America the Messy Yard Police State

Mesa uses messy yard laws to give beer business corporate welfare?

  This is kind of odd. While the city of Mesa is passing laws to make it difficult to buy medical marijuana it is giving out millions in corporate welfare to a beer company!

The city of Mesa also seems to be using the "messy yard" laws to help it get the property it will more or less give away to the beer company!


Mesa to own beer-distribution plant

by Gary Nelson - Feb. 2, 2011 10:12 AM

The Arizona Republic

After a vote expected in Monday's City Council meeting, Mesa will soon become the proud owner of a major beer-distribution center.

As surprising as that may seem for a city founded - and still largely influenced by - rock-ribbed Mormons, Mesa sees it as a necessary part of its economic development strategy and a badly needed boost for the west side.

The deal is likely to sail through a City Council that has made economic development one of the cornerstones of its overall strategy for Mesa, even though it will involve a couple of steps that have created some heartburn in Arizona.

- First, the council must determine that about 23 acres at Broadway Road and Longmore fit the definition of a slum or blighted area; some Arizona cities have been accused of abusing that power in the past, trampling on private-property rights. It will take five council votes, not the usual four, for that resolution to pass - but this particular case is viewed as non-controversial because it involves one willing property owner.

- Next, the council must approve a development agreement allowing Crescent Crown Distributing LLC to take advantage of a property-tax break that goes by the acronym GPLET. Some taxpayer-advocate groups have criticized GPLETs as being too favorable to businesses.

GPLETs are among the few economic-development tools Arizona cities have at their disposal to lure large employers. Crescent Crown's corporate headquarters and distribution facilities will employ about 450 people and dish out almost $22 million in annual payroll.

The basic idea is that after a company builds its facility, it conveys the property to the city and then leases it back. In this case rent will be $1 a year.

Since government property is generally exempt from property taxes, the property taxes on the new buildings are eliminated. Instead, the company, which retains control of the operation, pays what's called a government property lease excise tax, or GPLET.

GPLETs are assessed on the square footage of a facility, not its assessed property value, and they are lower than property taxes.

Mesa hired a Tempe consulting firm, Nielsen-Fackler Planning & Development, to crunch the numbers on the Crescent Crown deal. That step was required by state law, which says GPLET projects must be shown to deliver more economic benefit than they are costing in tax breaks.

The consultants figured Crescent Crown will save nearly $1.5 million in property taxes during the 20 years it plans to lease the property from Mesa. At the end of the 20 years ownership reverts to the company.

But over that same time, the projected GPLET will generate $4.3 million that otherwise would not have been paid had the property not been developed.

Mesa, the county and state will get some of that money but most of it - a net $3.14 million over the 20 years - will go to Mesa Public Schools.

Crescent Crown also stands to benefit from possible state tax breaks because of anticipated job creation in an economic enterprise zone. Those breaks could total nearly $1.2 million over time.

Mesa also has agreed to waive $100,000 it normally would have charged for speeded-up review of Crescent Crown's plans by city staffers, and to help the company get a $100,000 workforce training grant from a county program.

The "slum" designation came into play because nobody at City Hall saw any possibility for the site on the north side of Broadway Road ever to be developed otherwise, and such a designation is a prerequisite in GPLET deals.

The land includes several parcels; some are vacant and others are occupied by older buildings, most notably a decrepit warehouse at 1554 W. Longmore.

Dennis Kavanaugh, who represents the neighborhood on City Council, said Mesa agreed to offer the GPLET "due to the number of jobs, the significant annual payroll, the corporate headquarters relocation as well as the willingness of the company to invest in the Broadway Corridor."

Broadway, Kavanaugh said, "has been one of the focus areas of economic reinvestment since the closure of Motorola and the front-end auto dealers" that used to line the street.

Kavanaugh said Crescent Crown could help lift a struggling part of Mesa up by its bootstraps.

"I believe the presence of Crescent Crown will be an asset as the city works with neighborhoods to the south to stabilize and strengthen them," he said. "This will provide job opportunities for west Mesa residents without the baggage or expense of a long commute time."

Pending approval, construction of the office and distribution facility is to begin next month; the company's move from south Phoenix will occur in about a year.


America the Messy Yard Police State