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Home My WebLink AboutPackets - Council Packets (943) AGENDA ORO VALLEY TOWN COUNCIL/PARKS AND RECREATION ADVISORY BOARD JOINT STUDY SESSION JANUARY 11, 2006 ORO VALLEY COUNCIL CHAMBERS N 11,000 N. LA CANADA DRIVE JOINT STUDY SESSION: AT OR AFTER 5:30 P.M. CALL TO ORDER: 5:30 P.M. ROLL CALL 1. REVIEW OF PARKS AND RECREATION ADVISORY BOARD RECOMMENDATION FOR EXPENDITURE OF BED TAX FUNDS 2. REVIEW OF AMENDMENTS TO COMMUNITY ECONOMIC DEVELOPMENT STRATEGY (CEDS) 3. REVIEW OF AMENDMENTS TO ECONOMIC DEVELOPMENT GUIDELINES ADJOURNMENT The Town of Oro Valley complies with the Americans with Disabilities Act (ADA). If any person with a disability needs any type of accommodation, please notify the Oro Valley Town Clerk at least five days prior to the meeting, at 229-4700. POSTED: 01/06/06 4:00 p.m. Ih PRAB RECOMMENDATONS January 1, 2005 to June 30, 2005 -Estimated $40,000 available Position Upgrade — Recreation Leader, Part Time to Full Time $7,400 • 1/2 of a position for %2 of a year—then General Fund • No new permanent Recreation positions since Fiscal Year 00-01 • Number of Recreation classes have increased by over 400% since 00-01 • Number of Recreation camps for children have increased by 300% since 00-01 • Addition of Recreation Room in 05 — now manage the facility and have added instructors • Position would generate new revenue almost equal to additional cost (would make back what you spend.) • Recreation programs and children's camps cannot be expanded until staff are added Position Upgrade — Assistant Pool Manager, Part Time to Full Time $7,500 • V2 of a position for V2 of a year—then General Fund • No increase in permanent Pool positions since Fiscal Year 00-01 • Addition of%2 day summer camp at the pool in Fiscal Year 04-05 • Number of aquatic classes and programs have increased by over 200% since 00-01 • Addition of Spring Egg Dive, 4th of July Pool Celebration, Dive In, and Duathlons (six per year) since 00-01 Position Upgrade — Senior Office Assistant, Part Time to Full Time $10,000 • %2 of a position for %z of a year—then General Fund • No increase in permanent office help since Fiscal Year 99-00 • Workload includes assisting with reservations, registrations, rentals,phone calls, walk-in customers, secretarial duties, deposits and other duties as assigned • Division has experienced substantial growth since 2000—administrative duties expand proportionally with overall Division growth • Workload exceeds the ability of existing 1.5 administrative staff Parks Storage Shed $15,000 • Due to OSHA standard for the storage of chemicals and the lack of existing space, a new shed is needed at Riverfront Park Equipment, chemicals and materials • Decreases the likelihood of an accident or injury due to operations in an overcrowded area • Will be located inside the existing fenced maintenance yard • Will be placed on a cement slab (included in price) GRAND TOTAL $39,900 July 1,2005 to June 30,2006—Estimated $80,000 available Bleacher Enclosures $23,000 • All bleachers at James D. Kriegh Park will have an enclosure built around the perimeter to prevent falls from seats above 36 inches • Will bring bleachers up to current Building Codes • 10 bleacher to be retrofit Pool Aerators $13,000 • Two sprayers that would be used in the pool during the summer to reduce the water temperature • Replenishes oxygen in water and eliminates bacteria, algae, and the growing threat of transmittable viruses • Reduced the amount—and therefore the cost—of pool chemicals needed • Makes pool more comfortable for patrons by cooling the water (pool can get up into the mid to high 90s during the summer) Parks Storage Shed #2 $15,000 • Due to OSHA standard for the storage of chemicals and the lack of existing space, a new shed is needed at James D. Kriegh Park Equipment, chemicals and materials • Decreases the likelihood of an accident or injury due to operations in an overcrowded area • Will be located inside the existing fenced maintenance yard. • Will be placed on a cement slab (included in price) Basketball Court / Tennis Court Resurfacing $20,000 • A standard maintenance practice to eliminate cracking and chipping • Create a smooth, safe playing surface • To be done every 5 to 6 years Gator— Small Utility Vehicle $13,400 • For James D. Kriegh Park—a beefed up golf cart for maintenance • Used for all phases of park maintenance GRAND TOTAL $84,400 Additional Unfunded Needs to be Considered Parks Truck $22,000 • To augment the $6,000 budgeted in 05-06 for the procurement of a Parks Truck • For Facility Maintenance Supervisor—currently uses personal vehicle for work Field Groomer $18,000 • A Groomer is used on ball fields to keep the infields smooth and level; tines dig up dirt and the drag mat smoothes and levels it out. Also used on turf to break up aerification plugs • To replace an existing groomer that is essentially beyond repair, no parts available Air Conditioning Upgrade to the Rec Room $23,000 • Room capacity now 14 students • With this upgrade, capacity will go up to 50 • Increased capacity will allow for expanded programming and increased revenue Sidewalk Extension— James D. Kriegh Park $28,000 • Install new sidewalk from Dog Park on NE corner of park to existing NW sidewalk • Would meet ADA requirements • Would be able to access all facilities and fields on a sidewalk TOWN OF ORO VALLEY COUNCIL COMMUNICATION STUDY SESSION: January 11, 2006 TO: HONORABLE MAYOR & TOWN COUNCIL FROM: Chuck Sweet, Town Manager SUBJ: Parks & Recreation Advisory Board Recommendation for Expenditure of Bed Tax Funds SUMMARY: On August 24, 2005, the Council adopted Resolution No. (R) 05-35 allocating the Town's expenditure and distribution of funds collected under the 6% bed tax rate imposed on transient lodgin9 from January 1, 2006 through June 30, 2007. Attached is an excerpt of the August 24th Council meeting regarding this item. As part of the motion approving this Resolution, the Council directed the Parks & Recreation Advisory Board (PRAB) to develop a priority list of parks and recreation needs to be considered for funding as part of the allocation and distribution of funds to be collected from the 6% bed tax. Also attached are the minutes from the August 10, 2005 Study Session where this same subject was discussed. Included in this packet is a memo from Finance Director Stacey Lemos regarding PRAB's recommendation. I concur with the Finance Director's analysis and recommendation to restrict the expenditures to capital items and one-time expenditure type transactions rather than dedicating this revenue source to the payment of ongoing full-time positions because this designation may change after June 30, 2007. ATTACHMENTS: 1. November 22, 2005 Memo from PRAB Chair Tom Honebrink re: PRAB Recommendation for Expenditure of Bed Tax Funds 2. August 10, 2005 Council Study Session Minutes re: allocation of the Town's Bed Tax 3. August 24, 2005 Council Minutes excerpt re: adoption of Resolution No. R 05-35 allocating the Town's expenditures and distribution of fund collected under the 6% bed tax rate imposed on transient lodging 4. December 15, 2005 Memo from Finance Director Stacey Lemos re: PRAB Recommendation for Expenditure of Bed Tax Funds .t A 4 Chuc Sweet, own Manager MEMO UM TO: Mayor Paul Loomis Town Council FROM: Tom Honebrink, Parks and Recreation Advisory Board Chair l CC: Parks and Recreation Advisory Board (PRAB) Members Chuck Sweet, Town Manager DATE: November 22, 2005 RE: REQUEST FOR STUDY SESSION: PRAB Recommendations for Expenditure of Bed Tax Funds On August 24, 2005, Town Council considered the allocation and distribution of funds to be collected from the 6% Bed Tax. At that meeting, Council directed the Parks and Recreation Advisory Board (PRAB) to develop a priority list of parks and recreation needs to be considered for funding as part of the allocation. The Board has eagerly embraced this assignment, and requests a Town Council Study Session to review and discuss the recommendations. PRAB very much appreciates Town Council's commitment to Oro Valley's quality of life, and commends the forethought and action taken to allocate this money to parks and recreation. Following the August 24th Council Meeting, PRAB began to explored the Town's unfunded needs. Although the Board planned to provide their recommendations by November 1, 2005, unavoidable family circumstances delayed the process. The following recommendation list was developed based on unfunded Capital Improvement Project lists, unfunded budget requests, and Board member expertise and experience. The Board developed recommendations for use of the Bed Tax for the following time periods: (1) the last half of Fiscal Year 05-06, and (2) Fiscal Year 06-07. Additionally, PRAB provided a list of additional unfunded needs to be considered as funding becomes available. PRAB RECOMENDATONS January 1, 2005 to June 30, 2005 - Estimated $40,000 available Position Upgrade—Recreation Leader, Part Time to Full Time $ 7,400 Position Upgrade—Assistant Pool Manager, Part Time to Full Time $ 7,500 Position Upgrade— Senior Office Assistant, Part Time to Full Time $10,000 Parks Storage Shed $15,000 GRAND TOTAL $39,900 July 1, 2005 to June 30,2006—Estimated $80,000 available Bleacher Enclosures $23,000 Pool Aerators $13,000 Parks Storage Shed#2 $15,000 Basketball Court/Tennis Court Resurfacing $20,000 Gator— Small Utility Vehicle $13,400 GRAND TOTAL $84,400 Additional Unfunded Needs to be Considered Parks Truck $22,000 Field Groomer $18,000 Air Conditioning Upgrade to the Rec Room $23,000 Sidewalk Extension—James D. Kriegh Park $28,000 MINUTES ORO VALLEY TOWN COUNCIL STUDY SESSION AUGUST 10, 2005 ORO VALLEY TOWN COUNCIL CHAMBERS 11,000 N. LA CANADA DRIVE STUDY SESSION: AT OR AFTER 5:30 P.M. CALL TO ORDER at 5:35 p.m. ROLL CALL PRESENT: Paul Loomis, Mayor (arrived at 6:05 p.m.) Barry Gillaspie, Vice Mayor Paula Abbott, Council Member Kenneth Carter, Council Member Connie Culver, Council Member Helen Dankwerth, Council Member Terry Parish, Council Member 1. DISCUSSION REGARDING ALLOCATION OF THE TOWN'S BED TAX • Economic Development Administrator Jeffrey Weir summarized that on June 15, 2005 the Mayor and Council adopted Ordinance No. (0)05-18 amending the • Town Tax Code by increasing the transient lodging tax rate to 6% and designating the effective date as February 1, 2006. Mr. Weir pointed out the following main points that have come out after meeting with Town staff, representatives from the Metropolitan Tucson Visitors and Convention Bureau (MTCVB), management of the Hilton El Conquistador Resort and a representative of the Southern Arizona Lodging Association: 1. The primary reason for support of the Bed Tax increase from the lodging industry was recognition that the Tucson region was severely under funded when compared to regions of similar size. The expectation from industry members, such as the Hilton El Conquistador Resort, is that one-half of the funds would be directed toward and expended for tourism promotion. Of the remaining one half of the funds, a portion should be directed toward economic development. The industry supports expenditures that increase the attractiveness of communities within the region. Items such as the development of the Naranja Town Site, Parks and Recreation facilities and grounds, and other similar projects would fall 91c- into this category. 2. A significant allocation of the Bed Tax funding is to be expended on tourism development and will eventually be directed to the MTCVB, the issue of how would this increase in funding be used by the Bureau was addressed. Many new and exciting efforts will be undertaken by the Bureau. A major new effort that has exciting potential for Oro Valley is the promotion of Sporting Venues and Activities. Given the Town's established identity with the El Tour de Tucson biking event, National Juniors Tennis event and the home to the Tucson Marathon, any expansion of the awareness of these important activities should provide a direct economic benefit to Oro Valley. With the new events such as the 08/10/05 Minutes, Council Study Session 2 Arizona Distance Classic (1/2) marathon) and future regional/national opportunities for youth soccer—football — baseball (when facilities are completed) added to the promotional mix, it is easy to see the potential economic gains to the community. 3. Recognition as expressed during the June 15, 2005 meeting that the Economic Development Agreement (EDA) between the Town and the Hilton El Conquistador Resort MUST be recognized. The EDA requires that 2% of the available 3% Bed Tax be rebated to the Hilton through August 2011. Mr. Weir clarified that when the agreement with the Hilton expires in 2011, it is the understanding that that 2% would become available to the Bureau to reach the parity of 50% or 3%. The Bureau and industry representatives have proposed that the initial increase proposed for MTCVB from 0.75% to 1.50% be reduced to an amount of 1.00% This amount when combined with the Hilton's 2.00% equals a total of 3.00% or one half of the total Bed Tax rate. Mr. Weir stated that the proposed reduction of the Bureau's allocation will make available 0.50% that should be allocated for one of the highest priority community needs that is currently under-funded; Parks and Recreation Facilities/Services. Funding for these meaningful projects will provide major benefits for everyone in the community, including tourists and visitors. It is recommended that if the Town Council agrees with the allocation of the 0.51'0 o e :e• ax or 'a r s . 'ecrea ion uses, a e mo ion or a o io Qf the allocation s ou • Inc u•e •irection to t e 'ar s an ecreation Advisor Board to return by no later than November 1, 2005 to the Town Council with a prioritized list of parks and recreation neess. Mr. Weir stated that additionally, the Bureau would welcome discussions about revenue sharing with the Council concerning new lodging capacity and the concurrent increase in Bed Tax revenues addressing achievement of revenue parity within a specified period of time. Discussion followed on the Suggested Revenue Distribution spreadsheet that has been prepared. It was pointed out that the revenues indicated on the spreadsheet are illustrative of a full 12 month year; whereas, actual revenues received during the 2005/06 fiscal year will be less, based on the February 1, 2006 implementation date. Council Member Parish stressed the importance of Oro Valley pulling its own weisht. Mr. Parish stated that the Bureau will become more and more imsortant to this Town as we set more hotels herefore, the commitment u• to 3% becomes more important. He stated that Parks and Recreation in Oro Valley are underserved and the .5% designated is a "drop in the bucket." He stated that as Oro Valley grows, te ounce nee s to conTinue to Ioo c or uaing opportunities for our Parks and Recreation programs. e encourage t e ouncil to ask Parks & Recreation Advisory Boars (PA or recommen•ations on ow •est 08/10/05 Minutes, Council Study Session 3 the money could be spent to meet their needs. He felt funding for the Parks is long overdue. He also stated that the funding for the Naranja Town Site is also a "drop in the bucket," but it is a start. Updating t e owns mar eting literature is critical and it is important to set ourselves apart from ucson so t at we have the same advantages as other communities, suc as co s a e as y setting themselves apart from the City of Phoenix. Council Member Carter recommended that the Town Council give a lump sum of money instead of promising a percentage of the bed tax. He recommended $150,000 go towards the Naranja Town site. He reviewed his print out of potential bed tax revenue calculations. He asked that the Resolution allocating bed tax funds be renewable July 1, 2006 and then review the resolution every year thereafter. Council Member Dankwerth agreed that it was important to fund the Naranja Town site but, other needs of the Town should not be shortchanged. She suggested establishing funding for other smaller parks in the Town and that funds be spent for equipment in existing parks. Council Member Culver stated that should we have another bad year like 2001, the Town could be in a position of overextending ourselves. Therefore, she suggested that a careful analysis of the percentages be done. Council Member Carter agreed with Council Member Dankwerth in that more funding is needed for parks. Council Member Parish stated that if the Town commits to a set dollar figure instead of a percentage, the Town is locked in to that amount, regardless of what happens in the industry. We need to look at the global and.regional perspective. It is not fair for Tucson and Pima County to pay 50% of their bed tax for the promotion of tourism and then Oro Valley to pay a smaller share and expect that Oro Valley will get the same benefit. Council Member Abbott stated that she agreed with Council Member Carter in that it is a questionable practice to commit a certain percentage. She stated that she is more comfortable with a flat rate. She suggested that the needs of Parks and Recreation be discussed during the Council Retreat. Council Member Culver stated that the Council should consider percentages as an incentive - the more bed tax is brought in, the more money the agencies will have to promote. She supported considering percentages. In response to a question by Council Member Dankwerth, Mr. Sweet clarified that the draft resolution being discussed this evening takes the 6% and would lay out its distribution for a specific period of time. He stated that the Council could modify the resolution when they want to. Vice Mayor Gillaspie opened the floor for public comment. 08/10/05 Minutes, Council Study Session 4 Tom Moulton, 1108 W. Castle Dome, Oro Valley. Mr. Moulton explained how Pima County worked with the State Legislature to form a partnership program between Pima County, tourism and hospitality industries and the Southern Arizona lodging organizations. He explained that this program was formed to provide a unified voice to increase the opportunity to promote our region. He stated that the Legislature voted to allow Pima County to collect 6% bed tax. Pima County has committed 50% of the 6% bed tax to Metropolitan Tucson Visitor's & Convention Bureau (MTCVB). Jonathan Walker, 16 W. Wanderlust Road, Oro Valley and Director of the Metropolitan Tucson Visitor's and Convention Bureau (MTCVB). Mr. Walker expressed the value of tourism to Tucson and Oro Valley; the need for increased funding to promote tourism and continuing the fair participation by Oro Valley. Mr. Walker stated that the MTCVB is proposing a 50% bed tax split (same as Tucson and Pima County) and the 3% set aside for tourism marketing. He explained that MTCVB is willing to take a less percentage upfront knowing that the 50% split will begin when the Hilton El Conquistador Resort Economic Development Agreement runs out in 2011. Mr. Walker distributed a handout entitled "Sales & Marketing Strategic Overview to Leverage Additional Bed Tax Dollars." He explained that tourism marketing is long term and needs to be aggressive and consistent. He reviewed his handout discussing Leisure Advertising and Branding; Group Tours & Tour Operators Domestic and International; Convention and Group Meetings; Marketing of attractions, events and cultural activities that relate to promoting tourism; Mexico Marketing; Airline Route Development Marketing Support and Film Promotion. Tim Booth, 1150 W. Saddlehorn Drive, Oro Valley and General Manager, Hilton El Conquistador Resort, 10,000 N. Oracle Road. Mr. Booth explained how hotel general managers approach their areas and how they try and establish coalitions to develop business on a regional front. He stated that the regional destination is not Oro Valley, but is Tucson and we must have regional support. He stated that the economic development portion of this program is critical to the Hilton. If the resort loses the momentum of a partnership development with MTCVB, Oro Valley will be in trouble. MTCVB is responsible for 25% to 30% of the Hilton's business. He stressed the importance of partnering with MTCVB and that money must be continued to be put in an economic engine, which is a long term investment in the community. He brought up formula funding and stated that 15 out of 17 communities he has worked in use formula funding (percentage) to guide their efforts in how they fund tourism. He concurred with Council Member Parish with the pitfalls of committing to a $ amount. He stressed that the destination is Tucson and the formula funding at 50% is necessary to keep the relationship intact with all the other initiatives and relationships in the Pima County area that will promote Tucson. Those $ amounts are critical to investing in our region. In response to a question by Vice Mayor Gillaspie, Mr. Booth stated that he is in agreement with the suggested revenue distribution. 08/10/05 Minutes, Council Study Session 5 In response to a question by Council Member Abbott, Mr. Booth stated that the *Pr money received by the Town per the Economic Development Agreement goes entirely towards sales and marketing. In response to a question by Mr. Booth, Council Member Parish explained the importance of reviewing the bed tax allocation resolution annually. He agreed that this money is not a "give away" but is an investment in the community and the dollars we generate say so. Mr. Booth offered to take the Council on a tour of the Hilton El Conquistador. Tom Honebrink, 500 W. Golf View Drive, Chairman of the Oro Valley Parks and Recreation Adviso Board ''7• : . V r. "one•nn an e• t e ou nci or t e direction Council is •oin• towards hel•in• to fund •arks, Naran'a Town Site and improving the qualit of life in Oro Valley. He stated on behalf of PRAB, he is happy to assist as needed. - Doug McKee, 11836 Cassiopeia, Oro Valley. Mr. McKee stated that what is being discussed this evening is an investment in advertising. He stated all advertising decisions are tough ones to know what the proper level of expenditure is. He stated that he has not heard any solid data that indicates • what the productivity of the MTCVB is in bringing in tourism to Oro Valley. He discussed a typical risk/reward ratio. He agreed with Mr. Walker that more airline coverage is needed in Tucson. He was not sure that the film industry would help Oro Valley. He suggested adding some way to measure the effectiveness of advertising. He stated leisure travel is done mostly by website and doesn't think that MTCVB is doing much in that regard. He stated that if the Council decideslo give MTCVB more money, there should be a higher level of activity beyond what is seen today. Jerry Bustamante, 8944 N. Hartman Lane, Executive Director, Northern Pima County Chamber of Commerce. Mr. Bustamante expressed the Chamber's support in increasing the bed tax due to their confidence in the MTCVB. He stated that the Chamber also supports the proposed distribution of funding. He stated that as we strengthen as a destination/resort community, everyone benefits. He stated that Economic Development in Oro Valley should receive their fair share of funding so that more can be done to promote our regional vacation amenities so that our citizens can take advantage of those amenities in the community. Mr. Bustamante stressed the importance of marketing. He stated that it is difficult to identify the results generated. Marketing is truly a long term commitment. He is confident that the Chamber members are satisfied with the MTCVB and they would like to see Oro Valley do more to compliment what MTCVB is doing. Council Member Culver commented that sales and marketing is the life blood of businesses and we must have sales and marketing if we want businesses to succeed. She asked Council to seriously consider the allocation because that in turn will fund the Town. 08/10/05 Minutes, Council Study Session 6 Council Member Parish agreed with Mr. McKee in that website information dates back to 2003. However, Oro Valley marketing materials are dated 1997/98. He -` stated that Mr. Weir's efforts not P withstanding, this speaks volumes to what the Town's commitment has been to economic development and we need to improve that commitment. Vice Mayor Gillaspie summarized what had been discussed: • Issues about formula funding. • How long the resolution should be in effect. • How to invest monies into parks & recreation and other strategies such as smaller parks (to be discussed at another time). • Heard some comments about the relationship between the MTCVB and our biggest hotel revenue generator and what the impact Council's decision would mean on that potential relationship and future revenue generation. • Fair participation. Vice Mayor Gillaspie stated that all these items discussed can be handled during the adoption of the resolution on August 24, 2005. Council Member Abbott asked to see what other cities/towns are doing, statewide and region wide; a copy of the agreement with Stone Canyon (Ritz) and the Hilton; information on the northern Mexico marketing; information regarding the MTCVB on-line marketing on the web. • Vice Mayor Gillaspie stated that because Mrs. Abbott's request is personal, he asked staff to provide it when available and then make a copy available to the rest of the Town Council. Vice Mayor Gillaspie and Council Member Parish stated that most of the information Council Member Abbott has requested, has been previously distributed. 2. DISCUSSION REGARDING FINANCE AND BOND COMMITTEE'S RECOMMENDATION FOR IMPLEMENTATION OF A LOCAL SALES TAX ON UTILITY SERVICES WHICH INCLUDE ELECTRICITY, NATURAL GAS AND WATER Assistant Town Manager David Andrews stated that on June 13, 2005, the Finance and Bond Committee voted unanimously in support of the utilities sales tax and voted unanimously in opposition to the telecommunications sales tax. He reviewed the fiscal impact: Revenue that is estimated to be received from this ordinance would be $1,917,000 annually. The cost impact per household will vary, based on consumption. The estimated total monthly cost per household 4111 would be $7.20. 08/10/05 Minutes, Council Study Session 7 He reviewed a comparison of the local sales tax and franchise fee rates of the municipalities located within Pima County and stated that Oro Valley was the only municipality not collecting local sales tax on utilities. Mr. Andrews stated that the Think Tank has unanimously recommended implementation of a local sales tax on utility services. Staff was directed to proceed with the following timeline: • August 10, 2005 Study Session • September 7, 2005 1st public hearing • October 5, 2005 2nd public hearing; consideration & possible adoption of ordinance • January 1, 2006 Effective Date of the Ordinance Staff was also directed to prepare a press release and also to publish in the Sun City Tipster. ADJOURNMENT A MOTION was made by Council Member Culver and SECONDED by Council Member Dankwerth to ADJOURN the study session at 7:48 p.m. MOTION carried 7 — 0. Respectfully submitted, Kathryn E. Cuvelier, CMC Town Clerk 08/24/05 Minutes, Council Regular Session 8 Mayor Loomis closed the public hearing. 111 Council Member Parish commented that the initiation of the annexation process does not mean that the annexation has occurred. He explained that there is one year to complete the annexation process. He stated that if an agreement can not be reached with the property owners, then both sides go their separate ways. He stated that nothing is "bought" until both sides come to an agreement and in the end, each Council member would have to determine if the agreement was in the best interest of the Town. In response to a request from Mayor Loomis, Mr. Sweet explained that it is not unusual for property owners of unincorporated areas to look for some certainty upon annexation. He explained that pre-annexation agreements put in written terms items such as zoning and uses, etc. that are currently enjoyed in Pima County. He explained that according to Oro Valley's process, these agreements are first presented to the Planning and Zoning Commission and then are forwarded to the Town Council for a second public hearing. Mr. Sweet explained that pre-annexation agreements can lay out a number of things that fall within the State law, but they can not obligate the Town to future actions (i.e. can not enter into an agreement that would contract a different zoning at a later date.) 8. RESOLUTION NO. (R)05-35 ALLOCATING THE TOWN'S EXPENDITURE AND DISTRIBUTION OF FUNDS COLLECTED UNDER THE 6% BED TAX RATE IMPOSED ON TRANSIENT LODGING (BED TAX) FOR • ONE YEAR ONLY, FROM THE EFFECTIVE DATE OF THIS RESOLUTION, REPEALING ALL RESOLUTIONS OF THE TOWN OF ORO VALLEY IN CONFLICT THEREWITH Economic Development Administrator Jeff Weir explained that the Town Council approved Ordinance (0)05-18 which increased the transient lodging tax (Bed Tax) to 6%. Following a Study Session discussion regarding the distribution of the Bed Tax increase and input from the local business community and citizens, recommendations have been made as follows: • 1/2 percent of the Bed Tax for Parks and Recreation (with Parks & Recreation Advisory Board presenting a prioritized list of Parks and Recreation needs to the Council by November 1, 2005) • Economic Development Marketing Program — Mayor and Council will review and approve a program effort clearly indicating costs and expected outcomes prior to any commitments by the Town's Economic Development Division. • Change the effective date of the Bed Tax Rate Increase from February 1, 2006 to January 1, 2006 which coincides with the effective date for Pima County's Bed Tax Rate increase. Mayor Loomis opened the floor for public comment. 08/24/05 Minutes, Council Regular Session 9 Chet Oldakowski, 11706 N. Via De La Verbenita, stated that it was important to have the greatest positive effect to the public emphasizing parks, the Naranja • Town Site, etc. He urged the Council to take a strong look at what flows into the Town. He further stated that the Metropolitan Tucson Convention and Visitors Bureau's (MTCVB) website makes very little mention of the Town of Oro Valley and questioned whether the Town was getting what it is paying for. He also stated that justification for these monies should be done on an annual basis. Chris DeSimone, 11556 N. Eagle Peak, questioned the monies allocated for the MTCVB. He stated that every dollar raised by the increased Bed Tax was precious and should go to Parks and Recreation and the Greater Oro Valley Arts Council (GOVAC.) Art Segal, 10148 N. Bighorn Butte, stated that where the increase in the Bed Tax goes was a big issue and that a return on the Town's investment was important. He said that the Town's monies would be best spent on our children, schools, transportation, etc. and they should not be spent on private enterprise. Cheryl Smith, 11500 N. Skywire, stated that the Town's children were top priority. She stated that the Bed Tax increase should be totally earmarked for the Naranja Town Site and the monies should be kept here and used for our most valuable resource, our children. Tim Booth, 1150 W. Saddlehorn Drive, and General Manager of the Hilton El • Conquistador Resort, stated that he was in support of the Bed Tax distribution as studied and proposed. He stated that about a year ago, a group of regionally focused, economically-minded tourism experts started meeting to discuss how to make the Tucson area more competitive against other cities in Arizona. He stated that these cities currently spend double of what this area spends for its population size on tourism. He stated that he believed that most everyone understood that tourism is one of the major economic contributors to the region. He stated that increase in Bed Tax allocated to tourism and the support of the MTCVB was absolutely critical to the region and to the Hilton's continued success. Bill Adler, 10720 N. Eagle Eye Place, stated that the proposed Bed Tax distribution shows $237,000 as being allocated to the Naranja Town Site for programming, etc. He stated that before monies are allocated to the Town Site, the Town needs to revisit the allocation of space as he did not see a sufficient need for some items as represented in the Master Plan. He cautioned the Council to be careful about allocating monies until the Town was satisfied that the uses were clear and that they are economically viable and self-supporting, MOTION: Council Member Carter MOVED to APPROVE Resolution (R)05-35 amended as follows: 1) The allocation of expenditures covered by this Resolution after the effective date of the increase in the Bed Tax from 3% to 6% shall apply 08/24/05 Minutes, Council Regular Session 10 only to the current fiscal year, 2005-2006. 2) The allocation to the MTCVB for the current fiscal year shall be the lesser of $118,750 or 0.75% of the 3% collected prior to the increase to 6% plus 1% of the 6% collected for the balance of the year. 3) The allocation for Bed Tax rebate for the current fiscal year shall be as currently committed by the Hilton Economic Development Agreement. Estimated and budgeted to be $316,667. 4) The allocation to the Parks and Recreation facilities and services for the current fiscal year after start of the 6% rate shall be the lesser of $50,000 or 0.5% of the 6% collected. 5) The balance of the Bed Tax collections for the current fiscal year shall be allocated to the Naranja Town Site Development, estimated to be $152,000. 6) All Bed Tax allocations shall be subject to review and change in future fiscal years. Council Member Abbott SECONDED the motion. Vice Mayor Gillaspie stated that Item 2 of Council Member Carter's motion was confusing. He also questioned the logic of reducing money to Parks and Recreation and to the Naranja Town Site. He then pointed out that the only amount of money that is up for discussion is 1% out of the 6% and it is the only money that has not been previously allocated. Council Member Carter explained that the numbers are reduced because they reflect the end of the 2006 year so that would be for a maximum of six months. He stated that he had also based the numbers on the February 1, 2006 date. Further discussion followed regarding the allocation of the Bed Tax, earmarking 110 monies for the Naranja Town Site, looking at the Town Manager's suggestions for funding the Town Site, and the fact that there is just a .25% difference. MOTION FAILED, 2 — 4, with Mayor Loomis, Vice Mayor Gillaspie, Council Member Dankwerth and Council Member Parish opposed. In response to a question from Mayor Loomis, Community Development Director Brent Sinclair explained that the Master Plan for the Naranja Town Site presents a conceptual idea. He explained that the programming for the Site will define each element in the Master Plan (i.e. buildings, amenities, and square footage and foot prints of the buildings.) He explained that once the programming is completed, then a definite cost estimate can be developed. MOTION: Council Member Parish MOVED to APPROVE Resolution (R)05-35, allocating expenditure and distribution of the funds collected under the 6% Bed Tax as provided therein. He further moved to direct staff to prepare an Ordinance to change the effective date of the Bed Tax increase from February 1, 2006 to January 1, 2006. He also moved to direct staff to return with the input of the Parks and Recreation Advisory Board by November 1, 2005, with a priority list of parks and recreation needs to be funded as part of this allocation. Council Member Dankwerth SECONDED the motion. 08/24/05 Minutes, Council Regular Session 11 DISCUSSION: Council Member Parish thanked Vice Mayor Gillaspie for making the effort to improve the work previously done by him (C.M. Parish) and the Town staff. He also thanked the MTCVB for its willingness to become a partner with the Town and actually requesting a reduction in the amount of money proposed (1.5% to 1%.) He also stated that it is disturbing that misinformation has been represented that the Bed Tax would provide enough money to build the Naranja Town Site because it would not fund the millions of dollars needed. Council Member Parish also stated that there are commitments for some of the Bed Tax for the Town's Economic Development Agreements (EDAs). He stated that if the Town did not honor those, and if the Town abandons tourism, etc., it would prevent the Town's ability to make appropriate annexations and would limit the Town's ability to bring other economic drivers into the Town. AMENDMENT TO THE MOTION: At the request of the Mayor, Council Member Parish and Council Member Dankwerth agreed to delete the wording in the original Resolution that reflected "Effective Until 8/31/11" and make it until "6/30/07." Vice Mayor Gillaspie commented that the.proposed General Plan Update provides support to the resort and tourism business. He stated that the Town must start investing in tourism and giving support to economic efforts in the Town, as well as in the region. • 40 Mayor Loomis commented that the Town's agreement with the MTCVB is a performance based contract and they must provide data to the Town showing how they used the funds. By reviewing the allocations on an annual basis, it gives the Town the opportunity to make adjustments, if necessary. Council Member Carter stated that when you start dealing in percentages, the Town may be in a bind as other hotels, etc. come into the town. He stated that there are no percentages in the Town's Budget, we deal in sums. He stated that what we are dealing with is "1% which is one-sixth of the 6%, or 16.666% of the money that you have in your pocket." Council Member Abbott stated that she felt there was a great opportunity to have a direct impact on the community but this proposal falls short and does not meet the needs of the children and also, it does not really address maintaining and expanding small businesses in Oro Valley. She also stated that she would like to see some of the money for economic development earmarked and that more be spent locally. Mayor Loomis commented that the Economic Development Department will be presenting any and all proposed expenditures to the Council for approval. 08/24/05 Minutes, Council Regular Session 12 MOTION: Council Member Abbott MOVED to AMEND the motion to state that the $160,000 (p roposed Bed Tax allocation) be broken up as follows: $100,000 be dedicated towards Economic Development and that one-third of that money be spent for small business expansion and retention and that the additional $58,000 extra will be dedicated to Parks and Recreation for additional field space that is direly needed. Council Member Carter SECONDED the motion. Amendment to the motion FAILED, 2 —4, with Mayor Loomis, Vice Mayor Gillaspie, Council Member Dankwerth and Council Member Parish opposed. AMENDMENT TO MOTION: Town Attorney Melinda Garrahan clarified that Section 4 of the Resolution should reflect the date of January 1, 2006 and not February 1, 2006. Council Member Parish and Council Member Dankwerth agreed to amend the motion as such. MOTION AS AMENDED CARRIED, 4 — 2, with Council Member Abbott and Council Member Carter opposed. Mayor Loomis recessed the meeting at 9:32 p.m. The meeting resumed at 9:40 p.m. 9. 0V12-04-09 REQUEST FOR APPROVAL OF A PRELIMINARY PLAT FOR 33 SINGLE-FAMILY LOTS ON 35.77 ACRES LOCATED ON THE WEST SIDE OF LA CANADA DRIVE EXTENDED — SOUTH OF MOORE ROAD, PARCEL #219-49-0040 Carl Winters, Planning Resources, 1 N. Church Avenue, stated that they are requesting approval of a preliminary plat for 33 single-family lots on the West q g side of La Canada Drive extended. He reviewed the background of the property and an overhead map of the site. He then explained that the Development Review Board expressed concerns that some of the lot lines extended into the wash; however, many projects in Oro Valley have had lot lines that extend into the wash. He stated that the Town's Zoning Code allows such encroachment as long as there is a conservation easement recorded across those specific areas. Mr. Winters also explained that staff is requiring that all lots have a minimum of 12,000 square feet of gradable area to protect the riparian areas from use. Community Development Director Brent Sinclair reviewed the Council Communication and explained that the average lot size for the 33 single-family lots would be approximately 39,000 square feet with a range from 25,000 square feet to 80,000 square feet. He stated that the average density is .92 dwelling unitsp er acre which is well within the established zoning. He explained that at the time of rezoning, there were a number of conditions extended onto the plat as follows: 1) Permanent, wildlife-friendly fences shall be installed along the fifteen foot riparian apron, except where wash access is provided in common areas. MEMORANDUM DATE: December 15, 2005 TO: David Andrews, Asst. Town Manager FROM: Stacey Lemos, Finance Directo RE: PRAB Recommendations for Expenditure of Bed Tax Funds- Memo Dated 11/22/05 Per your request, I have reviewed the memo to Mayor Loomis from the Parks and Recreation Advisory Board dated 11/22/05 outlining the Board's recommendations for the expenditure of bed tax funds. I have also reviewed Resolution No. (R) 05-35 designating the allocation of the bed tax revenues for the period beginning January 1, 2006 through June 30, 2007. The PRAB memorandum includes a recommendation to upgrade three Parks positions from part-time status to full-time, totaling $24,900 for the remaining FY 2005-06. In addition, there are a number of capital items requested for purchase totaling $15,000 in the current fiscal year and $84,400 in FY 06-07. According to the wording in the Resolution, 0.50% of the 6% Bed Tax will be allocated to "Parks & Recreation Facilities/Services." This resolution also sunsets on June 30, 2007 requiring further consideration by the Town Council at that time. Although the resolution does not specifically address the expenditure of bed tax revenues for personnel costs, I would recommend restricting the expenditures to capital items and one-time expenditure type transactions, rather than dedicating this revenue source to the payment of ongoing full-time positions because this designation may change after June 30, 2007. I would also suggest that the capital items and improvements recommended in the memo still go through the Town's Capital Improvement Program evaluation process, with the caveat that there is a dedicated source of bed tax revenues to support these requests. Please let me know if you have any questions or need further information. r RESOLUTION NO. (R) 05- 35 A RESOLUTION OF THE TOWN OF ORO VALLEY, ARIZONA, ALLOCATING THE TOWN'S EXPENDITURE AND DISTRIBUTION OF FUNDS COLLECTED UNDER THE 6% BED TAX RATE IMPOSED ON TRANSIENT LODGING (BED TAX) FOR THE PERIOD FROM JANUARY 1, 2006 THROUGH JUNE 30, 2007; AND REPEALING ALL RESOLUTIONS OF THE TOWN OF ORO VALLEY IN CONFLICT THEREWITH. WHEREAS, Arizona cities and towns have the authority to levy taxes under ARS § 9- 240(B)(26); and WHEREAS, on July 13, 1988, the Town of Oro Valley adopted the Model City Tax Code ("Code") pursuant to Arizona law; and WHEREAS, amendments to the Code are required to be made in accordance with ARS § 42-6054; and WHEREAS,the Mayor and Town Council of the Town of Oro Valley upon review of the transaction privilege tax code determined that it was necessary to impose an increase in the tax rate for the rental, leasing and licensing for use of real property upon transient lodging, which tax is commonly known as a"Bed Tax"; and WHEREAS,the Town Council has increased the Bed Tax to 6%to promote the economic interest of the Town, to promote and facilitate local and regional economic development, and to further provide for the public health, safety and welfare of the residents of the Town of Oro Valley; and WHEREAS,to promote regional economic development the Town desires to allocate expenditure and distribution of the Bed Tax funds; and NOW, THEREFORE, BE IT RESOLVED by the Mayor and Town Council of the Town of Oro Valley, Arizona to allocate expenditure and distribution of the Town's 6% Bed Tax in accordance with the following table for the initial period as set forth in Section 4 of this Resolution. SECTION 1. Bed Tax Allocation to: Allocation Portion of 6% Estimated Annual Amount MTCVB 1.00% $ 158,333 Bed Tax Rebate Commitments 2.00% $ 316,667 Parks &Recreation 0.50% $ 79,167 Facilities/Services Naranja Town Site 1.50% $ 237,500 Econ. Dev. Marketing 1.00% $ 158,333 I I Total 6.00% $ 950,000 U:\My Docurnents\Oro Valley Bed Tax Revisions\Allocation of 6%Lodging Tax Resolution August 24 2005.doc SECTION 2. All Oro Valley Resolutions, or Motions and parts of Resolutions, or Motions of the Council in conflict with the provisions of this Resolution are hereby repealed. SECTION 3. If anysection, subsection, sentence, clause, phrase or portion of this S Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of jurisdiction,com etent such decision shall not affect the validity of the p remaining portions thereof. SECTION 4. This allocation of the expenditure and distribution of the Town's 6%Bed Tax shall begin on January 1, 2006 and end on June 30, 2007. PASSED AND ADOPTED by the Mayor and Council of the Town of Oro Valley, Arizona, this 24th day of August, 2005. Paul H. Loomis, Mayor ATTEST: Kathryn E. Cuvelier, Town Clerk APPROVED AS TO FORM: Melinda Gan. n, Town Attorney U:\My Documents\Oro Valley Bed Tax Revisions\Allocation of 6%Lodging Tax Resolution August 24 2005.doc TOWN OF ORO VALLEY STUDY SESSION COUNCIL COMMUNICATION MEETING DATE: JANUARY 11, 2006 TO: HONORABLE MAYOR & COUNCIL MEMBERS FROM: JEFFREY H. WEIR, CEcD ECONOMIC DEVELOPMENT ADMINISTRATOR SUBJECT: REVIEW AND CONSIDERATION OF AMENDMENT TO THE COMMUNITY ECONOMIC DEVELOPMENT STRATEGY (CEDS). SUM MARY: During the first part of 2005 the members of the Council appointed Think Tank met and discussed the future direction for Economic Development that the Town of Oro Valley should consider. The Think Tank members at the urging of the Council members were to "think outside of the box" and were encouraged to not limit their deliberations or recommendations to past actions and planning. One item that the Think Tank discussed at length was the existing Community Economic Strategy (CEDS). The Think Tank members have incorporated their recommendations to the CEDS in Attachment A. Onlythe pertinent areas, primarily the revised emphasis for Business Attraction, have been included in Attachment A. The Think Tank members have expressed that most of the original CEDS directions were and should remain as part of the Economic Development direction for the Town. In the Background section of the updated CEDS, second paragraph, it is recommended that Business Attraction efforts be recognized as two separate but equally important categories. The first category focuses on Income Generation businesses and the second category recognizes the importance of Quality of Life and Services. The recommended prioritized Business Attraction listing are: 1. Resorts, Destination Spa's and Tourism related businesses. 2. High-tech manufacturing and Research & Development. 3. Boutique Retail Shopping including Art Galleries and Restaurants. 4. Medical Services and support businesses. 5. Headquarters operations and professional services. 6. Performing Arts facilities/development of Oro Valley as a Regional Arts Center. TOWN OF ORO VALLEY STUDY SESSION COUNCIL COMMUNICATION PAGE 2 OF 2 7. Educational facilities (degreed programs and support efforts for existing businesses). 8. Hotels and Lodging facilities. ATTACHMENTS: 1. Attachment A. Town of Oro Valley Community Economic Development Strategy, (CEDS) November 2005 (Updated). 2. Attachment B. Existing CEDS document. FISCAL IMPACT: N/A JEFFREY H. WEIR, CEcD ECONOMIC DEVELOPMENT ADM. i j CHUCK SWEET TOWN MANAGER ATTACHMENT A TOWN OF ORO VALLEY COMMUNITY ECONOMIC DEVELOPMENT STRATEGY NOVEMBER 2005 (UPDATED) TOWN OF ORO VALLEY TOWN COUNCIL PAUL LOOMIS Mayor TERRY PARISH Vice-Mayor PAULA ABBOTT Councilmember K.C. CARTER Councilmember CONNY CULVER Councilmember HELEN DANKWERTH Councilmember BARRY GILLASPIE Councilmember - 2 - t � J TABLE OF CONTENTS Acknowledgements ... 4 Mission Statement ... 5 Background ... 5 Purpose ... 6 Business Attraction ... 6 - 3 — Acknowledgements The following persons were instrumental in the updating of the Town of Oro Valley's Community Economic Development Strategy. • Town Staff Participation • Chuck Sweet, Town Manager David Andrews, Assistant Town Manager Jeffrey H. Weir, Economic Development Administrator Karen Greenspoon, Economic Development Specialist Danielle Tanner, Senior Office Specialist THINK TANK Members Mr. Al Cook, Citizen-At-Large Mr. Bob Schwarz, SCORE Representative Mr. Chet Oldakowski, Stop Oro alley Outrageous Giveaways Mr. Erik Shapiro, Marketing & Market Research Mr. Gregg Forszt, Ventana Medical Systems, Inc. Ms. Kim Stine, Bank One/Finance sector Mr. Kit Donley, Commercial Real Estate Development Mr. Ray Paolino, Former State of New York Economic Development Mr. Rob LaMaster, Arizona Restaurant & Hospitality Association Mr. Paul Kappleman, CEO, Northwest Medical Center Hospital -- Oro Valley Invited Speakers/Guests Dr. Lay Gibson, Professor of Geography, U of A Mr. Ben Craney, Bourn Partners — Retail Tenant Broker Mr. Jeff Jones, Small Business Owner Mr. Alex Jacome, SAHBA Government Affairs Liaison Dr. Leo Shapiro, Marketing and Market Research Mr. Doug McKee, Resident Council member Conny Culver Council member Helen Dankwerth - 4— MISSION STATEMENT "To increase the quality of life for Oro Valley citizens and the business community by developing a positive business climate consistent with the community's values to ensure the long-term financial and economic sustainability of the Town of Oro Valley." Background During the past year the Mayor and Council approved the creation of an Economic Development focused amalgamation of local residents and business persons designated as the Think Tank. A major effort, as assigned by the Mayor and Council to the Think Tank, was a review of the existing Community Economic Development Strategy (CEDS) and recommendations for changes, if any, that are to be forwarded to the Mayor and Council. The recommendation(s) for changes to the CEDS are in the area of business attraction and retention. The consensus of the Think Tank was to recommend a different prioritization (emphasis) on business attraction efforts and a separation of business attraction into two separate but equally important categories: 1. Income Generation businesses that provide sales tax revenues and/or high paying employment opportunities for the residents of the Town, and are either direct revenue sources or secondary revenue source businesses; 2. Quality of Life and Services businesses wherein a direct and measurable Quality of Life benefit can be determined as expressed by existing residents of the Town. The Think Tank members expressed support for the following key elements and purposes contained within the 1997 Adopted CEDS: • Develop an economic development marketing plan. • Coordinate closely economic development activities and opportunities with surrounding municipal, regional and statewide organizations. • Develop and maintain a computer database inventory of available land and buildings. • Develop a fiscal impact analysis before initiating an annexation. • Develop an Economic Development Impact Analysis to be incorporated into the evaluation of significant development proposals. - 5— 1 Purpose The purposes of the Community Economic Development Strategy are as follows: • Implement the Goals and Policies of the Economic Development Element of the Town's General Plan. • Make the best use of limited resources in providing a focused economic development program for the community. • Link all development-related programs and strategies in a formal way. • Provide guidelines in decision-making to the Town's political and administrative leadership to achieve unity of purpose in the pursuit of economic development goals. • Attract new public and private resources to assist in carrying out the action steps contained in the CEDS. Business Attraction Emphasis. The Town will target the following list of tourism, high-tech manufacturing and research & development uses, and retail and service businesses for areas identified appropriate in the General Plan. 1. Resorts, Destination Spa's and Tourism related businesses. 2. High-tech manufacturing and Research & Development. 3. Boutique Retail Shopping including Art Galleries and Restaurants. 4. Medical Services and support businesses. 5. Headquarters operations and professional services. 6. Performing Arts facilities/ development of Oro Valley as a Regional Arts Center. 7. Educational facilities (degreed programs and support efforts for existing businesses). 8. Hotels and Lodging facilities. - 6— ATTACHMENT B TOWN OF ORO VALLEY COMMUNITY ECONOMIC DEVELOPMENT STRATEGY SEPTEMBER 1997 TOWN OF ORO VALLEY TOWN COUNCIL PAUL LOOMIS Mayor PAUL PARISI Vice-Mayor CHERYL SKALSKY Councilmember RICHARD JOHNSON Councilmember FRANCIS CABALA Councilmember TABLE OF CONTENTS Acknowledgements ... 4 Mission Statement ... 5 Background ... 6 Scope and Organization ... 7 Purpose ... 8 Action Steps ... 8 Town of Oro Valley-Assistance for Economic Development ... 13 Challenges and Vision for the Future ... 13 Appendix Economic Development Partners — Programs and Assistance ... 16 Economic Development Contacts ... 22 TABLE 1 - GTSPED Targeted Industries ... 23 - 3 — Acknowledgements The following persons were instrumental in the development of the Town of Oro Valley's Community Economic Development Strategy. Economic Development Plan Task Force Cheryl Skalsky Mayor Kit Donley Pro L.A.N.D. Dennis Douglas Chairman, P&Z Commission Melissa Franklin Educator, Amphitheater School District Patti Jo Lewis Development Review Board Richard Maes Vistoso Partners Michaele Ann Melton El Burrito Patio Restaurant Patty Morris Tucson Electric Power Oscar Rothenbuecher P&Z Commission Mark Weinberg Diamond Management Town Support Staff Chuck Sweet, Town Manager Norm Phillips, Economic Development Administrator David Andrews, Finance Director Don Chatfield, AICP, Planning & Zoning Director Bryant Nodine, AICP, Senior Planner 4— MISSION STATEMENT "To increase the quality of life for Oro Valley citizens and the business community by developing a positive business climate consistent with the community's values to ensure the long-term financial and economic sustainability of the Town of Oro Valley." - 5- Background During the past year there has been a concerted effort on the part of Town and private individuals to develop an organized plan of action for economic development in Oro Valley. Oro Valley leaders have begun to realize that resources available for economic development are being depleted. The limited commercial and industrial lands are rapidly being developed. Also, the demand for municipal services creates an incentive for the Oro Valley community to establish a stronger commercial/industrial tax base in order to keep local taxes at a minimum. In July 1996, the Town adopted the Focus 2020: Oro Valley General Plan, which included an Economic Development Element. A key policy (3.1A) in the Economic Development Element of the Plan states: "Economic Development touches everyone and everything within a community. Policies made now will have substantial impacts on the future. They will determine the services a town can provide to its residents and the quality. To ensure that future growth reflects the desires of the community in balance with an analysis of the Town's financial needs, a Strategic Plan for Economic Development will be detailed to ensure that future development will complement community values and work toward implementation of the community's economic vision for the future." The development and use of an economic development strategy was deemed to be an important step in providing for implementation of the General Plan Goals and Policies. Without a strategic plan for action, the implementation of the General Plan Goals and Policies would likely be sporadic, uncoordinated, poorly timed and inefficient. With a strategic or action plan for economic development the Town can make the best use of limited resources in providing a focused economic development program for the community. A statement in the Economic Development Element of the General Plan says it best; "The success of the General Plan is measured by how well the plan is implemented." Important actions called for in the General Plan Element include: • Appoint an Economic Development Task Force to work closely with the Economic Development Administrator (EDA) to develop a Strategic Plan. • Develop an economic development marketing plan. • Coordinate closely with surrounding municipal and regional as well as Statewide organizations. • Develop and maintain a computer database inventory of available land and buildings - 6— • Develop a fiscal impact analysis before initiating an annexation. • Develop an Economic Development Impact Analysis to be incorporated into the evaluation of significant development proposals. • Initiate the design of thematic entry monuments at key entry areas to Oro Valley. One purpose of an economic development strategy is to organize and implement these and other actions necessary to provide for an effective economic development effort. The second action item suggested in Economic Development Element was the appointment of an Economic Development Task Force to work with the EDA in developing a Strategic Plan. The Economic Development Task Force was appointed by the Town Council in August of 1996 to coordinate the completion and adoption of a strategic plan. The first Task Force meeting was held in October of that year. Care was taken to include members which represented various major groups within the community, i.e., small business, developer, land owner educator, utilities, home owner, etc. The Task Force met monthly from October of 1996 through August 1997. The Town Manager, the Economic Development Administrator, the Finance Director and the Planning and Zoning Director facilitated the meetings. In September 1997, the strategic plan document was completed and sent to the Town Council for implementation. Scope and Organization This document is designed to bring together under one cover the existing and planned strategies and programs into an overall community economic development strategy for the Town of Oro Valley. The name of this plan is the Town of Oro Valley Community Economic Development Strategy (CEDS). - 7— Purpose The purposes of the Community Economic Development Strategy are as follows: • Implement the Goals and Policies of the Economic Development Element of the Town General Plan. • Make the best use of limited resources in providing a focused economic development program for the community. • Link all development-related programs and strategies in a formal way. • Provide guidelines in decision-making to the Town's political and administrative leadership to achieve unity of purpose in the pursuit of economic development goals. • Attract new public and private resources to assist in carrying out the action steps contained in the CEDS. Action Steps (1) Establish an Action Program and operating budget for the Economic Development Administrator (EDA). The EDA will work with the Finance Director and Town Manager to develop an action program and operating budget for one year and operating guidelines for a three-year program (subject to refinement). This program & budget will provide the general framework in which the EDA is expected to operate and is based on activities needed to implement the Economic Development Element of the General Plan. The one-year program will provide a focused scope, while the three-year program provides the broader operating context. This process of developing the one and three-year program is advanced by one year and updated. (2) Insure that adequate funding resources are available to implement the action steps contained in this document. The EDA and the Finance Director will work with the Town Manager and Town Council to assure that adequate funding is available to carry out the action steps contained in the Economic Development Strategic Plan. - 8— (3) Pursue private, county, state and federal funding sources. The EDA will seek out available funding from various sources including the private sector and various governmental agencies. (4) Develop and implement a Business Retention Program. A retention program will be developed which provides for regular visits by Town staff to Oro Valley businesses. A survey will be utilized and information summarized at the end of each year and an annual report produced. The report will be used to analyze and evaluate Town services, development trends and other information relating to the business community. The report will be presented each year to the Town Council. (5) Monitor expansion plans of businesses in the community. In conjunction with the Business Retention Program, the EDA will closely monitor the expansion and relocation plans of businesses in the Town. The EDA will assist expanding businesses with their plans and help to expedite the development review and construction process. (6) Work with appropriate agencies in assisting local business and retaining local companies in Oro Valley. The EDA will work with the Greater Oro Valley Chamber of Commerce, Greater Tucson Economic Council (GTEC), the Industry Network Corporation (INC), Pima County's Business Assistance Center, the Pima Community College Small Business Development and Training Center and the Arizona Department of Commerce in assisting local businesses and retaining local companies in Oro Valley. (7) Work to attract retail development in the community by maintaining regular contact with the development community. The EDA will maintain regular contact with landowners, real estate professionals, and developers in order to attract new retail development to the Town. Contact with the retail community will be facilitated through attendance at meetings and conferences of the International Conference of Shopping Centers (ICBG) to secure new prospects and network with retail professionals. (8) Streamline the development review process. The EDA will work with the Town Development Review Ad Hoc Committee and Town staff to streamline the development review process. A procedure will be - 9— developed to expedite the permit process in response to development requests of significant importance to the Town image, tax base or employment base. (9) Create and foster a positive image Create a positive image for the Town and use that image in marketing plans to promote Oro Valley in industries such as retail, manufacturing and tourism. Specific action steps are: • Complete an Identity/Image study for the community. • Use the study in developing marketing plans for retail, light industry and hospitality and tourism industry attraction. • Work with the Town Council and other appropriate groups to develop and enhance a sense of community identity through landscape and design themes/treatments at entryways to the Town or along major road corridors. • Work with the Town Council, Arts Board, Public Works Department and the Arizona Department of Transportation (ADOT) to provide directional signage to Oro Valley along the 1-10 freeway and State Routes 77 and 89. • Work to establish the Town Hall Complex and surrounding vicinity as the "Town Center" of Oro Valley and work to establish this site as the focus and identify for the community. • Promote Oro Valley as progressive, on the move, properly staffed and favorably disposed to accommodate the need of new retail, high tech industry and resort and tourism developments. • Portray Oro Valley as a quality place to live, work, shop and recreate. Demonstrate the commitment of Town officials to accommodate commercial and industrial developments, which contribute to the community's identity. • Reinforce the competitive strengths of Oro Valley as a place for business, capitalizing on the unique recreational opportunities and desert and mountain beauty, highly educated citizens, high median income and rapid growth. (10) Work with regional organizations to improve the image of the Town in the development community. Work with regional organizations such as the Greater Tucson Economic Council (GTEC), Metropolitan Tucson Convention and Visitors Bureau (MTCVB) and the Greater Oro Valley Chamber of Commerce in developing the Town image. Work with such organizations to improve the image of the Town within the development community. (11) Develop a strategy to encourage northern Town and unincorporated area residents to shop and do business in Oro Valley. It is recognized that it is important to provide nearby shopping opportunities for those Town residents in the Rancho Vistoso section of the Town and citizens north of Oro Valley. This area has significant economic potential and should be included in the Town Marketing Plan. - 10— (12) Develop and adopt a Business Incentive Policy The Town may from time to time wish to use some form of incentives to attract or retain desirable businesses. Guidelines and review criteria will be established to assist the Town in deciding when to grant such incentives. (13) Develop a computerized Fiscal Impact Analysis The EDA will develop a computerized fiscal impact analysis for use in measuring the benefit of specific development, rezoning or annexation to the community. (14) Develop and maintain a Database Inventory The EDA will develop and maintain a computer database of available land, buildings and lease space. (15) Develop and Maintain an Oro Valley Business Directory Develop a Business directory as part of an effort to retain retail dollars in the community and encourage residents to use Oro Valley services. (16) Develop Economic Development Web pages Develop Economic Development Web pages on the Internet, including a retail, industrial /office and general information and demographics page. The existing Oro Valley tourism page will be updated. (17) Work to increase the number of tourists, both seasonal and year round, that come to Oro Valley. Work with the MTCVB, the GOV Chamber of Commerce and the Sheridan El Conquistador to increase the number of tourists that come to the area. (18) Work to attract uses which support the hospitality/tourism industry. These uses include retail businesses such as hotels and restaurants, which generate sales and bed tax revenues for the Town. (19) The Town will target the following list of retail, tourism and industrial uses for areas identified appropriate in the General Plan. These targeted uses meet one or more of the following criteria: • High paying jobs • Strong projected job growth • Underrepresented in the Oro Valley market - 11 — Retail * • Furniture & Home Furnishings • Big-box Discount Stores • Restaurants • Drugstores • Movie theaters • Clothing stores Tourism • Resorts • Hotels/motels • Driving range Office • Corporate headquarters/regional headquarters • Back-office facilities • Health services • College, institutions • Professional offices Services • Dry Cleaning • Insurance services • Banking and credit institutions • Insurance Agencies • Investment Services Industrial The Town will target the Greater Tucson Strategic Partnership for Economic Development (GTSPED) selected industries** as described in the Greater Tucson Strategic Economic Development Plan, July 1996 (see Table 1). • Well-designed specialty retail developments (such as Saint Phillip's Plaza in Tucson) are much-preferred over strip commercial projects. * * A group of industries under the group heading "Fabricated Metals/Industrial Machinery & Equipment" has been not been included due to incompatibility with the Town General Plan. (20) Work with appropriate agencies in developing industrial/office leads and prospects. The EDA will work with the GOV Chamber of Commerce, GTEC and the Arizona Department of Commerce in developing industrial/office leads and prospects. - 12— This will include coordination on marketing materials and attendance at relevant events, trade shows, conferences and prospecting trips. (21) The status of the Economic Development Plan will be reviewed annually by Town officials. The EDA will review the Economic Development Strategic Plan annually with the Finance Director and Town Manager. Appropriate modifications will be brought forward to the Town Council for adoption. An annual status report will be prepared and presented to the Council reviewing progress on completion of the action steps identified in the Strategic Plan. Town of Oro Valley-Assistance for Economic Development Local governments in the Tucson regional area, individually or in association, promote local and regional economic development. The state grants municipal governments, such as Oro Valley, the power to engage in economic development. These powers allow the Town to provide the leadership, energy and perspective to bring together the different segments of the community. Guidelines for the Town use of assistance for business location or expansion are outlined In the Town of Oro Valley Economic Development Incentive Policy. Challenges and Vision for the Future The economic and physical transformation of Oro Valley will occur as a result of a combination of physical, political and socio-economic factors which will influence the direction of growth and development in the years to come. External and internal forces influencing growth in Arizona and the region will filter down to Oro Valley, generating impacts in its economy that are difficult to predict. The Town economy evolved as a result of the work of early pioneers who conquered the desert after harnessing water and energy resources. Later, with the advent of World War II, a diversified industrialization process began to take place. This along with large population immigration, created by workers coming to take jobs in new area industries, has transformed Oro Valley into the fastest growing town or city in the State of Arizona. Economic growth and development in the region evolved, until recently, without the guidance of comprehensive planning, fueled primarily by speculative forces and population immigration. Planning the future economic and physical growth of the Town, which is closely tied to the City of Tucson and the region, poses many challenges. To be beneficial, economic development must not only help create wealth, it must also generate community benefits and be consistent with the - 13— unique character of the Town. A statement at the beginning of the Economic Development Element of the General Plan put this in perspective: "Oro Valley's economic future is interwoven with its distinctive character based on a residential/resort image and its proximity to the Pusch Ridge Wilderness, Coronado National Forest and Catalina State Park. Diversification in the local revenue base, encouraged through additions to employment and shopping opportunities, is desirable. However, any new development must be consistent with the community's vision for the future and values." The Town Council and staff will continue to work diligently to carry out this vision. - 14 APPENDIX - 15- Economic Development Partners — Programs and Assistance Success in economic development is best achieved through cooperation with a number of local, regional and State agencies and groups. The following is a discussion of the most important of these organizations and what they provide in the way of programs and assistance for economic development. Arizona Department of Commerce (ADOC) Economic development was an elusive function in Arizona until recently. At the initiative of a variety of individuals and organizations, the State Legislature enacted the Omnibus Economic Development Act in 1989, directing the Department of Commerce to assess Arizona's business climate and draft the first statewide strategic economic development plan. This effort culminated in the design and publication of Arizona's Strategic Plan for Economic development (ASPED) in October 1992. To implement ASPED, the Governor's Strategic Partnership for Economic Development (GSPED) was established. GSPED identified ten key economic clusters upon which to build and expand Arizona's future economy. 1. Bio-industry 2. Optics 3. Environmental Technology 4.. Software 5. Food, Fiber & Natural Products 6. Tourism and Experience 7. High Tech Industry 8. Transportation 9. Mining & Minerals 10. Senior Living As defined by ASPED, an economic cluster is a geographic concentration of competitive firms in related industries that do business with each other. Clusters include companies that sell inside and outside of the region as well as support firms that supply raw materials. These become magnets for companies to locate in an area and create a spawning ground for start-up companies. Also, these create large, diverse pools of experienced workers; attract suppliers who tend to congregate in their vicinity for increased efficiency; and foster a competitive spirit that stimulates growth and innovative strategic alliances. The activities of GSPED will be of benefit to the economic growth of Oro Valley. In particular, those related to the High Tech Industry, Optics, Tourism and Experience, and Senior Living. - 16— The Arizona Department of Commerce is the key agency responsible for marketing and promoting the economy of Arizona while providing support to GSPED in implementing cluster initiatives. In 1993, the National Marketing Division of the ADOC aligned its recruitment efforts with GSPED. Their marketing representatives were each assigned specific GSPED industry groups. The Department of Commerce approach has been to emphasize the non-urban areas in their recruiting efforts. Leads and prospects considering the Tucson or Phoenix metro areas are turned over to the corresponding regional agency (GTEC or G P EC). While recruitment prospects are turned over to GTEC and not to Oro Valley, a number of important incentives are made available to the Town by the ADOC. • The Commerce and Economic Development Fund The Arizona Legislature established the Commerce and Economic Development Commission (CEDC) to help expand economic opportunities in the state. A CEDC fund capitalized yearly with a percentage of lottery proceeds was established by the Legislature to help retain, expand, and relocate businesses to Arizona. The CEDC funds are administered by ADOC. Direct loans, loan guarantees and interest rate subsidies are directed by the CEDC to businesses. Priority consideration is given to businesses seeking to relocate and expand in rural and economically disadvantaged areas and to minority and women owned business. The allocations are made on a first-come first-served basis. • Work Force Recruitment and Job Training Program The Arizona State Legislature established the work force recruitment and job- training fund in 1993 to provide customized training to firms that create new jobs in Arizona and to businesses that undergo economic conversion. Grants are administered by ADOC and offered to financially sound for-profit enterprises. Those firms identified within the GSPED clusters receive priority consideration. The grants cover the cost of recruitment, screening, assessment, interviewing, materials design, and training costs, among others. Training is provided through established community colleges, or private post-secondary educational institutions, or other qualified providers, as requested by the company. • The Arizona Business Connection This program is operated through the ADOC and provides assistance in business expansion, relocation and start-ups. The office is a resource for information regarding licensing, permits, applicable taxes, applicable regulations, and financial referrals to local, state and federal agencies, as appropriate. Small businesses established in the Planning Area can access and benefit from these programs. - 17— • Private Activity Bonds Private Activity Bonds can be issued for industrial, manufacturing facilities, and equipment. The Town of Oro Valley or the Pima County Industrial Development Authorities can issue these bonds. • Revolving Energy Loans Under this program, qualified Arizona companies can receive financial assistance for long-term, fixed-asset plant expansions for the manufacture of energy-conserving products and energy-conserving building retrofits, including the acquisition of qualified energy-conserving improvements and equipment. • Environmental Technology Tax Incentive Program The State of Arizona offers tax credits and exemptions to companies that invest $20 million over five years in manufacturing technology that produces goods from recycled materials and renewable energy. • Defense Restructuring Assistance Program Under this program, defense contractors can receive individual and corporate tax credits for conversion of defense activities to commercial activities. • Economic Strength Fund This program approved by the Arizona State Legislature provides private non- profit and/or local government financing for highway or road projects which retain or significantly increase jobs in Arizona, or which lead to significant capital investment, or which make a significant contribution to the economy of the State. • Arizona Enterprise Development Corporation (AFDC) Loan Programs AEDC offers several types of Small Business Administration (SBA) Guaranteed Loans to small businesses including: SBA 504 and SBA 502 fixed asset subordinated loans, SBA 7A working capital and debt refinance, and bridge loans for land, building acquisition, inventory or equipment. • Rural Economic Development Initiative (REDI) Program This program, a part of ADOC Community Assistance Services, offers specialized services and funding assistance in the form of matching grants to rural communities. The communities use the assistance to maintain viable economic development programs and to make themselves more attractive for capital investment, industrial expansions and business locations. - 18— • Community Facilities Districts Arizona's Community Facilities District Act, allows a landowner or a group of landowners to request by petition that a municipality establish a community facilities district within the city limits to finance and construct public infrastructure and facilities. The district provides developers and cities with a new and flexible mechanism to deal with the rising costs of new community facilities. Several financial options are available to construct and maintain infrastructure, including: General Obligation Bonds, Revenue Bonds, Special Assessments and Assessment Bonds, Uses Fees and Charges, Municipal and Private Contributions. The type of projects that could be funded include: water and sewerage storage, flood control and drainage, lighting and traffic control, streets and parking, police and fire facilities, public buildings, school sites and facilities, parks and recreation among others. • Other Programs: Other Arizona programs that may offer potential for economic development are those offered through the Department of Environmental Quality (DEQ) Revolving Loan Funds, the Arizona Department of Tourism and the Arizona Film Commission. Federal Over the years, the Federal Government has introduced a vast array of programs that local jurisdictions can use to improve their economies and neighborhoods. These programs range from specific development projects for rural and urban development to job training. While the breath and funding of federal programs is always subject to changes in national policy and emphasis in Washington D.C., local communities can make themselves aware of opportunities and where possible, participate in those programs. The following is a list of federal programs and agencies that offer the most potential to promote development in concert with the attributes of the Planning Area. • Small Business Administration Loans These loans are offered through the state of Arizona. • The Rural Economic and Community Development Service, and the Consolidated Farm Services Agency, formerly the Farmers Home Administration (FmHA) provides a vast array of programs including guaranteed loans and grants to rural areas for water/wastewater facilities, community facilities (e.g. fire and rescue or health facilities, schools), business and industrial loans. - 19— • Economic Development Administration (EDA) Public Works Grants The EDA programs are directed to the funding of public works and development facilities that contribute to the creation or retention of private sector jobs and to the alleviation of unemployment and underemployment. For example, EDA funds could facilitate the construction of an industrial park in Oro Valley. • Community Development Block Grants (CDBG) Oro Valley is not an entitlement jurisdiction and relies on Pima County for CDBG funding (see below). Pima County • CDBG Funds Entitlement funds received through the US Department of Housing and Urban Development are utilized to support community and economic development activities in the Town of Oro Valley. These funds are received through the Pima County Entitlement Program and may be used by the Town for economic development projects, public works, community facilities, public services and planning. • Pima County Industrial Development Authority The IDA was established by Pima County to facilitate financing through the issuance of tax exempt private activity (industrial revenue) bonds for manufacturing, infrastructure and medical developments. These bonds are generally limited to land, building and equipment for manufacturing purposes and they are capped at $10 million. The proceeds from the sales of bonds are made available to finance projects through loans, leases or installment sales agreements with private credit-worthy companies. Payments are used to pay the principal and interest on the bonds as they become due. Interest rates are normally three to four percent lower than those charged through conventional borrowing. Greater Tucson Economic Council (GTEC) The Town contracts with GTEC to provide national and international marketing activities for the region. GTEC receives and markets sites in the area to prospects passed onto them from the Department of Commerce and also prospects developed through the group's own marketing efforts. - 20— The membership dollars provided to GTEC from Oro Valley and other towns and organizations in the Tucson area help improve the business climate, and attract new employers to the area. Metropolitan Tucson Convention and Visitors Bureau (MTCVB) This organization receives funding from public agencies such as the Town of Oro Valley and from a number of Tucson area corporate sponsors (especially those in the hospitality industry). The activities result in bookings of hotel rooms and conventions with the impact of several million dollars each year to the local economy. Greater Oro Valley Chamber of Commerce The Chamber provides a local network for the exchange of ideas between the business community and the Town. Also the Town has worked jointly with the Chamber on a variety of economic development issues and projects. Tucson Electric Power Company (TEP) TEP works with the Town and other economic groups to provide assistance to companies in the area of business attraction, expansion and retention. The Economic Development Section of TEP provides various forms of assistance including power information, sharing of lead information and in certain cases rate reductions for firms considering expansion or location in the Pima County area. Private Sector One of the most critical pieces in the puzzle, fundamental to the building of foundations for economic development is the private sector. The private sector consists of local lenders, developers, investors, builders and contractors, professionals, chambers of commerce, professional and business associations and the utilities. Non-profit Sector Another key sector in economic development is the non-profit sector. The non- profit sector includes colleges and local universities, community based organizations, economic development corporations, neighborhood groups and private foundations. This sector is an important source of both training and funding for economic development programs and projects. - 21 — ECONOMIC DEVELOPMENT CONTACTS Chuck Sweet, Town Manager 297-2591 Norm Phillips, Economic Development Administrator 297-2591 David Andrews, Finance Director 297-2591 Don Chatfield, Planning & Zoning Director 797-9797 David Hook, Town Engineer 797-2442 Bob Maassen, Building Official 797-9096 - 22— t M TOWN OF ORO VALLEY 3 STUDY SESSION COUNCIL COMMUNICATION MEETING DATE: JANUARY 11, 2006 TO: HONORABLE MAYOR & COUNCIL MEMBERS FROM: JEFFREY H. WEIR, CEcD ECONOMIC DEVELOPMENT ADMINISTRATOR SUBJECT: REVIEW AND CONSIDERATION OF AMENDMENT TO THE ECONOMIC DEVELOPMENT INCENTIVE POLICY GUIDELINES. SUMMARY: During the first part of 2005 the members of the Council appointed Think Tank met and discussed the future direction for Economic Development that the Town of Oro Valley should consider. The Think Tank members at the urging of the Council members were to "think outside of the box" and were encouraged to not limit their deliberations or recommendations to past actions and planning. One item that the Think Tank discussed at length was the use, form and continuation of the existing Economic Development Incentive Policy Guidelines. Attachment A, Town of Oro Valley Economic Development Incentive Policy Guidelines, indicates all of the recommended changes from the Think Tank and in one instance a change required by statute. Attachment B is a redacted copy of Attachment A. Attachment C, Current copy of the Town of Oro Valley Economic Development Incentive Policy Guidelines, is the current policy. I have also enclosed Attachment D, Resolution NO. (R) 99-79 that will require rescission when the Council formally acts to amend or change the Economic Development Incentive Policy Guidelines as this action was overlooked when the guidelines were revised the last time. The following describes the recommended changes from the Think Tank and as a result of new legislative action: 1. POLICIES. a. The addition of"fiscal impact" stresses the importance of this as a primary test threshold for consideration of the approval of an incentive. b. The inclusion of"meaningful employment opportunities and economic sustainability" recognizes the added importance of non-revenue producing businesses, such as high- tech employers, that the Council may wish to include in future considerations. c. The addition of the second paragraph adds language that recognizes the new State of Arizona statute which requires verification from an Independent Third Party to verify the benefits to the Town outweigh the benefits to the Developer. TOWN OF ORO VALLEY STUDY SESSION COUNCIL COMMUNICATION PAGE 2 OF 3 2. Paragraph #1. Original paragraph recommended for removal based on the belief 9 • that the language was redundant and unnecessary. 3. Paragraph h #2. The intent of adding "or business" was to provide the flexibility for the Council to consider the use of incentives for a unique business. 4. Paragraph #3. The additional language recommends that there be a single ten year 9 period (maximum time eriod for new project specific revenue sharing) that is established p either by the initiation of the first phase (if there are multiple phases) or by a Council determined milestone date or event. 5. Paragraph #6. Wording added for clarity only. 6. Paragraph Para h #7. Stronger wording added to make clear that all investment in commercial projects "shall" be provided by the private sector. 7. Paragraph #8. a. Original Paragraph # 9 recommended fro removal as the same (or almost same) 9 statement is made in POLICIES section. b Wordingchanges reflect the importance of consideration of the Town's financial goals as well as strategic goals. 8. Paragraph #10. Expanded the previous focus on retail development at the community or 9 regional retail level to include "a single business" , i.e.; a high-tech business or a single purpose retail business, which provides the opportunity for the Council to act to consider some form of incentive, if so desired, for important businesses other that. 9. Paragraph Para h #11. This is a new paragraph and emphasizes encouraging the establishment of high end retail stores and/or high revenue generating operations. 10. Paragraph #12. Reworded for the purpose of clarity only. 11. Paragraph #16. This paragraph is added to provide some examples of non-revenue sharing incentives which the Council MAY want to consider. TOWN OF ORO VALLEY STUDY SESSION COUNCIL COMMUNICATION PAGE 3 OF 3 ATTACHMENTS: 1. Attachment A — Recommended changes from the Think Tank to the Town of Oro Valley Economic Development Incentive Policy Guidelines. 2. Attachment B — Redacted copy of Attachment A. 3. Attachment C — Copy of the current policy for the Town of Oro Valley Economic Development Incentive Policy Guidelines. 4. Attachment D — Resolution NO. (R) 99-79. FISCAL IMPACT: N/A JEFFREY H. WEIR, CEcD ECONOMIC DEVELOPMENT ADM. 7 )/ 1. / CHUCK SWEET TOWN MANAGER ATTAC H M E 1\1-T-- A TOWN OF ORO VALLEY ECONOMIC DEVELOPMENT INCENTIVE POLICY GUIDELINES (RECOMMENDED REVISIONS) GOAL: To provide the Town Council a set of guidelines that assist in the retention of targeted businesses and the attraction of new or expanding targeted businesses to the Town of Oro Valley resulting in the diversification of the existing tax base and the creation of employment opportunities. POLICIES: In certain cases the Town may consider using some form of incentives in order to attract or retain targeted businesses. These incentives will only be used when the Town satisfies itself that the addition of the new business or retention and/or expansion of an existing business would have a significant, positive effect fiscal impact on the Oro Valley economy. The need for diversification of the local economy is a necessity. This policy places a priority emphasis on new and existing businesses that generate significant sales tax revenues, meaningful employment opportunities and economic sustainability. As a guideline the following listing can be viewed as a prioritized preference: 1. Resorts, 2. Retail, 3. Other Lodging, 4. High Tech Job Creation, and 5. Service Providers. In all instances wherein an incentive and/or inducement is considered the Town MUST employ an independent third party qualified to verify: 1. That the proposed tax incentive is anticipated to raise more revenue that the amount of the incentive within the duration of the agreement; and 2. That in the absence of a tax incentive, the retail business facility or similar retail business facility, not currently located within the Town limits nor under consideration to be annexed into the Town,would not locate in the Town in the same time, place or manner. (ARS Section 9-500.11). The following general provisions shall be considered prior to offering incentives. existing business is desirable. • • operation to the Town of Oro Valley. (Original paragraph #1 recommended for removal). 1. A high priority should be placed on the businesses "targeted" in the Community Economic Development Strategic (CEDS) Plan as amended by recommendations form the Think Tank (It is anticipated that the amended CEDS will be formally updated by the Mayor and Council in January 2006). 2. The project will have a substantial positive economic impact on the community, i.e.; the number of jobs created or the sales tax created by the project in the long-term will offset the short-term costs offered by incentives. Additionally, the project or business will be of such size or consequence to produce significant employment or sales in related sectors. 3. Incentives should not continue for more than a ten (10) year period including multi- phased projects, i.e.; the ten year period is inclusive from the first year of the first phase, regardless of planned future phases, or from any "milestone date or event" as determined by the Town Council. The project developer may request an extension of the ten year time limit or milestone date or event to the Town Council. This request must be based solely on some event or occurrence that is/was "beyond Control of the Developer/Owner". 4. An emphasis should be placed on firms that provide diversification(within targeted industrial or commercial sectors)to the Town's economy. 5. The Town will not buy land or existing buildings or construct buildings for purely private objectives. The Town's position should be to offer incentives that have a relationship to public benefit. Improvements such as streets, water lines, traffic signals, storm drainage, parking structures, parks and open space, and similar publicly assessed improvements are examples of public-private financed incentives. Acquisition of property and construction of buildings, if necessary,must be related to a public purpose. 6. The dollar amount of the incentives offered shall not exceed the cost of the project considered nor shall the incentive value be more than 50% of the new revenues that the project could reasonably expect to return in benefits to the Town within a ten year period as defined in paragraph three (3) above. 7. Private dollars shall be utilized whenever possible to up-front identified project costs :-=_-- : ----_f___f -_-- --=-_-----: --- =------- --•-= - - - - _-__._-='• --_= --- --=---- • 8. (Original paragraph #9 recommended for removal) In certain instances incentives may be offered in conjunction with financial goals and annexation activities which are viewed as financially and strategically important to the Town. In the ease of large-scale development areas, incentives should be combined with a community facilities district, - - - -------------- 9. The intangible or unmeasurable benefits of a business to a community, such as the location of a headquarters facility, enhancement of attractiveness to other similar businesses or suppliers, or other similar image-related items are also very important and should be considered along with other factors when making decisions on incentives. 10. Generally Retail projects which qualify should generate significant sales tax revenues similar to projects normally identified at a community or regional shopping center levels or if a single business, show a clear positive financial benefit to the Town. 11. The use of retail sales tax sharing shall be used as a "pass-thru" tool to encourage earlier establishment of high end stores and/or high revenue generating retail operations in any single project. 12. (This sentence reworded for clarity). The use of incentives must be linked to performance criteria. By policy the Town of Oro Valley will not expend public funds prior to development of any commercial project. 13. New Retail development should have an emphasis on meeting a need not currently being filled in the community, or providing a higher level of service/goods/products than presently available, or providing similar services in an area not currently being served. 14. Final authority for any approval of the use of an incentive and/or inducement rests solely with the Town Council. 15. Each action is separate and independent from all other actions associated with the approval of the use of an incentive and/or inducement. 16. Non-revenue sharing incentives (As recommended by the Think Tank)which may be considered would include: a. Reduction of impact fees; b. Reduction of building permit fees; c. Reduction of water connection fees; and d. Extension of the Project Team approach that has been successfully used for larger development projects to any project identified by the Council. The above suggested incentives will need to be addressed from a legal and fairness consideration due to the nature of creation (impact fees) and bonding requirements (water connection fees). Staff will include an analysis with each request for a consideration by an applicant to the Mayor and Council. ATTAGHMENT B TOWN OF ORO VALLEY ECONOMIC DEVELOPMENT INCENTIVE POLICY GUIDELINES (RECOMMENDED REVISIONS - REDACTED) GOAL: Top rovide the Town Council a set of guidelines that assist in the retention of targeted businesses and the attraction of new or expanding targeted businesses to the Town of Oro Valley resulting in the diversification of the existing tax base and the creation of employment opportunities. POLICIES: In certain cases the Town may consider using some form of incentives in order to attract or retain targeted businesses. These incentives will only be used when the Town satisfies itself that the addition of the new business or retention and/or expansion of an existing business would have a significant, positive fiscal impact on the Oro Valley economy. The need for diversification of the local economy is a necessity. This policy places a priority emphasis on new and existing businesses that generate significant sales tax revenues, meaningful employment opportunities and economic sustainability. As a guideline the following listing can be viewed as ap rioritized preference: 1. Resorts, 2. Retail, 3. Other Lodging, 4. High Tech Job Creation, and 5. Service Providers. In all instances wherein an incentive and/or inducement is considered the Town MUST employ an independent third party qualified to verify: 1. That the proposed tax incentive is anticipated to raise more revenue that the amount of the incentive within the duration of the agreement; and 2. That in the absence of a tax incentive,the retail business facility or similar retail business facility, not currently located within the Town limits nor under consideration to be annexed into the Town, would not locate in the Town in the same time, place or manner. (ARS Section 9- 500.11). The following general provisions shall be considered prior to offering incentives. 1. A high priority should be placed on the businesses "targeted" in the Community Economic Development Strategic (CEDS) Plan as amended by recommendations form the Think Tank (It is anticipated that the amended CEDS will be formally updated by the Mayor and Council in January 2006). 2. The project will have a substantial positive economic impact on the community, i.e.; the number of jobs created or the sales tax created by the project in the long-term will offset the short-term costs offered by incentives. Additionally, the project or business will be of such size or consequence to produce significant employment or sales in related sectors. 3. Incentives should not continue for more than a ten (10) year period including multi- phased projects, i.e.; the ten year period is inclusive from the first year of the first phase, regardless of planned future phases, or from any "milestone date or event" as determined by the Town Council. The project developer may request an extension of the ten year time limit or milestone date or event to the Town Council. This request must be based solely on some event or occurrence that is/was "beyond Control of the Developer/Owner". 4. An emphasis should be placed on firms that provide diversification (within targeted industrial or commercial sectors) to the Town's economy. 5. The Town will not buy land or existing buildings or construct buildings for purely private • objectives. The Town's position should be to offer incentives that have a relationship to public benefit. Improvements such as streets,water lines, traffic signals, storm drainage, parking structures, parks and open space, and similar publicly assessed improvements are examples of public-private financed incentives. Acquisition of property and construction of buildings, if necessary, must be related to a public purpose. 6. The dollar amount of the incentives offered shall not exceed the cost of the project considered nor shall the incentive value be more than 50% of the new revenues that the project could reasonably expect to return in benefits to the Town within a ten year period as defined in paragraph three (3) above. 7. Private dollars shall be utilized to up-front identified project costs. 8. In certain instances incentives may be offered in conjunction with financial goals and annexation activities which are viewed as financially and strategically important to the Town. 9. The intangible or unmeasurable benefits of a business to a community, such as the location of a headquarters facility, enhancement of attractiveness to other similar businesses or suppliers, or other similar image-related items are also very important and should be considered along with other factors when making decisions on incentives. 10. Generally Retail projects which qualify should generate significant sales tax revenues similar to projects normally identified at a community or regional shopping center level or if a single business, show a clear positive financial benefit to the Town. 11. The use of retail sales tax sharing shall be used as a"pass-thru"tool to encourage earlier establishment of high end stores and/or high revenue generating retail operations in any single project. 12. The use of incentives must be linked to performance criteria. By policy the Town of Oro Valley will not expend public funds prior to development of any commercial project. 13. New Retail development should have an emphasis on meeting a need not currently being filled in the community, or providing a higher level of service/goods/products than presently available, or providing similar services in an area not currently being served. 14. Final authority for any approval of the use of an incentive and/or inducement rests solely with the Town Council. 15. Each action is separate and independent from all other actions associated with the approval of the use of an incentive and/or inducement. 16. Non-revenue sharing incentives (As recommended by the Think Tank) which may be considered would include: a. Reduction of impact fees; b. Reduction of building permit fees; c. Reduction of water connection fees; and d. Extension of the Project Team approach that has been successfully used for larger development projects to any project identified by the Council. • The above suggested incentives will need to be addressed from a legal and fairness consideration due to the nature of creation (impact fees) and bonding requirements (water connection fees). Staff will include an analysis with each request for a consideration by an applicant to the Mayor and Council. IVT-TAG H M E N T C EXHIBIT A TOWN OF ORO VALLEY ECONOMIC DEVELOPMENT INCENTIVE POLICY GUIDELINES GOAL: To guidelines that assist in the retention of targeted provide e the Town Council a set of businessesr and the attraction of new or expanding targeted businesses to the Town of Oro Valley the existing in the diversification of tax base and the creation of employment opportunities. consider usingsome form of incentives in order to POLICIES: In certain cases the Town may ' es . These incentives will only be used when the Town satisfies attract or retain targeted businesses existing business new business or retention and/or expansion of ane g itself that the addition of the ' effect on the Oro Valley economy. The need for would have a significant, positive sales tax • local economywhich minimizes dependence of residential diversification of the businesses This policyplaces a priority emphasis on new and existing. revenues is a necessity. n can be viewed as sales tax revenues. As a guideline the following listing that generate significant Tech Job Creation, and a prioritized preference: 1. Resorts, 2. Retail, 3. Other Lodging, 4. High 5. Service Providers. The following general provisions shall be considered prior to offering incentives. 1. Incentives will only be offered if theyare actually necessary in order to affect the e retention and/or expansion of an existingbusiness or to attract a new business to the Town. This would include: Town of Oro Valley- A situation in which the has determined that the retention of an existing business is desirable. - A situation in which the TownValley of Oro is competing with other cities for the expansion of an existing business to the Town or where incentives are actually necessary to affect the expansion of an existing business. - A situation wherein incentives are needed to induce a business to relocate or expand Town of Oro Valley operation to the from an existing site in another city. - A situation wherein incentives are needed to induce a business to locate their operation to the Town of Oro Valley. 2. A high priority should be placed on the businesses "targeted" in the Community Economic Development StrategicPlan (1997, or the most recent update). substantialpositive economic impact on the community, i.e.; the 3. The project will have a sales tax created by the project in the long-term will offset number of�ob s created or the the short-term costs offered by incentives. Additionally, the project will be of such size or consequence toproduce significant employment or sales in related sectors. 4. Incentives should not continue for more than a 10 year period. 5. An emphasis should be placed on firms that provide diversification (within targeted industrial or commercial sectors)to the Town's economy. 6. The Town will not buy land or existing buildings or construct buildings for purely private objectives. The Town's position should be to offer incentives that have a relationship to public benefit. Improvements such as streets, water lines, traffic signals, storm drainage, parking structures, parks and open space, and similar publicly assessed improvements are examples of public-private financed incentives. Acquisition of property and construction of buildings, if necessary, must be related to a public purpose. 7. The dollar amount of the incentives offered shall not exceed the cost of the project considered nor shall the incentive value be more than 50%that the project could reasonably expect to return in benefits within a ten year period. 8. Private dollars should be utilized whenever possible to up-front identified project costs and then to be reimbursed by the Town to avoid straining the Town's operational or bonding capacity and reduce the Town's front-end risks. 9. Incentives can be utilized for resort, retail, commercial and industrial projects Town- wide. 10. In certain instances incentives may be offered in conjunction with annexation activities which are viewed as important strategically. In the case of large-scale development areas, incentives should be combined with a community facilities district, where feasible, to offer maximum flexibility in attracting development. 11. The intangible or immeasurable benefits of a business to a community, such as the location of a headquarters facility, enhancement of attractiveness to other similar businesses or suppliers, or other similar image-related items are also very important and should be considered along with other factors when making decisions on incentives. 12. Generally Retail projects which qualify should generate significant sales tax revenues similar to projects normally identified at a community or regional shopping center level. 13. Specific performance criteria for each project will be established. 14. New Retail development should have an emphasis on meeting a need not currently being filled in the community, or providing a higher level of service/goods/products than presently available, or providing similar services in an area not currently being served. 15. Final authority for any approval of the use of an incentive and/or inducement rests with the Town Council. 16. Each action is separate and independent from all other actions associated with the approval of the use of an incentive and/or inducement. ATTACHMENT D RESOLUTION NO. (R) 99 - 79 A RESOLUTION OF THE MAYOR AND TOWN COUNCIL OF THE TOWN OF ORO VALLEY,ARIZONA, ADOPTING A LODGING INDUSTRY INCENTIVES POLICY/GUIDELINE. WHEREAS, the Town of Oro Valley has identified expansion of the lodging industry as highly desirable and well supported by the community, and; WHEREAS,the existing Community Economic Development Strategy states that one major action step desired is the development and adoption of a Business Incentive Policy, and; WHEREAS,the existing Community Economic Development Strategy further states that the Town may from time to time wish to use some form of incentives to attract or retain desirable businesses, and; WHEREAS,the Town of Oro Valley recognizes the importance of developing guidelines that include similar considerations for existing businesses as those that apply to the attraction of new desired businesses; NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND TOWN COUNCIL OF THE TOWN OF ORO VALLEY, ARIZONA: The adoption of Exhibit A, Town of Oro Valley Lodging Industry Incentive Guidelines, attached herewith, - :r:: . - --- : : • :- , :- :- . •= - . -= . =: • . •: - : . ::_ - ::- owner to qualify and receive the sales tax and bed tax rebates PROVIDES EXAMPLES OF ITEMS THAT A LODGING OPERATOR/OWNER MAY REQUEST CONSIDERATION FOR. PASSED, ADOPTED AND APPROVED by the Mayor and Town Council of the Town of Oro Valley, Arizona,this day of , 19 . TOWN OF ORO VALLEY, ARIZONA Paul H. Loomis, Mayor ATTEST: Kathryn Cuvelier, Town Clerk APPROVED AS TO FORM: Dan L. Dudley,Town Attorney ITEM 3 TOWN OF ORO VALLEY STUDY SESSION —SUPPLEMENTAL INFORMATION COUNCIL COMMUNICATION MEETING DATE: JANUARY 11, 2006 TO: HONORABLE MAYOR & COUNCIL MEMBERS FROM: JEFFREY H. WEIR, CEcD ECONOMIC DEVELOPMENT ADMINISTRATOR SUBJECT: REVIEW AND CONSIDERATION OF AMENDMENT TO THE ECONOMIC DEVELOPMENT INCENTIVE POLICY GUIDELINES. SUM MARY: At the request of Council Member Culver the information originally presented to the Mayor and Council on February 7, 2005 has been enclosed. The agenda item on the February 7, 2005 concerned the Review and Discussion Regarding Research of the Use of Incentives by Other Municipalities in Arizona. Included are the original Council Communication (CC), and three attachments. Attachment number 3 included with the original CC has not been reproduced based on the fact that it is 50+ pages in length. ATTACHMENTS: Original CC for the February 7, 2005 Study Session — Review and Discussion Regarding Research of the Use of Incentives by Other Municipalities in Arizona. RECOMMENDATION: N/A ITEM 3 TOWN OF ORO VALLEY STUDY SESSION —SUPPLEMENTAL INFORMATION COUNCIL COMMUNICATION PAGE 2 OF 2 '6/2 JEFFREY H. WEIR, CEcD ECONOMIC DEVELOPMENT ADM. //4 CHUCK SWEET TOWN MANAGER TOWN OF ORO VALLEY STUDY SESSION COUNCIL COMMUNICATION MEETING DATE: FEBRUARY 7, 2005 TO: HONORABLE MAYOR &COUNCIL MEMBERS FROM: JEFFREY H. WEIR, CEcD ECONOMIC DEVELOPMENT ADMINISTRATOR SUBJECT: REVIEW W AND DISCUSSION REGARDING RESEARCH OF THE USE OF INCENTIVE BY OTHER MUNICIPALITIES IN ARIZONA. SUMMARY: During the November 17, 2004 regular Council meeting the Mayor and Council as part of the g discussion concerning the possible suspension of the economic incentive portions of the Economic guidelines Incentive Policy directed the staff (Economic Development Division) to economic incentive programs currently implemented by Arizona towns and "immediately research all p 9 cities made thereto, and the measurable effect on the Town's bottom line with that report to be submitted to the Council for a StudySession to be held no later than February 19, 2005."This report will provide the findings of that effort. p There are 89 incorporated municipalities in the State of Arizona. Responses were received from 24 communities (27 /o response rate).. Additional information for the communities of Phoenix and Tucson a 29% survey rate which is considered total of 26 data sets has been ascertained. Therepresents meaningful. are Followingfindings from the responses remitted and additional information: 9 1. Established Policy/Procedures: Including the Town of Oro Valley, there are a total of eleven (11) communities, of the twenty , four (24) that responded, that have some form of an adopted policy/procedure for the p consideration and granting of incentives. 2. Sharing of Sales Tax Revenues: Including the Town of Oro Valley, there are a total of ten (10) communities that have some form of new sales tax revenue sharing. Of note, the ten communities were not the same as have established a policyor procedure (refer to Attachment #2 - Use of the eleven that Incentives by Arizona Communities listing). TOWN OF ORO VALLEY STUDY SESSION COUNCIL COMMUNICATION PAGE 2 OF 3 3. Commitment of Public Funds Expenditure (Infrastructure Improvements): There are a total of sixteen (16) communities that have some form of an adopted policy/procedure for the consideration of the expenditure of public funds for infrastructure improvements. Again as noted previously the sixteen communities were not the same as those responding i n to items 1 and 2 (refer to Attachment #2 - Use of Incentives by Arizona p 9 Communities listing). 4. Currently consider Waiver of Fees: There are a total of fourteen (14) of the respondent communities that have some form of an adopted policy/procedure for the consideration of waiving fees. Again as noted previously the p p y fourteen communities were not the same as those responding to items 1, 2 and 3 (refer to Attachment #2 - Use of Incentives by Arizona Communities listing). TOWN MANAGER COMMENTS: The research accumulated provides an in-depth look at the various approaches currently being utilized by municipalities alities within Arizona. The most remarkable observance I can take away from this wealth of information is that each community has selected an approach that best fits their needs and capabilities. When I step back and consider the adopted policy for the use of economic incentives in . Oro Valleyit is rather apparent that we do not stand apart from other communities in selecting the , , . approach that the prior Council's decided "fit" our community. pp I and the staff, look forward to any new direction concerning either the use or application of economic incentives that the Council determines would better suit the achievement of the community's goals. ATTACHMENTS: 1. Listing by community of specific policies (if existing) and detailed approaches where defined. 2. Breakdown of Community by response category. 3. Additional Community support information as provided. 4. Listing of Economic Development Incentivized projects from responding communities. r •� TOWN OF ORO VALLEY STUDY SESSION COUNCIL COMMUNICATION PAGE 3 OF 3 'i J�� r ! � f 11 i JEFFREY H. WEIR, CEcD ECONOMIC DEVELOPMENT ADM. ( 14d ' CHUCK SWEET TOWN MANAGER ATTACHMENT 1 CITY AND TOWN INCENTIVE POLICIES 1. Avondale A. No Council adopted Strategy. The ED Director presents a Goal Statement each year for Council approval. 1. They do write EDA's for sales tax sharing. a. These EDA's are performance based. They must meet their new sales projections each year to receive the following year etc. Recipient may receive up to 75% of new taxes. 2. Benson A. No formal strategy. They are evaluating. Want a copy of report. 3. Buckeye A. They have no formal policy. They will participate in public infrastructure improvement costs if it benefits the town. 4. Casa Grande A. City Ordinance No. 1297.07.01 1. Qualifying businesses a. No retail b. New industrial or commercial project c. Expansion of an "existing industrial or commercial project" **considering offering to existing businesses** 2. Authorization to rebate a. Any or all fees required to be paid in connection with the construction or expansion of commercial or industrial including, but not limited to, plan check, inspection and sewer connection. b. General funds to pay construction of off-site public improvements. c. All or a portion of the sales tax revenues levied, generated and received as a result of construction. d. All or a portion of the property tax revenues levied, generated or received as a result of construction of a new or expanding project. *** City Council must approve any incentive over $75,000. — less needs approval of the City Manager.*** 3. Criteria a. Creation or retention of a significant number of jobs with the average hourly wage for non-exempt positions of at least 75% higher than the federal minimum and the recipient pays at least 25% of average hourly wage for non-exempt positions in benefits. b. Must expend a minimum of$1,500,000.00 in equipment, land and building improvements as initial investment at a single location and expansions must spend $750,000.00. c. Economic Development will be furthered by rebating fees. d. Recipient's operation will otherwise improve inhabitants of the city. e. Recipient's operation will not disproportionately expend natural resources and services such as transportation infrastructure or public safety services. f. Benefits to city outweigh the costs to City by fiscal impact analysis. 5. Cave Creek A. Town does not have a policy but Council considers the waiver of fees on a case by case basis. 6. Chino Valley A. Town does not have a current policy but is reviewing now. Wants a copy of our report. 7. Fountain Hills A. Town does not have a current policy. Wants a copy of our report. 8. Gilbert A. No formal policy. 1. Offer permit fee waivers, sales tax rebates and expedited review on a case by case basis. 2. Town Manager authorized to approve up to $75,000. Over goes before Council. 3. Incentives considered on both industrial and retail. 9. Goodyear A. Policies outline in general Plan and Goodyear Employment Corridor Study. (case by case). 1. See examples provided. Most appear to relate to sales tax reimbursement. Also fee waiver and direct cash for infrastructure. 10. Kingman A. No formal policies for any development. 1. City will participate in public infrastructure improvements if it benefits the system. 11. Lake Havasu City A. Economic Development handled by non-profit agency. 1. City will give sales tax rebates and participate in offsite improvements. 12. Maraca A. No formal policy for financial assistance. Town has shared new sales taxes generated by a project for public infrastructure improvements (case by case). 13. Mesa A. Policy outline follows. (see report for details) 1. Mesa's Services a. Development Services One-Stop Center b. MEGACORP confidential consulting services 2. Mesa's Financial Incentives a. City Share Financial Participation (infrastructure) b. Foreign Trade Zone c. Permit Fee waiver or reduction d. Private Activity Bond issuance e. Property/excise tax reduction or abatement 14. Paradise Valley A. Town does not provide incentives. They have no industry. 15. Payson A. No formal written policies. In the process of writing a policy. 1. Council approved budget item of$100,000 annually to buy down impact fees. 2. Expedited plan review. 16. Prescott A. The city of Prescott has adopted Incentive Policies. 1. Targeted Development Criteria 2. Incentives Available a. Public participation in cost of infrastructure. b. Public participation in facade improvements, landscaping, lighting etc. in redevelopment areas. c. Payments towards project development costs based on sales tax revenues generated. d. Public participation in payment of fees and permits. e. Bond Financing by IDA. f. Streamlined permitting process and site location assistance. g. Marketing assistance. h. Assistance with grant and loan programs. i. Other assistance on a project-by-project basis. **Additional incentives will be considered.** 17. Prescott Valley A. City has no written policy. 1. Take requests on an individual basis. 18. Queen Creek A. Queen Creek does have a Strategy adopted by Resolution 241-01. 1. Targeted Industry Clusters a. Retail is primary for sales tax revenue. b. High Tech Support c. Tourism & Experience (Experience: eco-experience resort, farm to market and agricultural boutique) d. Agriculture & Agribusiness e. Construction Materials B. Implementation Strategies RETAIL 1. Benefits a. Revenues for operation b. Provide basic goods and services c. Provide employment opportunities d. Retain expand existing businesses e. Social interaction f. Pedestrian oriented Town Center 2. Actions RETAIL a. Create appropriate zoning for commercial development b. Provide clear direction re. location & regulation c. Create/consider/evaluate incentive for high sales tax businesses. d. Timeline for permitting commercial outside Town Center e. Create parking solution 3. Accountability RETAIL a. Town Council b. Town Staff c. EDC *** For all the Benefits and Actions of the other industries, see the attached report*** C. Ready Response Team 1. Members a. Mayor or Council Member b. Town Staff: Community Development Director, Town Manager, Town Engineer) c. Local Business Representative d. Infrastructure Representative (utilities) e. Airport Authority f. School District g. College h. EMS i. Parks & Rec. D. Incentives Considered by Mayor and Council 1. Waver of fees 2. Sales Tax Incentives 3. Public contribution of off-site improvements • i . , . 4. Expedited permitting process 5. Marketing and Promotional assistance 6. Assistance in obtaining gov. grants and tech. assistance 7. Zoning assistance E. Criteria Used 1. Number of jobs created 2. Types of Jobs 3. Tax Incentive for specific term not to exceed 10 years F. Marketing Program 1. 9 items listed as their marketing strategies 19. Sahuarita A. The town of Sahuarita does not have an ED policy. 21. Scottsdale A. The City of Scottsdale does have policies as they relate to economic development incentives. 1. Qualifiers a. Generally performance based sales tax rebates tied to public infrastructure. b. Typically 50% or less of new tax generated as earned. c. Rebate is capped for specific time — 5 — 10 years. d. Payback amount and time are calculated in conjunction with developer and 20 year return on investment is prepared for the community. 2. Other incentives offered a. Expedited review and permitting. b. Assist with banking and relocation services. c. Tax exempt financing through IDA. 22. Sedona A. The city of Sedona does not have an ED policy. 23. Surprise A. The City does have a formal policy and guidelines. 1. Business Criteria a. Recipient's operation will improve or enhance economic welfare of the City. b. Benefits outweigh costs according to fiscal impact model. c. Use of incentives will expand economic development. d. Recipients operation will not disproportionately expend natural resources or burden public infrastructure and services. 2. Possible Incentives a. Subsidizing the cost of public infrastructure improvements including but not limited to: streets, water/sewer extensions, drainage improvements, sidewalks, lighting, landscaping and parking structures/districts. b. Leveraging Federal and State economic development grants, low interest loans and job training programs. c. Industrial Development Bond Financing. d. Waivers or reductions in fees and charges. e. Assessment district financing. f. Rebate of fees, City sales tax revenues and/or expenditures public funds. g. Expediting plan review. h. Other assistance as may be appropriate. 3. Targeted Development Priorities a. Attraction, retention, expansion projects which retain or create municipal sales tax, including but not limited to tourism and retail. b. Attraction, retention expansion projects which create jobs including manufacturing and research. c. Attraction, retention or expansion projects located in Original Town Site. d. Development expected to generate, within a prescribed time, revenues exceeding City's financial participation. e. Businesses that advance the City's ED Strategy. 23. Wickenburg A. Town does not currently have policies. However are reviewing and would like a copy of our report. 24. Wilcox A. City is in process of modifying its local excise tax ordinance by reducing the tax from 3 to 2 percent on point of sale purchases over $2,500. Other incentives being discussed. Currently are in an Enterprise Zone to qualify for additional tax benefits. 25. Yuma A. The City has adopted an ED Policy by Resolution R2000-88. 1. Strategy Objectives a. City will target stable, year-round business with emphasis on quality jobs. Quality job is one that pays a wage (fringe unburdened) equal to or greater than the current Per Capita Income Level as computed by the ADES and provides health benefits at 50% or more. b. Support Retention and Expansion. c. City should be primary location of industrial, commercial and retail. d. City should be location of major State, County & Federal, research educational or similar. e. Support large private commercial recreational and tourism ventures. f. Support redevelopment of designated redevelopment areas, neighborhood redevelopment and infill. g. Support Arizona's Partnership for New Economy and it's premise of global markets, technological advances, organizational innovations and competitive relationships. Support development of telecommunications frastructure. h. Support compact, orderly development incorporating clean industry that allow short commute times, alternate transportation and reduced automobile use. i. City's efforts are consistent with General Plan. COMMUNITIES REPORTING BY PHONE CONTACT: 1. Avondale 2. Benson 3. Buckeye 4. Payson ATTACHMENT 2 • , r• • 4a U) C L. cu cp (I) u) in in u) in ii) in u) En in in IA U) U) E w .> CU CD 1:1) 0:1) W CI) GI 4) 0) WWW W a) Tr m .c IL RI >" >" >" >" ›' ›'' >" >11 › ›' >" >" 0 U N 15 Z 02 N 4 ,. .4 W = 4.a u u = Rha ...... t1.. c 7th a' cu = to E 0., 6. IA M 41) IA IA 11) IA IA 111 IA IA IA IA 1/1 IA IA cl) cu cu cv tv a) cv cu cu cu w cu cu w cu w w u7 > > >"' >" ›' >" >I. > › . 0 0 ri to) 0 IA 0.4 .13 C = IL. U) a) in c W o = a. 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X O / CVre; N VI V in Co N 00 CI% 0 ri N PI gt Ing) N00 at 5 u) ,'I ,"I ,'l i1 ig r4 r4 r4 r4 ri = 4 ATTACHMENT 3 Purposefully Not Reproduced ATTACHMENT 4 Examples of Projects in Other Arizona Cities Goodyear Target Retail Development fees reimbursed & Bonus for early C of 0 (total $265,020) AND 5 yrs/50% rebate of sales tax Lowe's Retail 5 yrs/50% sales tax rebate Toyota Auto 3 yrs/40%; then 5 yrs/50% (est. 5.039 M) Wal-Mart Retail 3 yrs/50% sales tax rebate up to $1,917,159 for off-site infrastructure Pioneer Ford Auto 3 yrs/75% sales tax rebate 5 yrs/50% sales tax rebate Hampton Inn Hospitality 10 yrs or $505,000/50% sales tax rebate Wingate Inn Hospitality 10 yrs or $452,733/50% sales tax rebate Marriott Hospitality 50% construction sales tax up to Residence Inn $37,613 AND 10 yrs or $598,000 50% sales tax rebate Snyders of Industrial Fees waived and rebated construction Hanover taxes — City $1.2M in infrastructure Southwest Industrial Fees rebated up to $51,000 & Specialty Foods rezoning fee of$4,000 Del Monte Industrial Fees rebated $62,456 including construction sales tax Scottsdale Price Club (1987) retail Cash up front from General Paid off 1987 Fund contingency ($105,967) Scottsdale retail 50% General Fund sales tax Paid off 2000 Fiesta (1995) ($2,700,000) Scottsdale Towne retail 25% General Fund sales tax Paid off 1998 Center (1994) 7 years ($329,000) Pima Crossings retail 50% General Fund sales tax Paid off 1995 Center (1994) 2 years ($100,000) N. Scottsdale Auto auto 50% General Fund sales tax Partial Payment Dealers 1996-98 1-3 years ($2,522,000) Sonora Village retail 50% General Fund sales tax Paid off 1999 (1997) 2 years ($108,000) The Promenade retail 50% General Fund sales tax Final 1/07 (1999) ($5,487,000) 7 years Lund Cadillac auto 67% General Fund sales tax Opening 2005 (2002) 10 years ($5,600,000 + interest) ..................................................................................... Neimann Marcus retail 50% General Fund sales tax Paid off 2000 Expansion 1990 10 years ($4,000,000) Nordstrom retail 90% General Fund sales tax Final 2018 Expansion (Phase 2) (new) 30 years ($28,750,000) IMAX theaters retail $105,000/year for 5 years Partial - business (1990) closed Scottsdale Waterfront retail 90% General Fund sales tax Opening 2005 (2003) plus interest @ 7.5% to 20 years up to $3,150,000. Plus waiver of fees up to $500,000. City obligation $1,700,000 in infrastructure. ASU Center for City acquired site $42,000,000 Demolition New Technology and with lease back. City obligation Opening 2006 Innovation $45,000,000 in infrastructure (2004) ..................................................................................... Finova industrial Up to $460,000 in fee waivers Phase 1 (1997) complete Dial Corp. industrial Max. $44,000/year Final 2007 (1997) 10 years conditional ($440,000) Surface Tek industrial Up front payment from Project left (1997) Econ. Stab. Fund paid city ($89,000) $80,100 Mayo Clinic hospital $85,000 in fee waivers Opening 2005 (2003) $3 mil. for building paid back w/interest Valley Ho hospitality 70% General Fund sales tax Rennovations Hotel up to $2,500,000 until 4/24 begun - opening (2003) 2005