Vanderbilt, Vestar speak at Town Hall hosted by RAID
KINGMAN - Representatives from the two firms slated to develop the Kingman Crossing I-40 interchange and shopping center spoke at a town hall meeting hosted by RAID at the Mohave County Library's Kingman branch Tuesday evening.
Ryan Desmond of Vestar Development, Jerry Willis of Vanderbilt Farms and Stuart Goodman, representing both, gave a short presentation on the current status of the interchange, then proceeded to field questions from the audience for 90 minutes.
Vice Mayor Janet Watson and Councilwoman Robin Gordon were also in attendance, chiming in on certain questions.
Willis said that in recent months, Vanderbilt and Vestar had already been working behind the scenes to begin discussions of water, sewer, utilities and rights of way needs with MedCath, whose Hualapai Mountain Medical Center is already being built near the site, as well as with 11 other area property owners.
He said the developers have also been working with UniSource Energy Services to determine the ideal route for a 13.5 kilovolt transmission line that would serve the shopping center as well as the hospital and other properties to the east. Desmond said they also coordinated with the Arizona Department of Transportation and the Federal Highway Administration to work out ingress and egress for the future development.
"We're trying to do it right the first time," Willis said. "In the course of working with the hospital, in the course of working with the various utility entities and the power company, you can see there's a tremendous amount of work and effort that's been going on."
Desmond featured conceptual drawings of what an outdoor Kingman Crossing mall might eventually look like, as well as photographs of other shopping centers that were jointly developed by Vanderbilt and Vestar across the state. He said the city's decision to hire attorney Andrew McGuire to negotiate with the developers was the first necessary step to begin discussing a development agreement to finance the interchange.
"That was really the next step that needed to take place, and one that we thought was a critical step," he said. "I think it's great the Council took that action, and we're looking forward to meeting Mr. McGuire and kicking off those discussions."
How to pay for it
The bulk of the evening's questions focused on exactly how the city would finance the interchange, how much it would cost the taxpayer, and what kinds of retailers would move into the shopping center.
Throughout the discussion, however, Watson reminded those present that the funding mechanisms for the interchange were still wholly undecided at this point, and that in the end, the city would likely use a combination of several. She urged citizens not to concern themselves too heavily with financing until after negotiations have begun. "We have to put together some financing mechanisms of what they can do, what perhaps the adjacent property owners might be able to do, what percentage the city should be responsible for," she said. "It's not really a simple answer, 'You're going to spend $100 a year,' or 'It's going to cost everybody ten dollars a month,' or anything like that.
"Until they and our attorney can get together and talk about lots of different options, what I expect will come to the City Council sometime down the road will be many options we can consider," she added.
Watson mentioned an infrastructure reimbursement agreement as one possible way of funding the interchange. Under such an agreement, the city would agree to use a portion of the new sales tax generated by the shopping development to pay for its cost over a period of time.
Goodman said such agreements were very popular for this kind of development, providing a low-risk option to the city and giving the developers good reason to fill the development with the most attractive retailers possible. It would also allow the city to immediately begin reaping the benefit of its new retail, while the existing sales tax base would remain unaffected, even if they were to relocate to the new development.
"If what Vestar and Vanderbilt build does not perform, let's say it generates no sales tax, I have no mechanism to come back to the city and say 'Whoops, we screwed up, you guys have to now assess your community or do something to pay me for the interchange I just built for you," Desmond said. "The risk would all be shouldered, in that case, on the developer; so we are heavily incentivized to create a project that works, not just for the community, but for the retailers, for the shoppers, for everybody, because if it doesn't generate any sales tax, we're on the hook."
Desmond also noted that, no matter what retailers Vestar draws to the development, state ordinance would require an independent third party to review the arrangement to determine whether or not the new retailers would, in fact, generate the sales tax revenue needed to sustain the development agreement. "The retailers that come into the project generate a certain amount of sales on average," he said. "From that number, we're able to determine what a project will likely generate in terms of sales tax revenue, which then helps you understand how much public infrastructure you can afford.