Automobile dealers along Scottsdale’s "Motor Mile" have taken the first step toward creating a special taxing district as part of an effort to better market the area.
A dozen dealerships along McDowell Road in southwest Scottsdale filed legal paperwork last week in the hope of creating a nonprofit organization called "Scottsdale Motor Mile."
The nonprofit designation would allow the dealers to join a self-taxing district, following City Council approval. The move also lays the groundwork for the dealers to solicit financial aid from the city.
For years, Scottsdale and business leaders have warned that auto dealers along the strip might move to new locations closer to freeways. Communities such as Chandler and Gilbert have waged bidding wars and offered hefty financial incentives.
"Scottsdale has benefited greatly for many years from the hundreds of millions in sales-tax revenues generated in southern Scottsdale at these dealerships," Chamber president Virginia Korte said in a written statement. The chamber spearheaded the creation of the district.
"The creation of Scottsdale Motor Mile and the support from the city can keep these high tax-generators in our community," said Korte.
The district would allow the dealers to tax themselves —raising nearly $1 million annually — to market the area as a car-buying destination.
But it wouldn’t come for free. The dealers want the city to contribute $500,000 annually, said Chamber public policy director Rick Kidder.
That figure was briefly debated in September, but never agreed upon. The issue is tentatively scheduled to go before the council on Jan. 25.
Critics at the time included Councilmen Bob Littlefield and Jim Lane, as well as some fiscally conservative activists.
Littlefield said Monday he still opposes the subsidy, noting that Scottsdale is already committed to investing $130 million over 20 years at the nearby ASU Scottsdale Center for New Technology and Innovation at Scottsdale and McDowell roads. That plan, which was supported by a majority of the area’s car dealerships, was pitched to be a catalyst to revive the area.
"I don’t think we should be funding private industry in general and certainly not funding the car dealers to do their marketing," Littlefield said.
South Scottsdale car dealerships generated $9.4 million in sales and use taxes last fiscal year, according to the city.