Downtown Bourn project gets city incentive worth $748K

The BP Annex as it looked on May 13. The city awarded developer Bourn Companies an eight-year break on its city property taxes for the project.

The Tucson City Council approved a tax-incentive agreement valued at about $748,000 for the developer of a downtown property on Tuesday.

The agreement will give Bourn Companies, the developer of the BP Annex, at 20 E. Congress St., an eight-year break on its city property taxes, after an economic analysis determined the incentive would benefit the city.

The tax break is part of the city’s government-property lease excise tax — or GPLET — incentive program.

Don Bourn, the developer, said the incentive will help attract potential tenants to the building, which is undergoing a $3 million renovation.

“It’s critical to make the economics of the building work for the amount of investments we had to put into it,” Bourn said.

The BP Annex, located next to the Chase Bank building, includes three floors and a basement, and has about 19,300 square feet of space. Bourn said he expects the building’s renovation to be complete within the next three to six months. It is expected to house a restaurant, retail businesses and office space. Bourn Companies already moved its headquarters into the building.

No restaurant has yet committed to moving into the ground-floor space, Bourn said.

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In order for a property to be approved for a GPLET incentive, an independent economic analysis must show that the benefits to the city in terms of tax revenue would be greater than the benefit received by the developer, said Camila Bekat, a city economic development specialist.

The project would generate about $1.1 million in direct tax revenue and $2.5 million in indirect tax revenue over the next eight years, according to the analysis.

The approval from the City Council is the final step of a three-part process for approving a GPLET incentive deal.

The first step, an application for the incentive, was approved by the Council in May. That was followed by the independent economic analysis, which costs a developer $5,000 to perform, Bekat said.

Councilman Steve Kozachik, whose ward contains the building, said the incentives are critical to downtown redevelopment efforts.

“Right now the real estate market still hasn’t improved to where it needs to be in terms of not needing these kinds of incentives to develop,” Kozachik said.

He said many downtown redevelopment projects wouldn’t move forward without the incentives.