By unanimous vote, the Oro Valley Town Council voted Wednesday night to reinstate tax-rebate payments to retail developers it has partnered with over the years.
The council's decision comes days after the Arizona Supreme Court upheld the legality of a tax-rebate contract entered into by the city of Phoenix and the developer of a now-bankrupt retail development called CityNorth.
The council met in closed session to receive advice from Town Attorney Tobin Rosen on Wednesday. It came into open session, where Councilman Al Kunisch moved to restore payments to four companies — Vestar Development, which built Oro Valley Marketplace; The Hilton Tucson El Conquistador, which received a rebate on bed tax collections; Evergreen / Diamond Ventures, developer of Steam Pump Village; and BP Oracle Crossings Investors, developer of the Oracle Crossings retail center.
Mayor Paul Loomis seconded Kunisch's motion, and it passed without dissent nor discussion.
Both Vestar and BP Oracle Crossings had recently filed lawsuits against the town, demanding payment on their contracts.
The town's economic development partners will receive all back payments due with interest.
An appeals court decision in 2008 had determined the CityNorth agreement violated the gift clause of the Arizona Constitution.
In the wake of that decision, the Oro Valley Town Council voted last January to cease payments to its partners, including owners of the Oro Valley Marketplace, Vestar Development Company. Payments due to Vestar and others were instead put into escrow accounts awaiting the resolution of the CityNorth case.
The rationale for withholding payments given at the time by Councilwoman Salette Latas was that the appeals court had effectively made such agreements illegal.
Loomis cast the only vote against halting payments in January 2009, saying he thought the case wasn't settled and it was premature to make any such decision.
For more on this story read The Explorer on Feb. 3.
Economic Development Agreements in Oro Valley
The town has entered into five economic development agreements over the years, including:
Oro Valley Marketplace
Vestar Development Company
45 percent of sales taxes
Up to $23 million
Oro Valley Town Centre
Cañada Del Oro Properties
45 percent of sales taxes and one-third of bed taxes
Up to $11 million
(This development has not been built)
Steam Pump Village
40 percent of sales taxes
Up to $7.6 million
BP Oracle Crossings Investors
46 percent of sales taxes
Up to $6.5 million
Hilton El Conquistador
Rebate one-third of town's 6 percent bed tax