Fight on mall subsidy deepens - East Valley Tribune: Mesa

Fight on mall subsidy deepens

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Posted: Sunday, November 28, 2004 6:11 am | Updated: 5:27 pm, Thu Oct 6, 2011.

November 28, 2004

On one side is a major Valley developer who appears willing to spend whatever it takes to lure Bass Pro Shops Outdoor World to its Mesa project.

On the other side is a group that led the charge to stop the Arizona Cardinals stadium and repeal the food tax, and now wants to halt the Riverview at Dobson project because of the proposed sales tax incentive deal estimated at $80 million.

And four days from now, Mesa voters will have a good idea whether they’ll decide the fate of the 250-acre project on the east and west side of Dobson Road, south of Loop 202.

The heated debate pits Kimco Developers and De Rito Partners Development against David Molina and Jan Hibbard of Valley Business Owners (And Concerned Citizens).

And with neither side willing to back down, and the Mesa City Council preparing for another vote to move the project forward, the spending, political maneuvering and accusations are poised to escalate.

Molina’s group has until Thursday to collect 3,261 valid signatures that would place the project’s zoning on the ballot. Molina, chairman of Protect Mesa’s General Plan, Stop Excessive Subsidies and Stop Corporate Welfare, would not say how many signatures he’s gathered to date.

The council earlier this month approved the zoning for the project that’s planned to include Bass Pro Shops Outdoor World, an entertainment district anchored by a 16-screen Cinemark movie theater, a retail power center with big-box tenants, an auto mall and an employment park.

The signature-gathering process that began two weeks ago has already led to a lawsuit, two formal complaints and verbal accusations of dishonesty.

The development group says Molina is misleading voters by targeting the estimated $80 million incentive deal — which has not been approved and would not be on the ballot if the necessary signatures are collected — and linking the deal to the utility rate increase that Molina challenged.

"I’ve never seen such a misleading campaign," said Doug Cole, the development group’s political consultant.

Molina does not deny linking the utility rate increase to this issue.

"Everything is interrelated," he said. "You have to take a look at the total picture."

Molina said he believes a referendum on the zoning is the only way to stop the proposed incentive deal, which the council is scheduled to vote on at its Dec. 6 meeting. He does not believe the development agreement would be subject to referendum, despite the city attorney’s contrary opinion and a letter from the city manager reiterating that position.

"I’m not taking the bait," Molina said.

If Molina successfully places the zoning issues on the ballot, the project will be on hold until at least May, the earliest the city could call a special election. Cole said if Molina chose to refer the development agreement — and not the project zoning — it would allow the development group to break ground on the theater as planned.

Vice Mayor Claudia Walters said Molina’s group is not looking at the bigger picture.

"The concern I have is that the broader message being sent to the development community is ‘don’t do business in Mesa,’ " said Walters, whose District 1 includes the Riverview at Dobson site. "That’s a message we cannot afford to have out there."

Mike Withey, a zoning attorney representing Kimco and De Rito, said the plan was to break ground on the theater and entertainment district early next year.

No other tenants have been announced, which Withey attributes to Molina’s referendum drive.

"They’re waiting in the wings to make sure we can do what we say we’re going to do," Withey said.

No date has been set for the ground breaking of Bass Pro Shops Outdoor World, which development officials indicated could go elsewhere without an incentive deal.

A preliminary draft of the incentive package shows the developer could receive about $80 million in reimbursed taxes and fees.

The figure was first reported at $42 million, but that does not include up to $25 million the developer can earn from interest on the sales tax rebates, or uncapped sales tax rebates from the future auto mall. The developer estimates the auto mall figure at $12 million — which brings the grand total to $79 million — but because there is no cap on those rebates, the final cost of the package is unknown and could exceed $80 million with just slightly better-thanpredicted earnings.

The final version of the development agreement is expected to be released this week. Withey expects the agreement to rebate 50 percent of the sales tax in most instances, with some variations that increase the amount rebated to the developer.

Withey said the project would generate $170 million for Mesa over a 30-year period.

"Besides generating money for the economic benefit of the city, this is what the community and neighbors have repeatedly said they wanted," Withey said.

To date, each side has filed a complaint with the city accusing the other of violating state election law. The development group took it a step further Wednesday by filing a lawsuit in Maricopa County Superior Court, alleging defamation and other charges.

Both sides have people in the field — Molina’s people to gather signatures and the developer’s people to discourage people from signing.

De Rito Partners has already contributed $25,000 to this effort. Jan Hibbard, treasurer of the three committees headed by Molina, would not say how much the group has spent or if someone is assisting them financially.

"Who’s the wizard behind the curtain?" Cole said. "Everyone knows who we are and have for months, but who is funding these guys? I think the citizens of Mesa deserve to know."

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