Thanks to Vox for the cool graphic

Arizona's First Political Blog

E-mail Anonymous Mike at

By Anonymous Mike, pseudonymously.

This page is powered by Blogger. Isn't yours?
Sunday, February 21, 2010
GPLETS and Gravy

This is an old topic that Espresso Pundit helped to break and that I touched on eons ago but I see GPLET has emerged yet again into the news. However you won't find it in the local media, but instead have to go read about it in a Washington-based paper.

GPLET, Government Property Lease Excise Tax, is used by several cities in Arizona as an economic development tool. A developer will transfer title to a building and associated property to the local city government and the city leases the now-government property back to the developer. After a number of years (usually several decades) the title reverts back to the developer.

The advantage to the developer is that the GPLE paid to the city government is considerably smaller than what it would have paid in property taxes. The advantage to the city is that it gets the particular property developed.

So who loses?

Well you and me for one. As the report on GPLET from the Goldwater Institute makes plain, the tax burden is simply shifted to other taxpayers. Who else loses? Well for that you have to dig a little bit deeper into a story about the hotel industry in downtown Phoenix.

There are 3 major hotels downtown. One, the Shearton, is owned by the city. The second, the Wyndham, will be placed under a GPLET as part of a deal involving a major renovation.

So that leaves only 1 hotel, the Hyatt, still paying property taxes. Yet in the report, Phoenix Deputy City Manager David Krietor notes that the Hyatt receives other benefits from the City to help make up for that omission.

So there you go as long as everyone is taken care of when it comes to sweetheart tax deals, except for me and you of course. It's not the shifted tax burden that gets me, it's that losing out on city-provided goodies for downtown properties is for suckers and the politically powerless.