City of Mesa
Real Estate

City of Mesa creates redevelopment zones to reverse blight

(Source: EastValleyTribune): Wayne Schutsky – In its latest efforts to redevelop land surrounding the city’s downtown core, the City of Mesa took a significant step toward creating the East and West Redevelopment Areas that would give the city tools to attract investment to blighted areas.

The redevelopment areas will allow the city to take advantage of tax breaks and other incentives aimed at attracting investment and infill development of vacant properties to the designated areas.

At the Aug. 21 city council meeting, the council formally adopted resolutions recognizing the necessity of the redevelopment areas and approving an expansion of the Central Business District to include those areas.

Rather than adhere to specific north-south and east-west boundaries, the maps of each area snake in and out of neighborhoods, commercial districts and old industrial zones to the east and west of downtown Mesa.

The West Redevelopment Area roughly includes select land parcels surrounding Main Street west of Country Club Drive. The East Redevelopment Area includes land parcels surrounding Main Street to the east of downtown and west of Gilbert Road.

The boundaries have to be contiguous to other redevelopment areas, and the light rail corridor was used as a guide in creating the oddly shaped districts, Mesa economic development director Bill Jabjiniak said at a city council study session.

In order to qualify as an RDA, these zones must exhibit a predominance of blighted conditions, as defined by Arizona laws governing redevelopment areas.

This includes visual and non-visual blight, such as building deterioration, excessive trash, fire hazards, graffiti, restricted access, inadequately sized parcels and crime, according to project overviews prepared by the city and presented to the public.

According to a study conducted by Matrix Design Group for the city, 56.4 percent of the parcels in the West Development Area are considered blighted. These parcels account for 80.5 percent of the total land in the area.

The East Redevelopment Area contains 57.2 percent blighted parcels that account for 51.5 percent of the total land area in the zone.

“That doesn’t mean it’s a slum and needs to be demolished,” Matrix Design Group consultant Felipe Zubia said at the study session.

Much of the areas currently house older residential housing, strip malls and dated industrial sites.

The decision to move forward with the redevelopment areas has some citizens concerned about eminent domain issues. They brought up these concerns at public hearings in late June and a City Council study session on Aug. 16.

“It’s been stated that there will not be eminent domain,” Mesa resident William Frost said. “But what happens if some property owners fix up their property and others do not?”

Former councilmember Ryan Winkle, who until recently represented the area affected by the redevelopment plans, had said some citizens remember the fallout of the infamous Bailey’s Brakes case, in which the city attempted to seize a business owner’s land for redevelopment.

The courts ultimately sided with the business owner in that case.

Despite those reservations, Winkle acknowledged the need for some form of redevelopment in the area.

“I drove these areas on the maps and they definitely need some help,” Winkle said at the study session before his ouster from the council on Aug. 31.

Mesa City Manager Chris Brady said that these projects generally involve commercial properties whose property owners have approached the city with redevelopment plans.

“It’s something the city would never compel. It’s essentially a tool,” Brady said.

A public presentation prepared by the city states that the plans will not involve eminent domain or the loss of personal property.

According to the city’s presentation, the plan is focused on improving the quality of life for residents by encouraging reinvestment in the areas surrounding downtown and prompting infill redevelopment of vacant properties.

The redevelopment areas could result in increased property values for property owners, according to the presentation.

The adoption of redevelopment areas will give the city access to various tools to incentivize commercial redevelopment, including the Government Property Lease Excise Tax Program, also known as GPLET.

GPLET is a controversial development tax incentive established by Arizona in 1996. It allows developers to hand over ownership of a property to the city in order to temporarily replace a project’s property tax burden with a lower excise tax. GPLET also allows the city to provide an eight-year abatement of that excise tax.

In order to qualify for a GPLET, a project must be within a city’s Central Business District and a redevelopment area.

Mesa has added all four of its existing and potential RDAs to its Central Business District in order to maximize the benefits of the GPLET by making all areas eligible for the benefits of the program rather than signaling out one zone, Jabjiniak said.

As city develops the specifics of the redevelopment plans it will rely on feedback from business owners, residents and developers in order to determine the other federal, state and local development incentives to include in the plan.