Big grocers join OV's economic battle - The Explorer: Import

Big grocers join OV's economic battle

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Posted: Thursday, March 31, 2005 12:00 am | Updated: 7:49 am, Thu Mar 24, 2011.

March 30, 2005 - Three of Arizona's biggest grocers have entered the Oro Valley economic development fray by contributing more than $70,000 to a citizen's group working to refer an incentive agreement between the town and Vestar Arizona to a public vote.

Stop Oro Valley Outrageous Giveaways has touted itself as a grassroots organization of the citizens, standing up to the Phoenix-based developer, although it has received $73,000 in funding, most coming from three major grocery store companies with locations in Oro Valley: Bashas', Fry's and Safeway.

SOVOG, as its members call it, was formed last year to combat a series of incentive agreements approved by the former town council, which outline sharing $42.6 million in sales tax dollars among three different developers planning shopping centers in the town.

SOVOG sued to make two of the agreements referable to a public vote: the BP Magee agreement for $6.5 million in sales tax rebates and the Vestar agreement for $23.2 million. Pima County Superior Court judges ruled both agreements were not referable because they were administrative, not legislative in nature. However, the state Court of Appeals overturned the Vestar decision in February. The higher court ruled that the agreement was referable to a public vote because the voters in Oro Valley were given no notice of the "magnitude" of the revenue sharing agreement and that revenue sharing was not mentioned in either the town's economic development policy or its implementation documents as being a possible incentive.

Although Vestar Arizona has decided not to appeal a court ruling deeming the incentive agreement it holds with the town referable to public vote, the town council has decided to hold off on accepting petitions for a referendum.

At the March 16 council meeting, lawyer Gary Urman, representing the town in the Vestar case, advised the council to wait before ordering the acceptance of petitions, saying that the court should issue a mandate advising Town Clerk Kathi Cuvelier to do so within a matter of weeks. Urman had advised the council at a March 2 meeting to wait until after the March 14 appeal deadline before making its decision.

"What happens next is roughly automatic," he told the council March 16. "It's just a matter of legal nature taking its course."

If the council were to order the petitions accepted now, Urman said that action could "unlawfully usurp the discretion vested by law to the town clerk." He cautioned that such action could open the council up to litigation and said it would be best to wait and let the Superior Court issue a directive, with the council essentially staying out of it.

Chet Oldakowski, a spokesperson for SOVOG, stated after the council meeting that the group will now have to be content to wait until the court issues its mandate to the town.

Vestar representatives said the company will continue to focus on preparing its development, but welcomes the public discussion that will likely take place before a referendum vote.

In a press release issued after the March 14 appeal deadline, David Malin, Oro Valley Marketplace project manager, confirmed the company would not appeal the latest decision and said it is looking forward to public debate on the issue.

"We are committed to continuing our dialogue with the citizens of Oro Valley and look forward to working toward a project that can enhance and benefit the town," he wrote.

Malin notified the members of the Neighborhood Leadership Group of the decision not to appeal the court's ruling before announcing the decision to the public. The group of Oro Valley residents has been meeting with Vestar representatives to talk about key concerns, such as noise and light mitigation and landscaping plans, identified by them early in the process. Company representatives said this is part of Vestar's effort to build a development that is right for the community.

"We think it is time for the citizens of Oro Valley to decide this issue," Malin said of the incentive agreement. "The debate leading up to the likely November election date will be a good one. Ultimately, we are hopeful and optimistic of prevailing since we want to serve the community with new amenities that will provide increased convenience and millions in new tax revenue that can be used to fund and enhance public safety, parks and important town services."

A spokesperson for Vestar, Nanette Pageau, said, to her knowledge, Vestar has no plans to launch a campaign for the incentive agreement and will instead continue on the path it has already begun by meeting with the neighborhood group and by holding open houses, as it has been doing for the past three months, to answer questions from the public and provide updates on the project.

Vestar is scheduled to build the largest shopping center in the town, Oro Valley Marketplace, at the southwest corner of Oracle and Tangerine roads, and is expecting to bring development plans before the council in May.

Oldakowski said SOVOG was not expecting an appeal by Vestar, but that it is expecting the company to begin "selling" the project, and the incentive agreement, to the residents.

"We fully anticipate a heated campaign and have begun our preparations," he said.

The group, he said, has been joined by additional volunteers since the court ruling was made final.

"It is clear that the residents understand the issues and have concerns with the latest development plans offered by Vestar," he said of the increased interest in SOVOG's cause.

SOVOG first brought a lawsuit against the town last April after its members gathered petitions in order to put the agreement to a vote and were rejected.

Upon learning of the development agreements, the group gathered nearly twice the 645 signatures required for a referendum and marched them to town hall.

When the petitions were rejected by Cuvelier, upon the advice of former Town Attorney Mark Langlitz, the group sued the town for the right to vote. In July, Vestar filed a motion to become a second party in the suit and asked that Judge Jane Eikleberry rule in favor of the town's decision, in a motion for summary judgment.

SOVOG has racked up nearly $73,000 in legal fees, which have been ordered to be paid by the defendants in the lawsuit by the appeals court. Last month, Vestar objected to paying any of those fees.

The group recently launched a Web site, www.sovog.com, which includes a line at the bottom of each page stating that major funding has been provided by the three supermarkets. Oldakowski would not comment on how much funding has been received to date and how it has been used, but said the information would be contained in the political committee's contribution reports filed with the town March 23.

The reports, obtained from the town, show that the group has collected $23,000 from each of the supermarket chains and an additional $3,500 from individual contributors since forming at the end of April last year.

Political committees are required to report contributions when the first source contributes $10,000 or when the committee receives contributions totaling more than $10,000, according to Arizona law.

About $13,000 of the money SOVOG has raised has been spent to date, according to the reports, most of it on the legal expenses the group incurred as it battled Vestar and the town in the Superior Court case and subsequent appeal.

Diana Bejarano-Medina, director of communications and public affairs for Bashas', in a written response to questions from the EXPLORER, stated that Bashas' supports SOVOG's efforts because "the Oro Valley community should have an opportunity to vote on whether 23.2 million in tax dollars will be paid to a private shopping-center developer."

"Bashas' welcomes fair competition in the marketplace," she wrote. "But the proposed development agreement unfairly favors one developer by giving Vestar 23.2 million in tax dollars and exempting the Vestar shopping center from development fees, impact fees, and use regulations that apply to other Oro Valley businesses. The enormity of the revenue-sharing plan would undermine fair competition among businesses in the Oro Valley marketplace and would give to a single developer 23.2 million in tax dollars that could otherwise be used for projects benefiting all of the Town's citizens."

She stated that Bashas' continues to support SOVOG's efforts to permit the town's citizens an opportunity to vote on the development agreement.

Bejarano-Medina said Bashas' was approached by members of SOVOG for its help and confirmed that the reports filed with the town are accurate.

The idea to approach the supermarkets for support came from a Chandler resident who has been helping members of SOVOG in their endeavor.

Sandra Laney led Chandler residents who opposed a 217,000-square-foot Vestar center with a Wal-Mart Super Center anchor in their residential neighborhood in 1999. Vestar has been developing shopping centers across the Phoenix metro area in recent years at a fast pace.

Laney gathered petitions against the company's 1999 proposal and the council eventually denied the developer's plans.

In that case, no incentive agreement was ever finalized.

But a few years later, Vestar came back to the council with a new plan, which still included a big box anchor.

This time, Laney organized a letter-writing campaign, getting local residents to tell potential tenants in the plaza that they would not shop there if the center was anchored by a superstore.

She believes that move is what got the developer to sit down with representatives of the group and conduct a local survey to see which stores would be supported by area residents. A similar survey is being conducted by Vestar for the Oro Valley Marketplace development.

Laney said that even with the survey results showing no wish for a big box, a large anchor store was still part of the development until she convinced Vestar that the shopping plaza could be just as lucrative, if not more so, with two minor tenants replacing the large planned anchor.

"It's not a case of how to beat city hall," Laney said of her endeavor, which garnered local media attention. "It's a case of sitting down and finding something everyone can agree on. We were looking for a way for the developer to make their profit and, at the same time, make the neighborhood happy. It hasn't been that difficult."

She said she got motivated by the idea that her quiet neighborhood would be disrupted by a 24-hour business, with huge, lighted parking lots - the kind of place she said often brings noise and trouble.

"I think that's the biggest objection to a superstore. It's not the people who shop there - we aren't trying to be elitist - it's just that type of retail is not compatible with a residential community," she said.

In Laney's case, she also was supported by local supermarket owners who she said were concerned about the competition.

"Let's face it, there is only so much retail money to go around," she said. "Healthy competition is good, but if the competition is smothering everything, nobody else can survive."

The group conducted an independent economic impact study because, like in the case of Oro Valley, the town had only the developer's numbers to go by.

Laney said that when they first began in 1999, the stores, including Bashas', supported the group by allowing it to collect petition signatures at the entrances. But as time has passed, the stores have become more aware of the amount of money that leaves a business when a superstore is built in close proximity.

"They're becoming very aware now that they understand that," Laney said, and have been willing to support these citizen groups with funding.

And while these groups are viewed by some to be naysayers and rabble-rousers, the most important advice Laney said she has given SOVOG so far is to try to find a way to work with the town and the developer.

"You have to find a way to compromise. I have never been negative or abusive, but we have agreed to disagree on things. The power of the people is very strong when they are organized. And we always have the power of the recall, or to vote the council out of office, that's been the unspoken hammer in all of this," she said.

There is now a Vestar shopping center under construction in Chandler with two smaller stores where there had originally been planned one big one, and for all her efforts, once the final agreement was reached with the town, Laney was given an award by Vestar.

"For helping to get the shopping center built," she said, chuckling at the irony.

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