Economic Opportunities May Lie Ahead for the City of South Tucson

At the February 25, 2019 South Tucson City Council meeting former city manager Benny Young, in coordination with City Planner Mick Jensen, presented a proposed 2019 update to the 2015 South Tucson Economic Vitality Plan. The old 2015 plan aimed for developing the central business district’s key corridors of Fourth Avenue, Sixth Avenue and Twenty Ninth Street. “I still think those are worthy endeavors, but it may be time to strengthen the efforts,” Young said.

Former South Tucson city manager Benny Young presents economic opportunities to Mayor and Council at the February 25, 2019 meeting.

Young’s presentation outlined some new objectives including expanding the currently designated GPLET area, or Government Property Lease Excise Tax area, and also acting on the federal ‘Opportunity Zone’ designation, a product of President Trump’s Tax Cuts and Jobs Act and Governor Doug Ducey’s state-level designations, to entice would-be investors.

Young highlighted the development currently taking place to the east of South Tucson at, “U of A South,” Young quipped, and further development of Kino Sports Complex South as evidence of the opportunities that lie ahead for South Tucson.

The GPLET is a redevelopment tool designed to reduce operating costs by replacing the existing property tax with an excise tax which is calculated based on the buildings use and square footage, according to the Arizona Commerce Authority. There is a 25-year limitation on a development’s use of the tax break.

“It has to be in a central business district and in an area considered lively,” Young said. Young reflected that when he was the city manager, he thought there was a limitation on the size a GPLET area could be but has since learned there is not. Young credited South Tucson City Attorney Bobby Yu with taking a deeper look at the law and determining the South Tucson GPLET area could be expanded. “You can expand this area if you decide to,” Young said.

Opportunity zones are, “a tax shelter for people who have capital gains funds,” Young said, “and it was estimated at the time the bill passed there might be as much as $6 trillion in capital gains available for investment” across the entire nation.

A Brookings report found that, “Few federal policies feature such large, uncapped tax subsidies with so few limits on how those subsidies can be used,” and the report made suggestions to government officials including, targeting the areas most in need and conducting rigorous evaluations of Opportunity Zone programs.

Young pointed to Pima County promotional items already in public circulation that highlight the potential for development in areas including South Tucson. He also said he was inclined to help the newly-hired city manager, John Vidaurri who will take office March 4, through the process of updating the City’s economic development plan to include the proposed changes and opportunities.

Council Member Robert “Bobby” Romero asked if the GPLET could be used for a multi-purpose facility or residential uses and Young said it had quite a bit of flexibility but suggested targeting the strengthening of the tax base first and foremost.

Mayor and Council approved a motion to direct staff to work on the proposed initiatives and return for final action approvals to the Council.

Later in the meeting, executive director of South Tucson Public Housing Authority, Marilyn Chico, delivered a report to the Board of Commissioners (City Council) on the state of public housing in the city. Key highlights included the opening up of HUD vouchers for Section 8 housing and an update on the investigation of a recent fire at a public housing complex on the 400 block of East 28th Street. Suspects have been identified and the investigation is ongoing.

Check back on tucsondelsur.news for updates on the housing fire investigation and more detailed information related to the state of public housing in South Tucson.