLET (locally pronounced Gee-plet). On April 17, 2012, Mayor and Council adopted Tucson’s Central Business District by Resolution 21883. This Resolution allows 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.

The City is required to review the CBD by October 1, 2020, and either renew, modify, or terminate the designation. Mayor and Council previously provided direction to expand the boundary of the existing CBD, to the extent allowed by statute. Click here to learn about the Proposed Renewal and Expansion of the Central Business District.

The Government Property Lease Excise Tax (GPLET) incentive has been an invaluable tool for the revitalization of downtown. To date, the City has entered into twenty-five GPLET agreements. The projected capital investment from approved GPLET projects in 2019 alone was more than $300 million. These projects have created new market-rate and affordable housing, new retail space, new office space, and revitalized blighted buildings to generate jobs for the community, and tax revenue for the City and other taxing jurisdictions. The GPLET incentive tool has also been used to bring new life to outdated, poorly maintained hotels that were hotspots for crime, and now contribute to the economic growth of downtown Tucson.

Check out an interactive map that provides details on the successful use of the GPLET tool.

How does the GPLET work?

The specific criteria required for use of the GPLET are:

  • Property is located within a Central Business District that has been in effect for more than one year;
  • Independent analysis determines that the economic and fiscal benefit to government (all taxing entities) exceed the benefits received by the private lessee;
  • Improvements result in an increase in property value of at least 100%; and
  • City must take ownership of the property.

In practice, a GPLET project is initiated when a property owner approaches the City’s Office of Economic Initiatives with a proposed real estate development project. If the proposed project appears to align with the City’s economic development objectives, the owner is encouraged to submit a formal application.

Step 1: Application Submittal (~30 – 45 days)

  1. Application submitted to Economic Initiatives.
  2. GPLET requirements are verified by staff (eg. Property is within Central Business District, data required to conduct economic analysis is included, meets capital investment threshold).
  3. Applicant required to conduct neighborhood engagement meeting.
  4. 1st Mayor & Council – Study Session – Present proposed project.
  5. If approved, collect $5,000 application fee and request third-party independent economic analysis.

Step 2: Independent Economic Analysis (~30 – 45 days)

  1. Staff review of third-party economic analysis, prepare M&C Communication.
  2. 2nd Mayor and Council – Study Session – Present independent economic analysis.
  3. If approved, provide 60-day notice to all taxing jurisdictions per state statute.

Step 3: M&C Approval (~60 – 75 days)

  1. Final coordination/negotiation with applicant, prepare M&C Communication.
  2. 3rd Mayor and Council – Regular Agenda – Present GPLET lease agreement for M&C consideration and final approval.
  3. Applicant may proceed with project as proposed.
  4. Approved lease agreement is not executed until project is complete and CofO has been issued.