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Students concerned about newly approved development along Tempe Town Lake

ASU students are worried about how the $1.8 billion development on Tempe Town Lake will affect housing costs

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The South Pier development is planned to be built between Rio Salado and Rural roads near Tempe Town Lake.

Tempe City Council unanimously passed a proposal to build a $1.8 billion development on Tempe Town Lake last week. Although council members are confident in the project’s financial effect on the city, some ASU students are worried about the project's impact on the skyrocketing housing costs in the area.

The project, developed by South Pier, is a development that will include 2,300 apartments and 160 condominium units to accommodate an estimated 3,500 residents, as well as functioning as a hotel. The project also includes a Ferris wheel, office and retail space and a new pedestrian bridge on the east side of the lake.

The land the project is going to be built on is worth more than $36 million dollars along Rio Salado Parkway east of Rural Road.

The project is being given a government property lease excise tax, or GPLET, which is a tax reduction that incentivizes development in the state of Arizona. The GPLET will apply for eight of the 15 years expected to complete the project. Tempe City Council members say that this is a good thing, and will produce revenue in the future.

"Right now that piece of land is generating absolutely no revenue and... after that eight year GPLET window comes and goes, it will then produce property taxes," said Robin Arredondo-Savage, a Tempe councilmember. "So there will actually be revenue coming into the city because of a developed piece of land that may not have been able to get developed if it wasn't for the GPLET."

Tempe residents and ASU students are not as enthusiastic about the project, as they see this as something that will make housing costs go even higher.

Michaela Schillinger, a sophomore studying political science who lives in Tempe, spoke in the council meeting about her concerns about the effect the project and its tax deduction have on local housing costs.

"The development that these luxury apartments and hotels would be built on is about five to 10 minutes from campus." Schillinger said in the meeting. "I don't understand that if they are going to build something there why it wouldn't be affordable housing for students and for the people of Tempe."

The developers plan to give the city of Tempe over $12 million for "public benefits," which would go to the building of affordable housing, transit and education funding. They are also committed to building the first phase of the new pedestrian bridge and will assist in funding the subsequent phases of construction. The development itself will also include 300 affordable housing units.

Councilmember Lauren Kuby said the land on Tempe Town Lake is too expensive to build affordable housing on. Because the project was presented publicly to the city council for the first time Thursday, she wanted to postpone the vote for a month to think about the approval before they took a final vote. The motion to postpone the vote was shot down 4-3 during the meeting.

"I was trying to argue ... that this was essentially the first read and that we should continue it and have a second read in March so we can give people time to understand what the deal points were and kind of chew on it for a bit," Kuby said.

Jason Ronstadt, a senior studying chemical engineering, also raised concerns about the lack of public input on the project. 

"I do not believe that a luxury development should receive seven GPLETs and not have to pay eight years of property taxes when our community is in desperate need of these resources," Ronstadt said in the meeting. "Like other students and workers here in Tempe, I want to make sure that the projects, especially ones that receive tax subsidies, are enriching our community. It is difficult to do this with the limited information that has been provided."

Even though Kuby thinks the city council should have postponed the vote for a month, she recognizes the project’s potential.

"In the case of the lake, you have very expensive land with all these assessments and taxing districts and it's very complicated and it's the most expensive place to build affordable housing," Kuby said. "So, in this case, I do think the best solution is to have this development and then take dedicated money and put it into affordable housing and other places in the city."

Arredondo-Savage said the South Pier deal is similar to the deal for the construction of Tempe Marketplace, which needed a tax incentive at the start but now pays its entire tax share. Arredondo-Savage thinks the deal’s impact will be like Tempe Marketplace's.

"I feel like it's a really fantastic deal for the entire city, not just the area of Town Lake, but it's going to really make an impact everywhere," Arredondo-Savage said. "We're going to be able to create some affordable housing and we're going to really enhance the lake. I think it's a win-win."


Reach the reporter at sbrenna5@asu.edu and @shanebrennan36 on Twitter

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Shane BrennanPolitics Reporter

Shane Brennan is a politics reporter. He previously was a sports writer, and is currently working with Blaze Radio and Downtown Devil.


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