Feb. 16, 2005 - As the Oro Valley town council gears up to give the town's economic development policies a close inspection and possible overhaul, it is looking around the state to see what its neighbors are doing.
It also is looking to its constituents for new ideas on how to approach not only how it develops, but the roads it takes to get there.
Economic development in Oro Valley is a constant topic of discussion as the town continues to grow. Oro Valley wants to provide the level of service to which its residents are accustomed and at the same time grow its amenities, such as public parks. But it does not have a local property tax, so the town must rely on other revenue streams to pay its way.
In the past few years, the town has aggressively set out to attract new sales tax dollars, in the form of annexations of areas where existing retail businesses are located and the courting of new developments to build new business opportunities.
Last year those efforts where particularly successful, as the town signed up three companies to build three separate retail developments, which, when complete, will bring 1.5 million square feet of new retail space to Oro Valley.
But some of these moves have come with sharp criticism that the town is attracting too much of the same types of retail without diversifying its own portfolio, and is giving away too much to entice new business to the area.
So, last spring when five new council members took seats on the council, many of them did so with a top goal of looking at where Oro Valley is in terms of economic development and where it wants, and needs, to go next.
In November, after several council discussions about whether to suspend the current economic development policies that allow the town to enter into tax sharing agreements with developers, the council asked staff to research all of the current policies and programs used throughout Arizona's 89 municipalities to see what others are doing.
Economic Development Director Jeff Weir, and staff, reported the findings of that research to the council at a study session held Feb. 7.
Twenty four communities responded to the town's inquiries, and 10 of those have adopted policies in place, similar to Oro Valley, for granting incentives. Nine communities allow for tax sharing agreements, excluding Oro Valley.
Mayor Paul Loomis asked Weir to take the research and bring it back to the council in a more accessible form that breaks the information down into the types of incentives that are offered across the state and the characteristics of those agreements that make them unique. For example, the work done shows that some towns place short time restrictions on some agreements so revenue sharing ceases after five years. Oro Valley's most recent agreements will last as many as 10 years. Other cities, such as Scottsdale, write goals into the agreements, and if a development does not reach that revenue goal in a set time frame, it does not get a share of the tax dollars for that period. Loomis also asked that the "best practices" statewide be identified by staff.
Town Manager Chuck Sweet said the information gathered through this research is "valuable to the town" and that it has been helpful to him to see how Oro Valley stacks up to the towns that responded to the inquiries.
He said it is "yet to be determined" if Oro Valley's 1997 policies stand up in 2005.
Councilmember Kenneth "KC" Carter agreed that having the information organized into the specific different types of incentives given across the state would make the information easier to use, thus making it easier for the council to make informed decisions in the future.
Loomis also asked for additional information about what the state allows in terms of incentives to make sure the town complies with the statutes as it looks at changing its economic development policies. While he did not set a deadline for when to have the information back to the council, he said it was something that needed to be done quickly.
"There are a lot of different ways of doing similar things," Loomis said. "We don't have to use them all, or use any of them. But we need to get them all together and then move forward with the new policies."
Additionally, Vice Mayor Barry Gillaspie said he would like to know "what the experts are saying" with regard to incentive agreements, adding that the topic is a hot one, state and nationwide. Weir said that while the town was compiling the work many of the cities and towns he spoke with requested a copy of the finished product because the information had never been all in one place to reference before.
While this research was going on, Oro Valley lso was getting its residents together to draw upon their expertise and apply it to economic development.
Last month, a group of Oro Valley residents and businessmen and women got together and talked about the future of the town, what kind of community they want it to be and how to get there.
"We are an educated, forward-thinking, enlightened community that wants to be a mover and a shaker," said Councilmember Helen Dankwerth, who had the idea for the think tank and pushed its formation. "We also believe we could be a destination for culture and the arts."
One of the reasons for the genesis of the group was the controversy over three tax sharing incentives approved by the town council last year. However, the issue remained the "elephant in the room" throughout much of the group's work as the members were given a brief introduction to economic development in general and worked through a number of other exercises that challenged them to list the strengths and weaknesses of the town.
When the discussion did turn to incentives, there was a focus, at first, on what the town had done in the past in the way of tax-sharing agreements, and whether think tank members thought there were good or bad decisions made.
"It happened. We need to move forward," said Weir. "We can't change what happened, but we can take what we learned from it and move forward."
Dankwerth said that while there were some initial frustrations that the group was not getting directly to the future of economic development in the town, all the information came together over the course of the two day-long sessions and proved to be meaningful in the end.
"It met all of my expectations and then some," Dankwerth said at the Feb. 7 study session, where she reported back to the council about the think tank's work.
Resident Al Cook is a member of the think tank group who keeps a close eye on how the town is spending its money. He said the group's formation was an important step for the town.
"The discussion has been extremely beneficial. We are getting on the table what we've all been thinking about," he said.
The group came up with a short list of economic development incentives that it wants to explore as possible options for the future.
Some of those ideas include providing job training assistance to workers, fast tracking businesses through the building process, developing some type of public access transportation to get workers who don't live in Oro Valley to the town, waiving impact fees, having the town pay for the infrastructure to support new development, for example building new streets around the business, offering incentives to businesses willing to develop the Naranja Town Site, relaxing the town code for desirable businesses and providing either tax breaks or rebates to new businesses.
The group's discussion, in large part, focused on community development and how to make enough money in the town to support the type of community Oro Valley strives to be.
That led the group to discuss revenue, what the town has and what it needs, and whether the idea of a property tax should be back on the table. There also was a focus on the Naranja Town Site, a proposed 200 acre regional park between Naranja and Tangerine roads, east of the Copper Creek subdivision, and on how to move forward with the development of that site. The group discussed the possibility of forming public-private partnerships with companies that could sponsor athletic fields and buildings in return for funding.
Dankwerth said during the Feb. 7 discussion that some issues were raised that "we didn't necessarily want to confront."
For example, some group members said they believe Oro Valley is a difficult place for small businesses to succeed and others thought the town has a practice of applying its codes "unevenly."
Councilmember Paula Abbott said she took exception to several of the items that ended up in the group's final report. For example, she said that high land cost was listed as a barrier to economic development, but she argued that Oro Valley could do nothing about that particular item. She also pointed to an item that stated that Oro Valley has an unstable local government.
Loomis reminded the council that the exercise was that of a think tank, charged with throwing all ideas out for discussion, and that in the end, the council will be deciding the specifics for the town.
He said the main component missing from the discussion was how the ideas relate to the town's General Plan. He said when the group meets again, it should consider how economic development fits in with the goals mapped out in the plan.
Gillaspie agreed with the mayor and said he also hoped that from this group would come the nexus for the diversification of the town's revenue stream.
"We've got the basis to start connecting the dots," he said after hearing the report.
Dr. Lay Gibson, a University of Arizona professor contracted by the town to moderate the group's discussion, left the think tank with the advice to put together an economic development committee and set an agenda to agree on a half dozen priorities for the town to address quickly.
"You need to get going on something now, instead of waiting for the stars, moon and sun to align in perfect harmony," he told the group.
At the study session, Loomis suggested the group meet two more times, with the objective of putting together a proposal on how the group would develop an economic development policy. Then, he said, the council can decide whether it should stay together and be tasked specifically with revising the town's strategies.
In November, the council outlined a timeline that would have the policies and strategies revised by late spring.
While Loomis said he does not see the group as a committee that will write a new policy, he said he could see it coming up with a "straw man policy," which could become the foundation for any policy revisions.
Council members Carter and Abbott both expressed concerns about changing some of the group's membership if it is to continue working. Both council members expressed similar concerns about the group's makeup when it was formed in late November.
Dankwerth agreed that more members should be added if the group is to stay together, saying she was interested in making sure a small business representative take part in the discussion, as well as a member of the media.