But the money doesn’t exist yet.
The Industrial Development Authority for Phoenix on Tuesday approved $57 million in tax-exempt revenue bonds for RED Development‘s hotel portion of the CityScape project at First and Washington streets.
The board of nine Phoenix business men and women authorizes tax-exempt revenue-bond funding for construction, acquisition, improvement and manufacturing projects within the city. Ultimately, the Phoenix City Council would have to decide whether to issue the bonds backed with federal stimulus money.
Lawyer Bryant Barber, who advised the board on the proposal, said the bonds would enable RED to save money because they are tax-exempt, and pay back the bonds, essentially a loan, more quickly with revenue from the hotel.
“It makes the project more feasible,” Barber said.
He added that even though the city has various hotel options, “this would be a boutique hotel, and having hotel options is very important to travelers.”
Barber added that it could help support the traffic driven by the $600 million expanded Phoenix Convention Center and sports venues in downtown.
For CityScape to get the bonds, Arizona would first have to recapture federal stimulus monies that cities have failed to spend by the end of the year.
The federal stimulus money that could back them hasn’t been recouped by the state, and city and state officials are uncertain if it ever will be.
As part of the American Recovery and Reinvestment Act of 2009, Arizona received $135 million in “recovery-zone-facility bond” money for projects meant to finance new development in areas struggling from the recession.
The state doled out the money in chunks to various cities and counties for various projects. Phoenix received the most of all cities – $32 million – while other cities and counties received a share that ranged from as little as $806,000 up to $25 million.
Phoenix already has spent this portion of its stimulus to provide $30 million for two new buildings on the W.L. Gore and Associates‘ medical-products manufacturing site near Interstate 17 and Carefree Highway, and to give $2 million for the paint maker, Dunn-Edwards Paints, to set up a new factory in south Phoenix.
City officials – and CityScape builder RED Development – are hopeful that other Arizona cities have not found a way to spend their share of those stimulus funds. Cities that kept the money face a Jan. 1 deadline or the state can recall it and give it to other projects.
Arizona Department of Commerce spokesman David Drennon said that as far as he knows, no cities with unspent federal stimulus dollars have returned the money.