Photo by Aaron Ricca.
KINGMAN – Despite a City Council vote last month to increase the TPT tax, some of which could be used on the Kingman Crossing project, Kingman Regional Medical Center is still willing to play ball in the Kingman Crossing game.
KRMC CEO Brian Turney spoke before the council to state KRMC’s case on purchasing city-owned acreage on the south side of Interstate 40. Council made no direction or decision, but merely listened to Turney’s proposition.
Turney said KRMC’s health and Kingman’s economy are dependent on each other and that KRMC is the largest economic driver in the area, having added 800 direct and 765 indirect jobs to the local economy in the last 10 years.
Current and projected changes in Medicare and Medicaid reimbursement (most of KRMC’s revenue comes from government payout) will impact the hospital’s economic health. KRMC is looking for additional revenue sources for future growth and sustainability.
Turney cited a 2017 Applied Economics study pointing to a significant opportunity for retail at Kingman Crossing, which he feels can generate sales tax revenue for the city.
Rattlesnake Wash, the other proposed expansion project, is also on KRMC’s radar.
“I think sometimes people misunderstand. We are not against Rattlesnake Wash,” Turney said. “In fact, we think the theory makes some sense. What we’re concerned about is the timing. From our standpoint, we don’t think they should be done simultaneously.”
Turney feels the proper level of analysis on the projects has not taken place.
“Both the city and KRMC have a potential valuable asset that can generate funds for both organizations and help us in the long run,” he said.
KRMC plans to borrow an estimated $22 million to construct Kingman Crossing. To help offset costs and provide incentives for a developer, the city would share future sales tax revenues generated by new businesses at the crossing. KRMC and the city would negotiate rates, cap and a period of time for the tax arrangement.
The hospital offered to buy city property south of Kingman Crossing at a negotiated amount acceptable to both KRMC and the city. Proceeds would help the city connect roads to Kingman Crossing and the land purchase would simplify development of the area by having the developer only having to deal with one entity.
KRMC would engage a commercial developer to design and implement phased development of the crossing as economically feasible. Community input will be considered for the overall development where residents will have choices for shopping, recreation and entertainment. Public safety facilities such as fire stations and efficient traffic flow requirements will be included in development. All in hopes of drawing more travelers from I-40.
“These are just thoughts,” Turney said. “Nothing is etched in stone. We do think long term that there is opportunity for retail growth and to make something happen at Kingman Crossing.”
Benefits to both KRMC and the City
According to Turney, KRMC would receive supplemental income through the development of additional land to help support long-term sustainability. Community improvements (stores, restaurants) could help attract difficult-to- recruit medical personnel, along with new businesses to provide jobs with health insurance benefits.
The city would get a fully-funded interchange without upfront costs with construction starting as early as 2020 and would also get money to help build connecting roadways.
Turney said the city will have minimal risks in crossing development because the plan strongly incentivizes the developer to generate new sales tax revenue and the city would only pay to the degree of project success. KRMC’s plan could reduce or eliminate a need to raise taxes.
Turney pointed out project risks including trends in the national economy, Kingman’s growth and, most obviously, disagreements about how to proceed.
“Quite honestly, we’re already seeing that,” he said.
Turney stressed the importance of a cordial relationship between KRMC and the City.
“We’re not asking for a sweetheart deal,” he said. “We’re just saying, ‘Here’s one solution.’ There are other solutions and we’re not shutting the door. We’re willing to have discussions.”
Councilman Travis Lingenfelter expressed concerns about proper infrastructure, especially roads connecting the north and south portions of town on each side of I-40. Last month’s sales tax raise was brought into the equation.
“The city is pretty stretched right now. We don’t have a lot of money to build roadways,” he said. “I don’t want to end up with another Airway (Avenue) underpass where you have to mess with roads.”
Mayor Monica Gates suggested scheduling a work session which would include outside experts from other cities that have built similar projects, to which Turney agreed.
“I totally agree that communication is what we need to have right now,” said Vice Mayor Jen Miles. “Not just tonight but going forward.”
More like this story
- Kingman Crossing gets the go-ahead with resolution from City Council
- Council disagrees over work on Kingman Crossing
- State Rep. Cobb is on board with two interchanges
- CEO says KRMC is facing $150 million in Medicare reimbursement cuts
- City Council approves funding mechanism for two I-40 interchanges