Summary:
The purpose of this item is to designate the P83 District as a Central Business District ("CBD") pursuant to A.R.S. §42-6209(A)(1). The proposed boundary of the CBD is depicted In Exhibit 1 and 2 and consistent with the P83 District which is generally bounded to the south by the Skunk Creek, to the west by the Loop 101, to the north by Bell Road and to the east by the municipal boundary at approximately 73rd Avenue.
The term CBD is typically synonymous with the commercial and business heart of a city. As the 600-acre P83 District is anchored by the Peoria Sports Complex and includes a mix of land uses including commercial, entertainment, hospitality, employment and residential, these uses are in keeping with uses found in other designated central business districts within the state and nationally.
Background
The area developed incrementally in the 1990's with the incised Skunk Creek and introduction of the Peoria Sports Complex, spring-training home of the San Diego Padres and Seattle Mariners. Large format commercial activity continued along Bell Road in proximity to the mall and commercial pads sprung up along 83rd Avenue. While this area has experienced success, it lacked center cohesion or a recognized identity. In 2010, the City Council approved the Peoria Sports Complex Urban Design Plan ("Plan") which envisioned the transformation of the area into a urban mixed-use hub replete with opportunities to live, work and play in a pedestrian-oriented format. This Plan sparked further study and investment with the identification of the P83 ("Peoria 83rd") brand for the area. The P83 brand provided an identity for the area and recognized the intent for 83rd Avenue to become a signature street in the district. The City followed with several rounds of capital improvement projects that integrated streetscape and district identity elements, bridge treatments and pedestrian connections. The focused attention on transformation has continued with discussions on placemaking and the potential Stadium Pointe development on the vacant 17-acre surface parking lot at 83rd and Mariners Way.
Central Business District
A.R.S. §42-6209(A)(1) permits a city or town to designate one (1) Central Business District within its municipal boundary. The CBD is defined as a single, contiguous and "geographically compact" area that can be no larger than 960 acres in size or 2 1/2% of the municipal boundary. With a large land base, a Peoria CBD could not exceed 960 acres. Additionally, the CBD boundary has to meet specified dimensional requirements to ensure "geographical compactness." More specifically, this means that the boundary of the CBD cannot have a length that is more than twice the width, measured at four points. The proposed CBD boundary would meet these specifications.
A benefit of designating an area as a CBD is in the realm of the use of a redevelopment financing tool known as a GPLET or Government Property Lease Excise Tax. The GPLET was established by the State of Arizona in 1996 primarily as an economic development tool to initiate development by reducing a project's operating cost by replacing the real property tax with an excise tax.
The excise tax is calculated according to the building's type of use and the gross floor area of the building. The use of the excise tax cannot continue for more than 25 years and requires that the land and improvements conveyed to a governmental entity and leased back for private use. The excise tax can be abated for the first 8 years after a certificate of occupancy on the building is issued provided the property is located within a CBD and a redevelopment area. In short, the GPLET incentivizes development by reducing developers' tax burdens by removing the incentivized project from the property tax rolls -- the eligible project can then be exempt from the excise tax for eight (8) years -- called an "abatement." By offering the incentive, a municipality expects to benefit from increased tax revenue from the development in the future.
The P83 Area
The City of Peoria owns a large portion of land in the P83 District which includes the Peoria Sports Complex, outlying parcels (e.g. Arizona Broadway Theater, 83rd Avenue offices) and the former McDuffy's. This public land base provides the opportunity for future public-private partnerships for redevelopment, like the potential Stadium Pointe project. Having the ability to utilize a GPLET provides the City with an additional redevelopment tool in a limited toolbox. To use the GPLET, the project would need to be located in a CBD and a redevelopment area. The proposed CBD is located within the Council-approved 1992 North Peoria Redevelopment Area. On a separate item, the City is asking to renew the term of the existing North Peoria Redevelopment Area for an additional ten (10) years as provided under Arizona State Statute.