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A.J. weighing $6.6M retail center payback
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Apache Junction is hoping to lure a major retail center inside its boundaries by offering a sales tax rebate of up to $6.6 million for developerfunded road and sewer work.
The City Council plans to vote Dec. 18 on a sales tax incentive package for developer US 60 and Idaho LLC, which wants to build a 500,000- to 700,000-square-foot shopping center at the intersection for which the company is named.
The development, to be known as Apache Junction Gateway, would cost an estimated $150 million, with roughly one-third of that to be paid by retailers occupying anchor locations. According to city officials, the developer would not agree to build the project as planned without the tax rebate.
City Attorney Joel Stern said Apache Junction will not offer any concessions beyond repaying the developer half the infrastructure costs the city would eventually have to build and pay for anyway.
“Actually it’s not an incentive; it’s a sales tax reimbursement,” Stern said.
The project is expected to generate an estimated annual city sales tax revenue of $3.7 million by 2011, the year US 60 and Idaho is expected to repay its debt, according to a consultant hired by the city.
Consultant Sarah Murley of Applied Economics told the City Council on Tuesday that it should only take four years to reimburse the developer for its infrastructure costs, although the agreement would allow up to 10 years to complete repayment.
Murley added the proposed deal meets state requirements for an incentive package, which include making sure the city is likely to see a net gain in tax revenue from the deal.
City Economic Development Director Steve Filipowicz said a four-year reimbursement period is very favorable for the city, and that the retail center would create 350 to 700 jobs.
“Retail jobs are traditionally filled by local employees,” he said.
Scottsdale-based US 60 and Idaho LLC, managed by Walter Brown, Christopher Hinkson and Tim Dollander, says it has not yet signed any deals with specific retailers, but Apache Junction Gateway is expected to contain a major fitness center, a multiplex movie theater and at least two major retail anchor stores 100,000 square feet or larger in size.
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