Downtown Phoenix Deal: $30M In Tax Breaks, 30 Workforce Units
A high-rise developer lands a deal in downtown Phoenix with millions in tax breaks. The City Council approved a plan Wednesday to bring three residential towers to 3rd and Pierce streets.
The development will go up in three phases with total capital investment expected at $174 million. But, it’s the taxes the developer won’t have to pay over a 20-year-period that caused Councilman Sal DiCiccio to vote no.
“This is why the city of Phoenix has a screwed up financial problem is that you’re giving away $30 million — $30 million — to get just a little bit of nuggets off of a table, little bit of crumbs off a table,” he said.
Supporters say without a subsidy, the project wouldn’t happen. It will include 612 luxury apartments, along with retail and mixed-use space.
Before the City Council approved the deal, Vice Mayor Laura Pastor asked about workforce housing. She wanted to know how city staff came up with 5 percent of units to be set aside at lower rates. The answer — the developer offered and that’s what staff accepted with no negotiations.
“The trend — or where it’s at — is at 15 percent,” Pastor said. “And, I made a request through staff to ask if the developer was willing to go to the standard of 15 percent. I just never got an answer.”
A developer’s representative responded that 5 percent — or 30 units — is what they can afford. The agreement also calls for the developer to provide space for entrepreneurs, nonprofits and start-ups to use at no cost during the first two years.
According to the city’s economic development office the project will generate an estimated tax revenue for all three phases of $1.7 million and create 250 construction jobs along with 50 full-time jobs.
