Nikki Ripley, City of Tempe, 480-350-8846
Tempe, Arizona – The Tempe City Council has approved an agreement to rebate a portion of tax revenues from a planned downtown hotel and conference center in exchange for a variety of benefits to the city.
Arizona State University, which owns the land at the southeast corner of Mill Avenue and University Drive, has partnered with a private developer to build USA Place, a multi-use development to include a 330-room Omni hotel, a 30,000-square-foot conference center attached to the hotel, a USAA Basketball arena and other components.
The Council voted Jan. 23 to approve a development agreement for the hotel and conference center. The city will rebate $800,000 per year, for a period of 20 years, from a portion of the city sales tax and bed tax revenues generated by the hotel and conference center.
The word “Tempe” must be included in the name of the hotel and conference center, and the developer will spend at least $495,000 annually for 20 years on the promotion of tourism in Tempe.
The total value of the city’s rebate over 20 years is $16 million. Developing and operating the hotel and conference center is estimated to generate $34.7 million in net revenues to the City of Tempe during that same 20-year period.
Mayor Mark Mitchell spoke about USA Place as part of his recent State of the City Address, which focused on Tempe’s economic development successes. Mitchell has worked to attract a conference center to downtown Tempe throughout his service on the City Council.
“Tourism is one of the largest industries in Arizona – we must take advantage of that and attract visitors to Tempe,” Mitchell said. “This is a good, well-negotiated deal on behalf of Tempe residents and it is great for the health of our downtown economy. Our investment in this exciting project will pay for itself many times over.”
Mitchell has pointed out that the city’s successes at generating jobs and expanding sales and property tax revenues ultimately benefit Tempe residents. The revenues generated make it possible for the city to improve its community services, programs, facilities and amenities.
The Jan. 23 Council action applies to the hotel and conference center, not on other uses the developer plans to bring to the project, such as the arena and residential, office and retail components. The project developers continue to work out details including financing.