The Town of Oro Valley has adopted an incentive program intended to attract new primary employers to the area and retain the ones that have already set up shop.
This recent step is part of a larger mission of the town council aiming to overhaul their economic development strategy and bring in new job opportunities.
At the July 15 council meeting, Community and Economic Development Director JJ Johnston said an incentive program such as this is a key economic development tool required by site selectors, who scout for project locations across the country on behalf of companies interested in expanding or relocating their operations.
Primary employers are businesses that export more goods or services than can be consumed by the local economy, meaning the salaries of employees who work there are paid by consumers outside Oro Valley.
The incentive program drawn up by town staff identifies who can qualify for the program and provides a menu of various incentive options that eligible employers can choose from depending on their situation.
The minimum requirement for a primary employer in Oro Valley is that they must make a $1 million direct capital investment or create at least 10 new full-time primary employment jobs that pay at least $40,000 per year and meet certain requirements.
These employers can request fee reductions, reimbursement for construction sales taxes for certain expenditures, fast-track permitting and other benefits through the program.
“These incentive reimbursements will help offset qualifying expenditures by the primary employer such as required new public infrastructure improvements, offsetting impact fees, employee relocation and qualified job training programs, exterior building aesthetics and renovation expenses,” according to town documents.
Johnston assured the council that as part of this incentive program, a third-party analysis will be conducted to make sure the town is in compliance with the Arizona Gift Clause, which prohibits state and local governments from giving financial gifts to private entities.
Every project will require a council-approved contract. A primary employer must earn the town’s incentive through capital investment or job creation before the incentives are realized by the employer, according to town documents. Even with the maximum allowable incentive options, a primary employer will still generate new direct and indirect net revenue for the local community.
Johnston told the council Oro Valley is at a significant competitive disadvantage for new business projects without a primary employer incentive program in place. The town is currently in the “final four” phase of the site selection process for several companies; this program gets them one step closer to securing one of those prospects, according to Johnston.
“I’m excited to see us adding a tool in our recruitment and retention of businesses,” said Oro Valley Chamber of Commerce President Dave Perry. “As we look at Roche making these great investments in its campus here, this would be a tool to help other people make those kinds of investments so that they stay in our community. The competition is intense, and it is only intensifying as communities face this once-in-a-lifetime moment that we are all in.”
He said he appreciates the checks and balances built into the program which require staff and council approval, and likes that the incentives will only be earned after the economic benefits are realized by the town.
To learn more about the incentive program, visit orovalleyaz.gov/government.