Two projects to renovate blighted downtown buildings are moving to the next phase in a process to win city tax incentives.
Developers Don Bourn and Marcel Dabdoub applied for the incentives for their redevelopment projects. The City Council signed off on those applications Tuesday, so now the projects must undergo an independent financial analysis, which is paid for by the developers at a cost of $5,000 each, to prove they meet the requirements for the incentive program.
The analyses must show the benefit to the government is greater than the benefit received by the developer. Once the analyses are complete, the projects will return to the City Council for final approval.
Bournβs project is a $3 million renovation of 20 E. Congress St., which will become his companyβs headquarters and a new restaurant.
Dabdoubβs project is a $4.8 million job to turn the historic Arizona Hotel, located across the street from the Ronstadt Transit Center, into offices, apartments and a restaurant.
βIβm really happy to see the investment of local families and local developers in our downtown,β said Council Member Regina Romero. ββ¦ It really gives it a Tucson flavor.β
The Government Property Lease Excise Tax β or GPLET β incentive program βis one of our most potent incentives as it eliminates all property taxes for a period of up to eight years,β said city economic development specialist Camila Bekat.
Council Member Karin Uhlich asked why Bournβs project isnβt included in a package with his other, adjacent projects on the Thrifty Block, which are an apartment complex and a renovation of the historic Indian Trading Post building.
The Bourn properties have been the subject of much criticism, because he bought the property for $100 but until now no projects were under way. Uhlich said that should have been overtly addressed. βWe canβt ignore that history,β she said.
Bourn CFO Toufic Abi-Aad told the council the developerβs lender made it a requirement for financing that the company apply for the GPLET, which is why the 20 E. Congress project is applying for the incentive separately from the other projects. When the other projects are ready, Bourn will apply for GPLETs for them, too.
βWe are working in earnest on the eventual development of the adjacent lot and the Indian Trading Post building,β he said.
Mayor Jonathan Rothschild noted Bourn must work quickly on the apartment project because the terms of a settlement agreement with Rio Nuevo say the next deadline is in October. That project is βon a fuse thatβs running,β he said.
