The Town of Oro Valley could see a positive fiscal impact for years to come should the mayor and council move forward with annexing the Westward Look Resort, according to a recently released fiscal impact report.
The report indicates annexing the resort would have a positive annual net impact of about $916,000. Furthermore, the town could pocket an additional $61,000 to $562,000 depending on which of the three potential economic development plans they choose for 18 acres of property along Ina Road which surrounds the resort’s entrance. The property is split into two parcels—Gateway West which has 4.84 acres and Gateway East with the remaining 13.15 acres—would be rezoned for commercial and residential development.
Phonician economic and research consultants, Applied Economic, compiled the report at the request of the town.
Oro Valley’s Assistant Town Manager Chris Cornelison said the purpose of the report was to make sure annexation of Westward Look would be fiscally sound for the town’s residents, as a part of their updated annexation strategy.
“We have it in our policy that in order to annex that property, we must not create a financial burden to our community. There must be some positive impact,” Cornelison said. “As a result, we conducted the fiscal impact analysis in order to evaluate whether or not (annexation of Westward Look) is financially positive for the town.”
According to the report, Plan A would add 30,000 square feet of retail and restaurant space in Gateway West and 184 luxury apartments throughout Gateway East. Plan B would add 35,000 square feet of office and retail space in Gateway West and 76,000 square feet of retail, restaurant and office space as well as a 58,000 square-foot business-class hotel in Gateway East. Plan C is more geared toward residential development with 38 one and two bedroom units to be constructed in Gateway West and 250 luxury apartments popping up in Gateway East.
The net fiscal impacts for these development alternatives are dependent on the amount of acreage devoted to commercial development along with the non-retail uses within the development, according to the report.
Each one of the proposed plans have certain aspects that should be attractive to the town without one plan being significantly better than the other, according to Cornelison. However, the assistant town manager agrees that Plan B would provide the town with the most direct revenue if accepted, he said.
“The town’s revenue structure is really based upon bed tax and sales tax. Obviously our hotels, restaurants and retail bring in the most revenue for the town,” Cornelison said. “That doesn’t necessarily mean (Plan B) is the most advantageous because of population, foot traffic and vehicle traffic. All of those have an impact on how successful our retail, restaurants and hotels will be. It’s a combination of everything.”
The report states “the model used in this analysis allocates taxable sales exclusively to commercial land uses” and then notes nondevelopment could result in a potential missed sales tax opportunity considering “retail sales not captured within the development would be captured by other surrounding cities.”
Under the proposed plans, projected employment could range from 71 new jobs with Plan A, and about 363 new jobs with Plan B. Zero new jobs would be created with the residential-based Plan C.
The report also outlines potential taxable sales associated with each plan—Plan A could result in an additional $5.9 million of taxable sales and Plan B could add an extra $14.2 million of taxable sales. Plan C would add an additional $570,000 in taxable sales, according to the report. Without any development to the 18 acres along Ina Road, $9.2 million in taxable sales would be generated for the town just for annexing the resort.
As far as increased need for police because of the annexation, all three scenarios would require “less than one additional officer at build out,” costing approximately $159,691. However, the report shows a dramatic increase of estimated police calls to the area if developed. Currently, the resort makes approximately 33 calls for police assistance each year and whopping 216 calls under Plan C, according to the report.
“The largest on-going general fund expenditures for the existing resort property would be public safety, although the property does not generate a large number of calls,” according to the report.
The dollar amounts in the report are inflated to 2031 dollars to reflect potential annual fiscal impacts a decade from the project’s potential start date. An additional rate of 2% per year is included in the report’s calculations.
“The assumption of 10 years is somewhat of a standard, but we also asked the planning center what their expected timeline for a full build out,” Cornelison said. “Ten years is what they felt comfortable with.”