The Downtown, Aviation, Economy and Innovation subcommittee supported an intergovernmental agreement Tuesday with Arizona State University to assist in the relocation of the Thunderbird School of Global Management.
The agreement includes a proposed $13.5 million from the city’s Downtown Community Reinvestment Fund for the development of graduate student housing and an educational building to house the Thunderbird School. The agreement will now move forward and seeks City Council approval.
The Thunderbird School is expected to move to ASU’s Downtown Phoenix campus next school year and will be housed in the Arizona Center until the new building opens in 2021.
RELATED: Arizona Center proposed interim location for Thunderbird School
Christine Mackay, city of Phoenix economic director, said the city can anticipate high tax revenue as a primary return of the city’s investment.
“In years one to five years we would see $4.2 million in tax revenue, from construction sales tax and lease tax relating to the Arizona Center space and the construction of the new Thunderbird school,” Mackay said. “Annually, operating from year eleven forward, we would see $535,000 in direct tax revenue and that is predominantly in the lease tax and utility taxes that we see coming off of the residential units.”
The purpose of the reinvestment fund is to invest in economic activities and developments that benefit downtown Phoenix. The money in the fund primarily comes from lease payments as well as a few other sources.
“It is funded by land leases of properties that the city of Phoenix owns downtown, or properties that the fund acquired over time and has sold for a profit, that profit then goes back into the fund,” Mackay said. “It is a self-renewing fund that funds the downtown strategic economic development opportunities.”
Mackay said the fund has been used in the past for historical preservation in addition to projects such as the Lawrence Warehouse, Streetscape and the improvement of streets and sidewalks throughout downtown.
The university has received money from the Downtown Community Reinvestment Fund for previous projects including $13.5 million for the construction of Beus Center of Law Society.
As a part of the agreement the city is expected to invest about $100 million in downtown Phoenix for the Thunderbird School. Upon completion of the project in 2021, the city will pay ASU the $13.5 million over a span of nine years.
The 100,000 square foot education facility will be at least four stories and include offices, classrooms and first floor retail, according to city government documents.
The Thunderbird School’s new building will be located at the intersection of Second and Polk streets near the Beus Center for Law and Society building. Construction will begin by Aug. 31, 2019 and the facility is expected to open by the end of March 2021, according to the same documents.
RELATED: Future Thunderbird relocation draws praise
Since the announcement of the Thunderbird School’s future relocation to downtown Phoenix there has been excitement among some city leaders and alumni.
“I would like to see the T-Birds integration into the bustling business environment downtown sooner rather than later,” said Kevin Roos, alumnus from the first class of Thunderbird after ASU’s acquisition.
Contact the reporter at Clare.Griffin@asu.edu.
