September 13, 2004
Automobile dealers along Scottsdale’s "Motor Mile" are banding together to create a special taxing district as part of an effort to improve marketing of the area.
More than a dozen car dealers along McDowell Road in west Scottsdale are working with the city to form a self-taxing district to generate funds for promoting the area as a car-buying Mecca.
Creating the district would likely quiet oft-heard rumors of the dealers’ exodus to newer auto malls elsewhere in the Valley, because the city’s major taxgenerating businesses were looking to reinvest in the area, business leaders and dealers said.
Discussion of the idea also is a sign that the auto dealers are encouraged by plans to revitalize the area, which includes the $300 million Arizona State University research center at the old Los Arcos Mall site.
"It shows they would be willing to make some investment in the area and stay in the area," said Virginia Korte, president of the Scottsdale Area Chamber of Commerce. "I do know that some of those franchises are being pressured by the manufacturers to look for other sites because of growth areas in the Valley.
"With this redevelopment and growth potential for the McDowell corridor, it is causing some reflection on the dealers’ part as to whether they do want to move."
Korte, whose family leases land to Bill Heard Chevrolet at Scottsdale and McDowell roads, said the chamber spearheaded the discussions with the city about the tax district. Discussions have been ongoing since spring.
The idea would be similar to downtown Scottsdale’s "Enhanced Municipal Services District," which is a self-taxing district composed of downtown merchants.
The merchants voluntarily increased their property-tax assessment seven years ago to fund marketing for the area.
That tax generates about $500,000 from more than 650 business and property owners in a 225-acre downtown area.
In the case of the Motor Mile, only the auto dealers would pay the tax. Dealers are discussing a tax that would generate about $1 million annually.
The money would not be used to market individual dealers, but rather to promote the area as a whole.
"Usually you can’t get a bunch of car dealers to agree to give away money," said Dan Jonuska, owner of Saturn of Scottsdale on North Hayden Road.
Jonuska, who has been involved in the discussions, is planning to open a second Saturn dealership on the Motor Mile by 2006.
"It’s a win for the city, too, because they will keep the tax base and they won’t have dealers leaving the area," he said. "I don’t know if you’ve ever seen an empty dealership, but it’s not pretty."
The Motor Mile dealerships generate up to $8 million annually in sales-tax revenue for the city, on par with newer dealerships in north Scottsdale, said Dave Roderique, the city’s economic vitality director.
The city may also be asked to contribute money to manage the marketing program, Roderique added, but specifics have not been discussed.
The council will briefly discuss the concept during tonight’s study session at City Hall, 3939 N. Drinkwater Blvd. A Sept. 21 council meeting also has been scheduled to discuss general redevelopment issues for south Scottsdale.