Oro Valley commits $40,000 to Omni, mall annexation - The Explorer: Import

Oro Valley commits $40,000 to Omni, mall annexation

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Posted: Thursday, November 9, 2006 12:00 am | Updated: 7:52 am, Thu Mar 24, 2011.

November 8, 2006 - The town of Oro Valley will continue to court some unincorporated land to its southwest, hoping to make a sales and bed tax rich 2.2 square miles Oro Valley turf.

And although its mostly residents that the town will get - 4,149 people live in the area - it's tax money that it wants.

The town has considered annexing of the area north of Ina Road and east of Shannon Road since October 2005. It is part of the town's general plan to square off its borders, and this attempt moves, at least somewhat, it that direction.

But the most alluring aspect for the town is the potential sales and bed tax the Foothills Mall and the Omni Tucson National Golf Resort and Spa would generate.

The annexation, which is projected to be complete by August 2008, comes at a good time to acquire bed tax. The Omni Tucson National is expanding its resort from 167 guest rooms to 239 rooms and expects to be finished by late 2008. (See story page 17A)

But the annexation is not without complications. At its Nov. 1 meeting, the council approved $40,000 to spend on the process this year, but a couple of council members expressed trepidation, making certain that authorizing the money didn't commit the town to going through with the process.

"Everything is very frontloaded," said Scott Nelson, Oro Valley special projects director. "You'll get all costs up front."

Councilwoman Paula Abbott was the only member to vote against authorizing the money, saying the town's annexation and economic development policies aren't clear enough to pursue annexation.

The annexation process will cost the town around $60,000, Nelson said. Projections show the town could make about $3.5 million in tax revenue in the first year and about $5 million per year after.

The town will have to hire 10 new police officers and about 14 more positions throughout the town staff, costing around $1.5 million a year.

The town needs 50 percent plus one of the property owners who own at least 50 percent plus one of the assessed land value to sign an annexation petition for the area to join Oro Valley.

But Nelson said he still has a number of tasks to complete before filing the formal map next May or June.

First on his agenda is to negotiate the economic development agreements that the mall and the Omni have requested.

Economic development agreements are incentives towns use to entice businesses to sign the petition. The agreements usually give a percentage of sales or bed tax back to the businesses, money they would not get if they stay in unincorporated Pima County.

Consumers are the ones who would pay for the annexation. In addition to the statewide 5.6 percent sales tax, Oro Valley levies an additional 2 percent sales tax. The town also has a 3 percent bed tax.

David Morgan, the general manager of the Omni Tucson National, said it is too early for him to say publicly what type of incentives the Omni is looking for. He said he wasn't even sure that the town was serious about annexation.

"We have had conversations with the town, but they've been informal," Morgan said. "But anything we do would be a win-win. It would be an immediate benefit to the town for the bed tax."

Morgan said he thinks the Omni would fit in nicely in Oro Valley, but it doesn't make that much difference to him.

"We love Oro Valley, but we love the county," he said. "There are certain things to be considered, but at this time, it's too early to say."

Foothills Mall administrators did not return phone calls to the EXPLORER regarding its economic incentive requests.

The town council didn't spend much time discussing the annexation at its Nov. 1 meeting, but at its Oct. 11 study session, council members seemed weary of the economic development requests.

Councilman Barry Gillaspie said at the study session that the town needs to examine the economic development agreements and the potential costs of road and bridge repair that may come with the annexed land.

"There's a ton of buried costs that will sink Oro Valley if we're not up front with the costs," Gillaspie said. "The EDA, the bridges, we could get sunk on this."

Abbott raised the issue of fire service, saying confusion over what district services the area could present a lot of problems. Golder Ranch is in the process of taking over all fire service in Oro Valley, but other districts serve the proposed annexation area.

Nelson said if residents are satisfied with their fire service, he doesn't see why they would have to change.

"Oro Valley is not in the fire business," he said.

Even though the business owners in the area only make up 4 percent of the total property owners, they represent 23 percent of the land value. So after the economic agreements are settled, and the town has the businesses on board, it will go to the residents.

Nelson told the council that leaders of homeowner associations gave him positive feedback about annexation. But Virginia Gott, a homeowner in Tucson National, who has been attending Oro Valley town meetings to keep up with the town's annexation plans, said she doesn't want to be in Oro Valley.

"Oro Valley is perfect for the individuals who can't think for themselves, for a robot," Gott said. "Everybody is in the same cookie cutter house. That's not my lifestyle. I'm an individual, and you cannot have that in an overly planned master-planned community."

Linda Currin, the secretary for the La Morada homeowners association in Tucson National, said her HOA is just trying to figure out what's going on.

"I've seen very little publicity," Currin said. "I can't say I'm either for it or against it. I'm under the impression that Oro Valley is going to sneak by and try to do this without telling people."

Currin said she's not going to sign an annexation petition until she is clear on what services will be provided and that there is no property tax.

"Really, I'm very disappointed that OV is not making more of an effort to educate the public," she said. "Everything so far has been word of mouth."

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