Mesa unanimously establishes Apollo Theme Park District for 80-acre Fiesta Mall redevelopment

meeting to order. Currently, we have Miss Go forth virtually and perhaps Vice Mayor Summers and Council Member Taylor will join us by Zoom. Other than that, all council members are present. With that, we are here for item 1A is a resolution approving the formation of the Apollo theme park district and electing two city council members to serve on the district board of directors and approving a development and intergovernmental agreement.

So, prior to this or after this, we're going to have a presentation by Mr. Robbins about what a theme park district is. So, Jeff, take it away. Jeff, before you start, uh, Miss Go forth, uh, Vice Mayor Summers, can you hear us? Okay. Yes, I can. Thank you. I can. Can you hear me? We can. Thank you. All right, Mr. Robbins. Uh, mayor, council, it's it's good to be with you today. My name is Jeff Robbins. I'm the redevelopment administrator for the city.

Uh the city council has uh set a high bar for the quality of development that comes to the city and um a theme park district is a statewide economic development tool um that lays the foundation for a um higher caliber and um a special type of um entertainment centric district. And today I'll be walking through a presentation that explains the purpose of theme park districts and um some of the items uh for action that are before you today.

So the city of Mesa was approached by um the owner of the privately owned 80 acre um property that is the former location of the Fiesta Mall. And uh we were approached to create a theme park district over that property. theme park districts provide both a dedicated financing as well as a dedicated governance mechanism to support development and in this case redevelopment. Um the city has been involved with the Fiesta Mall site for many years.

The office of economic development has been in close communication for over a decade with the ownership helping to prepare the site. In 2019, uh, the Fiesta Mall officially closed. Demolition began in 2023. And then the city council, um, laying the groundwork for future redevelopment of the site approved a resoning to an infill development district 2 or an ID2, which is a very flexible zoning that allows for a broad uh, mix of uses.

Um, as mentioned, the property owners have approached the city to form this district. Theme park districts are allowed by Arizona revised statutes and uh very importantly they are separate legal and financial entities from the city. Um if the city council were to form this district today, this would be the second theme park district that has been formed in Arizona. However, it would be the only active functioning um district at this time. Theme parks uh districts have a number of unique powers.

First is the power to acquire, construct, renovate or lease district facilities. They may also levy a transaction privilege tax or TPT on business activity um within the district boundaries. It's very important to note that this does in no way inhibit or prohibit the city from collecting our TPT as normal within the boundaries of the district the same as we collect them outside the district. So there is really no difference to the city. Mean park districts also may issue revenue bonds.

Um this is not city debt. the city is not um have any obligation whatsoever to cover that. It's it's um the responsibility of the district which issues that debt. Theme parks um districts are operated by a four member board. Uh one of the actions before you today council is the appointment of two city council members, excuse me, the election of two city council members to that board. Um council member Eradia and council member Adams.

The other two are um appointed by the speaker of the house and then one is appointed by the senate president. Before you today council is an action item for the approval of a development and intergovernmental agreement with the district and the property owners. There are several key terms to that agreement. The first is the city bears no financial responsibility for district debts or obligations.

um any public improvements that are created by the district in the boundaries, they must meet city engineering standards and be dedicated to the city, which is um the exact same as anywhere outside of the city as well. Um so we're just stating that there's no special treatment here. It's it's it's the same as outside the district. The owner and successor owner must maintain a replenishable expense fund to cover the city's costs related to the district district formation and oversight.

and the city must hire its own professional administrative um and um professional support staff. They are not using our staff for the administration of the district. Um if there was ever to be a legal action against the district, the district, the owner, and the successor owner must indemnify the city. Again, this goes back to it being a separate legal entity from the city.

Um and then of course, uh with all of the planning and the work the city has done, we anticipate that this will be a very desirable place to do business.

One of the terms of the agreement is that the district is obligated to have a disclosure signed by any u owners or businesses that are entering the district so that they are um very aware uh that the business that is conducted inside the district may be subject to an additional district TPT on addition to the state and local TPT for the fiscal impact of the city. The city has no obligation for district operations or maintenance within the district.

Um except for again any improvements that are formally dedicated to the city. This is the exact same as any private development in the city that dedicates public infrastructure to the city. There is a potential property tax exemption that does exist under state law. It's not automatic. And because the city of Mesa does not have a primary property tax, it would only affect the secondary property tax within the district, which as of fiscal year 25 was estimated at $17, um $500.

So, council, before you are the uh three actions. Uh first is the approval of the formation of a theme park district. And as the mayor mentioned at the beginning of the meeting, this is the Paulo district would be the name of the district. The election of two city council members to the district's four member governing board. And finally, the approval of a development and intergovernmental agreement between the city, the Palo district, and the property owners.

Mayor, council, staff is ready for any questions you may have. Thank you, Mr. Robbins. Um, before I any questions from council here and and we can go with those on Zoom, thank you, Miss Taylor, for joining. Miss Gold forth, Miss Taylor, Vice Mayor, any questions from your you, any of you? No questions for me at this time. Thank you, mayor. No questions for me. Thank you, mayor. Yeah, I have a question, mayor.

Just just to confirm, what is the city's responsibilities after formation of the district? What, if any? You talked about what we were not obligated to do. Is there anything that we are obligated to do once the formation happens? Mayor and council member go forth. There there really isn't. It's a separate it's a it's a separate tax entity. It's really sort of a redevelopment tool, a vehicle if you will to allow for financing for the type of theme park improvements that Jeff talked about. Okay.

And then my other question is about the secondary property tax possible exemption. The board determines that. Is that right, Jeff? Oh, uh, mayor, may mayor, council member. Um, so the secondary property tax is the tax that's collected by the city. Currently, the city does have a city uh secondary property tax. Um, so that is not determined by um the the board of the district. No, the exemption you said they they may be paying.

So, mayor, mayor and council, if I can, it depends on how the board decides to own certain property. By way of example, the the the board may choose to own uh a stadium, a piece of property in which a stadium might be built and the stadium itself. And if it forms it that way, then it would be exempt. If it structures it differently, it it wouldn't be. And so a portion of the property may become tax exempt depending on how the how the district owns both the the property and the improvement.

I'm sorry. Uh Jim, will you sorry will you repeat the very beginning beginning of um that that they own it? Did you say with the city? No, it depends. It depends on how the district chooses to own um improvements. And so the district could own a the both the the land and a stadium. And if they chose to own both the land and the stadium, then that would be that port that land that portion of the of the site would become tax exempt.

So if they it depends on how the district structures their ownership um and chooses whether to own a portion of the property, then that portion of the property would become tax exempt. Okay. Is that tax exempt on that secondary property tax? It would be it's just as if the city of Mesa it's tax exempt for all purposes including the city of Mesa secondary property tax.

Um obviously then the site is going to generate a lot of other type of taxes too that will benefit the city and and other entities. Um the sales tax. Miss Goforth, any other questions? Um, no. That that's really my only comment and concern is that is that exemption. Um, I know you you have 17,500 here, but that's without any of those improvements. I mean, but you know, that goes up significantly once it was in once it's improved. Correct. Mayor.

Um I I would just add too though that this is the same tax treatment of any other governmental uh entity that operates within the city of Mesa. It's not unique to this district. Any other governmental entity is also exempt from those secondary taxes. So if you know whether it be the county, whether it's uh the school district, uh any other governmental entity within the city has that same exemption. So it's it's because this is a governmental entity that's being formed.

That's why it receives that tax treatment. Interesting. I understand that. But those are those are uh nonprofit, right? You you know, we're talking about a for-profit enterprise here. But I I understand your point, Scott. Miss Duff, did you have a question? No. Yeah. My question was in in in what form and but you explained it in because they're creating their own government for the district that it qualifies under that. I was wondering what if it's chiplet or whatever.

So my question is answered. Thank you council. Any other questions? All right. Well then hearing none and nothing from online from our zoom call. I'll ask for a motion to approve this resolution appointing Francisco Heredia and Richard Adams to the uh theme park district known as Palo. And with that, I'll entertain a motion. Thank you, Mr. Radia. Miss Duff. Any other questions? If not, all in favor say I. I. I. I. Okay. Motion passes unanimously. All right.

That's all we have the items for this special council meeting. Is there a motion to adjurnn? Thank you, Mr. Adams. Mr. All in favor say I. I. Thank you for those online. Have a great rest of the day. We're done. Happy Thanksgiving. Thanksgiving. Yes. Thanksgiving.