Queen Creek officials are on the path to approve a $7.9 million sales tax incentive agreement with a developer building outside of the town’s limits.
The 65-acre site of the planned development is in unincorporated Pinal County, but is part of the town’s planning area. The agreement would be void should the area not be annexed.
Under the proposed agreement, the developer, Vestar Arizona, would pay for “significant public infrastructure” near its 375,000-square-foot retail center planned for the northwest corner of Gantzel and Combs roads. The infrastructure, which includes road work, is expected to cost $7.9 million.
Vestar would be fronting the costs for infrastructure work the town would normally be responsible for, Assistant Town Manager Patrick Flynn said. The company’s costs would be recaptured, with 7 percent interest, through 50 percent of the sales tax generated by the project until the infrastructure costs are repaid. Vestar will get less if the cost of the work is less, but the reimbursement amount would be capped at $7.9 million.
“This is a value-for-value agreement,” Flynn said.
Town officials expect it will take 12 years to repay Vestar but have set the terms of the agreement at 15 to allow for a flexible timetable.
The Vestar project is expected to generate $900,000 to $1 million in annual sales tax revenue, according to a study conducted by Applied Economics. The town stands to gain $2 million a year in sales tax revenue after the money is paid back, the study states.
The Town Council is expected to vote on the agreement June 20.