Glendale Voters To Decide Fate Of GPLET

August 22, 2023

By Daniel Stefanski |

Glendale voters might soon have the future of a billion-dollar resort in their hands.

Worker Power Institute, a nonprofit and social welfare 501(c)(4) organization, announced that it had obtained the necessary signatures to refer the city’s and resort’s Government Property Lease Excise Tax (GPLET) arrangements to the ballot.

Over 5,500 signatures were collected, and both Glendale and Maricopa County notified parties that this referendum was eligible for the ballot. The 60-acre VAI Resort and Mattel Adventure Park is expected to be completed in 2024 and to add 1,800 jobs.

The Glendale City Council will now decide when its municipality’s voters will see this referendum on the ballot.

Before the news of the successful signature drive, Brendan Walsh, the Worker Power Institute’s Executive Director, said, “If there is one thing all developers hoping to build in Arizona should know, it’s that Arizona voters believe in fairness. And the unrestrained and unnecessary use of GPLETs is not playing fair. If developers want property tax breaks, then voters will want to see that they are getting real community benefits. I see the work we are doing as allowing voters the opportunity to have a say in how the cities they live in are built.”

GPLET agreements have been fairly common in the state – and increasingly controversial as more attention comes to these respective arrangements. Last year, the Arizona-based Goldwater Institute fought one of these episodes in the City of Phoenix with the Hubbard Street Group and plans for private real estate development.

As explained by Goldwater, “Utilizing the GPLET abatements provisions of Arizona law, the City has agreed to accept title to the Hubbard Project so that the property becomes ‘government property,’ and thus excluded from the tax rolls. Under this arrangement, the City then leases the property back to Hubbard, who controls and manages the property during the lease just as the developer would any other private business. Yet through use of the GPLET, Hubbard will pay no property taxes on the private development for eight years, while other Arizona taxpayers – in Phoenix and beyond – will be forced to shoulder the difference. At the end of the 8-year lease, the City conveys the property back to the developer. In other words, under this arrangement, private property is conveyed to the government while in reality being owned and operated by a private party for the sole purpose of evading property taxes that would otherwise be owed and to which other taxpayers are subject.”

The Goldwater Institute added, “This arrangement results in tax shifts from the private party receiving the subsidy to other taxpayers who do not. It also creates unfair competitive advantages for Hubbard, who can compete with similar businesses not only with its own resources but with those of Phoenix taxpayers.”

The differing GPLET agreements vary in size and length. While the Phoenix-Hubbard arrangement was for eight years and $7.9 million, the Glendale resort project is likely to be significantly larger. According to a report, “the previous agreement with the developer’s former owners had a valuation of $30 million in exchange for $240 million in tax revenue over the term of the incentives.” The term for Glendale would be 25 years.

The Worker Power Institute was previously credited with helping to take down the Arizona Coyotes’ move to Tempe and the proposed $2.1 billion entertainment district. In this rejected scenario, there appeared to be two GPLETs – one for eight years and one for 30 years, in order to make the hockey team’s move a reality.

Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.

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