Marana creates new tax district, looks at future boards - Tucson Local Media: Import

Marana creates new tax district, looks at future boards

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Posted: Tuesday, March 9, 2004 12:00 am

In three consecutive meetings Feb. 17, the Marana Town Council moved toward creating boards and districts that may determine how the town pays for the cost of infrastructure needed to sustain its booming pace of growth, lures industry and jobs, and provides affordable housing for Maranans.

Sitting in regular session during the second meeting, the council voted unanimously to form the Gladden Farms Community Facilities District, a town-operated governmental body that will issue $69 million worth of general obligation bonds to pay help for roads and other infrastructure for the builders of the 1,900-home Gladden Farms development in North Marana.

Future residents of the development will pay a tax of $2.80 per $100 assessed value of their homes to repay the debt.

The first $23 million in bond proceeds would be allocated to the developer for road and sewer improvements and other infrastructure needs directly related to the Gladden Farms development, located between Moore and Barnett roads west of Interstate 10.

The remaining $46 million would be held in reserve by the town for future infrastructure needs of the development and district residents.

The town has scheduled an election May 18 to authorize the issuance of the bonds, but that election will probably be waived. No one is expected to be living in the district by May, leaving the Gladden Farms developer and home builders to decide whether government bonds should be sold to benefit their own project.

"Essentially, the developers of the project are the only property owners and would be the only voters," Marana Finance Director Roy Cuaron said in an interview after the meeting.

Marana Town Clerk Jocelyn Bronson was still researching the issue Feb. 23, but concurred with Cuaron's interpretation of the state's election law.

"Which means that if 100 percent of the landowners approve of the measure, which the developer probably would through petition, we can get a waiver where the vote won't be necessary," Bronson said.

The decision to create the taxing district emerged after a Jan. 21 study session in which some council members expressed concern that the council was, to a degree, reneging on previous promises by the council not to enact property taxes.

Mayor Bobby Sutton, Jr. said at the regular session last week the decision had been a difficult one, but reiterated the tax will only be levied upon homeowners within the Gladden Farms district.

"We've always said that development is going to pay for itself and this is the way to assure that," Sutton said. "This was tough for some of the council members to get through, because any way you wrap it up, it's still a property tax. Marana has long been dedicated to not having a property tax, but we've been dedicated to not putting a property tax on the current residents of our community."

Councilmember Ed Honea, who had raised concerns about the tax during previous study sessions, indicated last week he was on board with the decision to form the district after talking to staff members everyday "for a long time."

"It's a very good government-private sector enterprise that benefits the entire community and all of us as well," Honea said.

The council met as the Gladden Facilities District Board in the third meeting. The board voted unanimously to authorize actions that included calling for the election and setting the budget and general plan for the district.

In an interview after the meeting, Town Manager Mike Reuwsaat said the $46 million to be held in reserve would simply provide the town with "flexibility" beyond the projects already earmarked for Gladden Farms.

"A good example is, let's say we don't charge specific impact fees for (building) public infrastructure that the district would benefit from in the future, we would have the capacity for issuing bonds for the benefit the district would receive. Maybe its a traffic light or a library or an interchange. We would have that flexibility to build it," Reuwsaat said.

He also said he believes the Gladden Farms district is the first of many community facilities districts that will be levying taxes on new development in Marana.

The town has already built provisions into development agreements with at least three other builders of proposed developments in North Marana that would allow for setting up facilities districts, Reuwsaat said.

"Most of the development agreements that we have worked through recently or are working through now have the option available. It doesn't say we'll approve it, because that's a council decision, but the tool is available to us," Reuwsaat said.

In the council's first meeting, members met for a study session to examine the benefits and drawbacks of setting up three entities geared toward community development - an Industrial Development Authority, the Marana Resource Corporation and a Community Housing Development Authority.

The council was briefed by Anne Morales, a Tucson attorney who has helped other communities establish IDAs and community-based nonprofit organizations.

An IDA is a political subdivision recognized by the state that promotes industry and affordable housing through the sale of bonds. Other jurisdictions that have set up IDA's have used the authority to lure industry and jobs by improving infrastructure and offering tax breaks to businesses that locate within a specific area.

Reuwsaat said the IDA would be applied primarily to the area centered on I-10 north of Avra Valley Road extending to the Pinal County line that includes the town's Marana-Northwest Regional Airport. The town is hoping to make the airport and corridor along the interstate an industrial and employment hub that will create a job base in Marana.

The town is also exploring the idea of setting up the Marana Resource Corporation as a separate extension of the IDA. The nonprofit board would engage in projects and activities that the IDA is not allowed to do, such as overseeing home ownership programs and applying for various state and federal loans.

The Community Housing Development Authority would be a program operated under federal guidelines established by the department of Housing and Urban Development to provide housing to low-to moderate income families.

If established by the town, the housing authority would be able to apply for HUD funding and grants to help build and administer affordable housing in Marana, Reuwsaat said.

"All three of these entities are tools we want to have in the tool box for economic development. We're looking for opportunities so that as we grow, we have these things available to make sure we have affordable housing and the industrial development that will bring jobs to the town," Reuwsaat said after the meeting.

Reuwsaat said the council would be considering establishing the three boards at council meetings later his year

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