Incentives on Council agenda

Kingman Crossing will be key topic at Monday’s meeting

KINGMAN - Efforts are ongoing to advance the Kingman Crossing project, as evidenced by several issues to be discussed Monday at the City Council meeting.

The city expects the developer of the 200 acres on the north side of Interstate 40, Vestar Development Co., to propose that the city pay a portion of sales taxes for construction of an interchange.

Vestar has made similar agreements with other Arizona communities in the past. They're meant to attract and entice developers to build, and they serve as a reimbursement for construction that the city wouldn't be able to pay for without offering tax incentives. Basically, the developer fronts the costs, and a percentage of sales taxes generated from the retail center are given to the developer over a several-month period.

In preparation, Economic Development Director Jeff Weir will present Council with a policy that would allow the city to enter into such agreements in the future.

"It's my understanding that the purpose of implementing a policy is to prevent the city and citizens from being taken advantage of in the future," Finance Director Coral Loyd said Friday.

With a policy in place, any developer's proposal would have to meet the established guidelines for Council to even consider an agreement.

Policy gives city flexibility

While the policy isn't an actual contract, it gives the city the legal ability to eventually come to an agreement with Vestar that would give the company a portion of the sales taxes generated from the new shopping district.

Several months ago in a meeting with city officials, Vestar used what was said to be an example of 60 percent - that being the portion of all sales taxes collected to be offered to the company as an incentive to build.

The mayor and Council have been mostly opposed to the idea of giving away sales taxes because it is the main source of revenue for the city. It pays for more than half of all city services.

This policy to be presented isn't specifically addressing the expected proposal from Vestar, though, Loyd said.

"Knowing that we're growing and knowing that we will be approached, we wanted to plan for that and get out ahead of that," she said.

Impact study possible

There is another agenda item that is Vestar-specific, however. Council will hear a presentation to hire a third party to research and compile a report on the economic and fiscal impacts of entering into such an agreement.

According to the staff report, the owner of the property and Vestar "would like for the city of Kingman to consider entering into a public/private partnership for infrastructure costs with cost-reimbursements to be specified in a potential economic development agreement."

State law requires cities to hire a third party to research the impacts before entering into an agreement.

The city expects government critics to oppose the measures and repeat the "cart before the horse" phrase, which has come up at several Kingman Crossing meetings already.

Council is planning ahead

With the state land still not sold, a referendum likely on its way to the November ballot challenging the land use designation at Kingman Crossing, and nothing specifically planned yet on the mall or interchange, Loyd said she understands the use of the term.

To counter, however, she said these sorts of steps - the impact study and the incentive policy - need to be taken to ensure that the city knows how to deal with a proposal when it reaches the city.

"That's all it is - just planning," she said.

"Which in the past we've been accused of not (doing)," Public Works Director Jack Kramer added.

It's still up to Council to accept the policy on incentives and hire the third party, at a cost of $4,500. Council may say it doesn't want to look at any policy because a proposal would not be accepted, Loyd said, speculatively.

The meeting starts at 6 p.m. in Council Chambers, 310 N. Fourth St.