GPLET

GPLET is a large portion of what the DDO does:

Government Property Lease Excise Tax (GPLET) is administered by the City of Phoenix in order to lure potential job-creating businesses into (re)development areas. GPLET removes the business’s obligation to pay property taxes to the County of Maricopa, and instead negotiates an excise tax and a lease rate; the two combined are significantly less expensive within the terms of the GPLET agreement than the property tax – thus making settling in Phoenix more enticing to firms.

GPLET is implemented in the City of Phoenix to entice potential businesses, retail stores, hotels, research firms, and art entrepreneurs to the Downtown Phoenix region. The lease and excise tax are usually standard, but are subjected to negotiation depending on a variety of circumstances: how many jobs the firm will create, the financial standing of the firm, the location of the development, and so forth. The length of the lease is also open for negotiation; although, the standard lease length is twenty-five years. The first year on GPLET is typically free- new companies do not pay any lease rates or excise tax. The last year of the GPLET lease is designed to cost as much as property taxes, and substantially increase every year thereafter. Thus, it would behoove the business to buy the land from the City the last year of the lease. Increasing GPLET rates after the lease provides incentives for companies to move off of GPLET, purchase the land from the government, and begin paying regular ad valorem property taxes.

GPLET is a controversial issue. Stay tuned to see how the policy evolves.