Two years ago, the City of Scottsdale found it could no longer ignore the fact that the Ellman Companies, owners of Los Arcos Mall, were unwilling or unable to reverse the Mall?’s physical and commercial decline. Ignoring a ?“free enterprise?” solution to the problem, the city declared the 23 acre Mall real estate and some 65 acres of surrounding properties a Redevelopment Area.
With the city?’s solution to the Ellman Companies?’ problems a diverse list of long-established, successfully operating small businesses are faced with the prospect of having their properties and leaseholds taken by eminent domain.
Beyond dislocating viable businesses for the apparent benefit of a competing property owner, the city?’s solution also reaches into the pockets of city and the state taxpayers by endorsing ?“free lunch?” financing.
?“Free lunch?” comes in the form of ?“Tax Increment Financing?”. A delicacy Scottsdale taxpayers have been fed over the past several years to justify the granting of tax subsidies or water-fee abatements to the likes of Dial Corporation, Finovia, Westcor, FLW auto dealers, Nordstrom?’s, the Waterfront Canals project and, most recently, Pederson?’s north Scottsdale mall complex.
It comes in the form of ?“pie in the sky,?” a promise of sales tax revenues from a feeding frenzy of retail sales created out of hockey games. But, claims that new commercial projects generate new sales tax dollars are unfounded.
The Valley?’s disposable income attracted to Scottsdale by the proposed complex is simply diverted from other, competing retail operations both in and out of Scottsdale. When the sales taxes from those diverted retail dollars go back to the developers in the form of Tax Increment Financing, they are no longer available for sale-tax supported state functions. State needs still have to be met. Ultimately, the taxpayers will have to make up for that diverted tax revenue.
Recent legislation requires Scottsdale to match the state sales taxes diverted to the Los Arcos developer. Despite its claims that this obligation will not require new taxes, City Hall refuses to say how the city will come up with $100 million in matching funds. But, no matter what they call it, the required dollars will be paid for by the taxpayers.
What of the real property taxes lost if the Los Arcos scheme is adopted? It will automatically exempt Redevelopment Area properties from paying future property taxes, 53% of which fund the Scottsdale Unified School District. The developer says it will ?“replace?” these lost taxes. In perpetuity? At present assessment levels? At future increased rates? Secured by first-priority liens on the property? Like so many questions, these go unanswered.
According to Los Arcos plan proponents, is that unless the mall is redeveloped into an entertainment center anchored by a hockey arena, the area is doomed to deterioration. It is, they say, the only solution to the problem.
But, what of the owner?’s other plan? The one originally proposed by the Ellman Companies projected $6 million in annual sales taxes for Scottsdale and the State without a hockey arena, without Tax Increment Financing and without the loss of real estate tax revenues. Apparently, they have lost sight of that plan in the glitter of Tax Increment Financing.
A ?“no?” vote on May 18 will clear the decks for a thoughtful, resident-sensitive plan. One proportional to the neighborhoods that surround it, cognizant of the city?’s infrastructure limitations, protective of our tax dollars and respectful of what Scottsdale was and wishes to continue being: a pleasant place to live and a unique place to visit.
For a fuller explanation of Los Arcos Redevelopment and Tax Increment Financing, e-mail gzraket@aol.com.
By Councilman George Zraket
With the city?’s solution to the Ellman Companies?’ problems a diverse list of long-established, successfully operating small businesses are faced with the prospect of having their properties and leaseholds taken by eminent domain.
Beyond dislocating viable businesses for the apparent benefit of a competing property owner, the city?’s solution also reaches into the pockets of city and the state taxpayers by endorsing ?“free lunch?” financing.
?“Free lunch?” comes in the form of ?“Tax Increment Financing?”. A delicacy Scottsdale taxpayers have been fed over the past several years to justify the granting of tax subsidies or water-fee abatements to the likes of Dial Corporation, Finovia, Westcor, FLW auto dealers, Nordstrom?’s, the Waterfront Canals project and, most recently, Pederson?’s north Scottsdale mall complex.
It comes in the form of ?“pie in the sky,?” a promise of sales tax revenues from a feeding frenzy of retail sales created out of hockey games. But, claims that new commercial projects generate new sales tax dollars are unfounded.
The Valley?’s disposable income attracted to Scottsdale by the proposed complex is simply diverted from other, competing retail operations both in and out of Scottsdale. When the sales taxes from those diverted retail dollars go back to the developers in the form of Tax Increment Financing, they are no longer available for sale-tax supported state functions. State needs still have to be met. Ultimately, the taxpayers will have to make up for that diverted tax revenue.
Recent legislation requires Scottsdale to match the state sales taxes diverted to the Los Arcos developer. Despite its claims that this obligation will not require new taxes, City Hall refuses to say how the city will come up with $100 million in matching funds. But, no matter what they call it, the required dollars will be paid for by the taxpayers.
What of the real property taxes lost if the Los Arcos scheme is adopted? It will automatically exempt Redevelopment Area properties from paying future property taxes, 53% of which fund the Scottsdale Unified School District. The developer says it will ?“replace?” these lost taxes. In perpetuity? At present assessment levels? At future increased rates? Secured by first-priority liens on the property? Like so many questions, these go unanswered.
According to Los Arcos plan proponents, is that unless the mall is redeveloped into an entertainment center anchored by a hockey arena, the area is doomed to deterioration. It is, they say, the only solution to the problem.
But, what of the owner?’s other plan? The one originally proposed by the Ellman Companies projected $6 million in annual sales taxes for Scottsdale and the State without a hockey arena, without Tax Increment Financing and without the loss of real estate tax revenues. Apparently, they have lost sight of that plan in the glitter of Tax Increment Financing.
A ?“no?” vote on May 18 will clear the decks for a thoughtful, resident-sensitive plan. One proportional to the neighborhoods that surround it, cognizant of the city?’s infrastructure limitations, protective of our tax dollars and respectful of what Scottsdale was and wishes to continue being: a pleasant place to live and a unique place to visit.
For a fuller explanation of Los Arcos Redevelopment and Tax Increment Financing, e-mail gzraket@aol.com.
By Councilman George Zraket
