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Arizona lawmaker questions Tempe use of tax breaks in 2 projects

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PHOENIX — City leaders in Tempe are defending themselves against an Arizona lawmaker’s accusations it improperly awarded tax breaks in two deals.

Republican Rep. Vince Leach of Saddlebrooke (near Tucson) has asked the Arizona Attorney General’s Office to look into the matter that involved the Graduate Tempe hotel near Mill Avenue at Apache Boulevard and Bank of the West near State Route 143 and Broadway Road.

The city posted a lengthy memo on its website this week, saying it “has responsibly, selectively and legally made use of the limited development incentive tools that are allowed by Arizona state law.”

Leach wrote Mayor Mark Mitchell and the city council in December, questioning their use of a tax incentive without going through the correct channels.

The rates were not properly vetted by the Arizona Department of Revenue, as required by state law, Leach wrote in his letter.

The property tax breaks granted through the Government Property Lease Excise Tax were out of date and too low. Both leases needed to be canceled, Leach wrote, and re-signed under updated terms of rate.

“It is unfortunate that a member of the Arizona Legislature has decided to use misunderstandings about GPLET and misinformation about Tempe’s use of state statutes to employ a tactic to threaten the city revenue distribution that keeps cities and towns afloat and able to provide critical services to residents such as police and fire protection,” the Tempe statement said.

The attorney general’s office has 30 days to make a decision whether or not to pursue action.

If the city is found in violation and it’s not addressed, the state could withhold funds until the problem is resolved.

KTAR News’ Bob McClay and the Associated Press contributed to this report.

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