Mission Peaks development subsidy stirs debate

Neighbors have long lined up for and against the huge Mission Peaks proposal west of town, but town council members are now taking stands on a possible tax break.

While it will be months before the town decides on zoning for the 15,000-unit proposal from developer American Nevada Company (ANC), two of the seven town council members are against the idea of subsidizing the project, another is skeptical but uncommitted and one is leaning toward the idea.

The developer is making the argument the project will provide significant benefit to the region in road, water and parks infrastructure plus open space, and it would be a net benefit to the town in terms of tax revenues even after subtracting an incentive.

ANC has not said what incentive it wants, but company Vice President Dan Naef said in an e-mail message, “The incentive reduces to some extent the difference between the cost of development in the Town versus the County.”

ANC said it would cost $50 million more to develop in the town than under Pima County’s jurisdiction. Town staff said the difference is $7 million and could range up to $39 million under various assumptions.

So far, Town Council Members Charles Oldham and Scott Downs are not buying it; Mayor Lynne Skelton and Town Council Member Roger Minor are open to it, if the developer builds roads, parks and other infrastructure needs, and Vice Mayor Phil Conklin praised the overall proposal but was skeptical about the cost difference.

Skelton said, “ANC has suggested the town rebate $50 million back to their project. I am in favor of considering their proposal as long as public (not private) parks are built, as well as better than adequate public transportation infrastructure is built, not to mention other public facilities ANC is proposing.

“At first glance this seems to relieve the town from having to build the public amenities — spending the same tax dollars for the purposes mentioned. So, I believe it’s worthy of consideration and understanding the concept as well as the consequences.”

Conklin said, “It appears to me to have a number of uncertainties which need to be examined in much greater detail.... I find it hard to believe that it would cost more to build in Sahuarita than in the unincorporated county.”

Downs wrote, “The idea of the council giving a 50 percent ‘refund’ because ‘it costs ANC 50 percent more to do business with us’ I think is a far stretch for a legitimate reason for the break. If you want to do business with us, then that’s what it costs! Some use the argument ‘50 percent of something is better than 0 percent of nothing.’ Not sure I buy that argument in this case. If I give a $10 tax break to someone, and it returns $20 back, that’s a good deal. I don’t think the financial analysis of this situation elicits much!”

Oldham said he would not support a tax break, saying the $25 million ANC has pledged toward rebuilding the Interstate 19 interchange at Sahuarita Road is “their $25 million, and is not part of the $50 million.”

Minor said, “I’d like to see it work. They’d be a good addition” but would have to address roadway improvements.

“There are some questions to be answered. How do I as a Town Council member justify $50 million for what they are proposing?” Minor said.

ANC is seeking to develop on a site straddling Mission and Twin Buttes roads in unincorporated Pima County and has filed applications with both the county and the town.

ANC has given the town a document, saying it would cost the developer and its home builders $100.8 million to pay the Town of Sahuarita’s development fees and taxes compared to $50.8 million for Pima County taxes and fees.

Town Finance Director A.C. Marriotti agreed the town cost is $100.8 million but said the county figure would be $93.8 million, making the difference $7 million, with two major contingencies.

One, the developer is seeking a waiver of the county’s $18.7 million affordable housing trust fund fee because Mission Peaks would include its own affordable housing. Two, the developer says it will spend up to $13 million for conservation of biologically sensitive land whether it develops under town or county jurisdiction.

If town officials accept the developer’s argument and Marriotti’s numbers, the $93.8 million would drop to $62.1 million, making the cost difference $38.7 million.

pfranchine@sahuaritasun.com | 547-9738