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Arizona Limits Incentives

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A law that limits city tax incentives is drawing praise from some local officials while others see loopholes, inequity and unintended consequences.

Gov. Jane Napolitano on Monday signed into law House Bill 2515, which prevents Maricopa County cities from giving millions of dollars of tax rebates to developers.

The incentives had spiraled in recent years, creating border wars between adjacent cities over which could give away the most to attract the best retailers and car dealers, and the coveted sales tax revenues from those businesses.

Among the latest, and biggest, rebates were Phoenix's $100 million for the CityNorth project and Surprise's offering of $240 million for the Prasada retail development.

Mayors Phil Gordon of Phoenix and Hugh Hallman of Tempe said Tuesday that cities were unable to halt incentives on their own.

"Getting the first step done to stop the cities from being pitted against one another by retailers and developers is a really great first step," Hallman said. "We should all be working (together) regionally."

More here.

(Via Retail Economic Development Blog.)

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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