Tucson Standard

Approximately 100 people gathered on March 1 at Capilla de Guadalupe church in Tucson to discuss the effects Government Property Lease Excise Taxes (GPLET) have on low-income neighborhoods.

The Arizona Tax Research Association said GPLETs are used to tax government properties and are based on the square footage of the building, not the value of the property. GPLETs are imposed on government properties to allow them to be leased to private business. 

At the gathering, Brian Flagg, a volunteer for Casa Maria, a soup kitchen sponsoring the event, said developers use tax incentives to build new apartment buildings in poor areas, which then increases rents in the area and forces out low-income families. 

Housing costs in general have been rising in Tucson, with the average rent increased by about 6%, Cushman & Wakefield PICOR, a real estate group, said.

Mike Czechowski, an economic quantitative project manager, said at the meeting GPLETs aren't the cause of the issue and shouldn't be blamed. 

GPLET agreements can't be entered into with a city unless having the agreement would generate more sales than a developer would save in eight years. 

Developers also have to improve the property values by 100% to enter into a GPLET agreement, Czechowski said. This means the majority of properties that qualify for the agreements are vacant buildings and parking lots - properties that weren't generating any taxes or revenue.

He also said that having tax incentives are a crucial part of staying competitive with Phoenix. 

“We’re still a secondary market,” Czechowski told Arizona Public Media. “And I’m certain that a handful of these projects would not be in place if not for the incentives.”

But the downtown's growth isn't always viewed as a good thing, especially since rents are the highest in the city there. Some residents are afraid these high rents will spread into neighboring residential areas. 

During the gathering, Cesar Aguirre, a Casa Maria volunteer, said he moved out of Tucson's south side, because there was nowhere he could afford to live. 

“[Gentrification] is real. It’s happening. And it’s moving this way,” he said in Arizona Public Media. 

Some activists said the government should require developers to invest in more affordable housing. 

“By working together with the community, the developer will get support from the community to pursue these GPLETs. So it’s meant to be a two-way street,” Mike Peel with Tucson Local First said in Arizona Public Media. 

During the meeting, the group decided a community benefits agreement should be part of all GPLET deals. 

But at the meeting, Rita Rogers, a South Tucson Council member, said requiring too much will keep developers away. 

"No one’s going to want to get in here if you say, ‘Hey, if you want to come in here, I want you to give a 75 cent ice cream cone to every kid in Ochoa [Community School], or else.’ They’re not going to come,” Rogers said.