Chandler is doing what Mayor Boyd Dunn said it didn’t need to do: Paying incentives to lure business.
During a candidate forum in January, Dunn said that Chandler didn’t need to give incentives to attract businesses. Yet that’s what happened Thursday when the council unanimously approved an estimated $40 million incentive package for a 90-acre auto mall on the northwest corner of Gilbert Road and the Santan Freeway stretch of Loop 202.
Dunn abstained from the vote, citing a conflict of interest because his brother is involved in Gilbert’s future auto mall.
Chandler is careful about offering economic incentives, Dunn said.
"Car dealerships are a special thing. There is a lot of sales tax that comes to the city to help pay for police and fire and to operate the city," he said.
Chandler’s agreement with developers De Rito and Kimco states that Chandler will reimburse half the sales tax generated on the site for up to 13 years with no cap. The city extended that agreement for one more year for a 20-acre portion of the site in an effort to draw a luxury auto dealership to the area.
City Manager Mark Pentz said Chandler projects that the auto mall will generate $78.6 million over the life of the agreement — close to $40 million for the city and another $40 million for the dealerships.
Gilbert Mayor Steve Berman said he was shocked that Chandler did this after it criticized Gilbert regarding December’s $60 million in incentives for a 128-acre auto mall at Loop 202 and Val Vista Drive.
"I think it’s incredible that when Gilbert agreed to give 50 percent of sales taxes for our mall for 10 years with a cap, Chandler called that outrageous," Berman said. "Now the city of Chandler is giving an incentive away for 13 to 14 years without a cap. What do they call that?"
Negotiations between Dunn and Berman to share revenue from the Gilbert auto mall failed.
"Gilbert decided to go out on its own, but I have the responsibility of protecting my own citizens," Dunn said. "With that being said, we needed to be competitive and offer incentives to bring something to our side of the border."