Water park project gets nod from Valley Business Owners - East Valley Tribune: News

Water park project gets nod from Valley Business Owners

Font Size:
Default font size
Larger font size

Posted: Wednesday, March 7, 2007 4:17 am | Updated: 7:58 pm, Fri Oct 7, 2011.

A Mesa group known for opposing big development projects in the Riverview area recently pledged its support to the Waveyard project, even as the pot of financial incentives was sweetened on the proposed resort.

Valley Business Owners (and Concerned Citizens) sent a letter of support last month to Richard Mladick and Jerry Hug, the financial partners and principal developers who established Waveyard Development LLC in Scottsdale.

The letter, signed by four officers of the group, states that the project “makes good economic sense for the city” and that the group “would anticipate providing active support” for a project that developers say would be a one-of-a-kind tourist destination for recreation such as kayaking, whitewater rafting, surfing, wakeboarding and rock climbing.

Jann Hibbard, the group’s secretary-treasurer, did not return phone calls asking for comment on Tuesday.

Waveyard officials announced Monday they had picked Mesa over Surprise to locate the water park and resort.

The development, however, will have to win voter approval in November — in large part because of the activist group. The organization was elemental in amending the city’s charter to require a vote on various projects that receive city incentive packages. The change was made in the 1990s, after the Arizona Cardinals flirted with the idea of locating a new stadium in Mesa.

In a recent letter, the group said its support for Waveyard hinged on the proposal being sent to Mesa voters “without material changes.”

Meanwhile, the Mesa Visitors and Convention Bureau board this week decided to add city incentives to a multi-million dollar, tax-rebate package that’s already been promised to Waveyard.

As part of the agreement, the visitors bureau would evenly split revenue generated on the city’s bed tax for rooms rented at the resort. This would allow Waveyard to pay off the $20 million it’s expected to owe the city for the estimated 120-acre site at Riverview.

The first phase of the Waveyard resort includes a 320-room resort hotel and convention center, plus European-themed residential villas. The bed tax at the resort is projected to generate $800,000 annually, half of which would be credited to Waveyard to pay off the debt it owes the city.

Stephen West, president of the visitors bureau board, said the incentives were not a giveaway.

“It’s all based on new revenue,” he explained. “If they bring in half of what they say they’re going to get, that’s a net benefit. That’s money we didn’t have.”

The last time the city doled out incentives at Riverview, the Valley Business Owners ran a high-dollar campaign to defeat the initiative. Despite the opposition, Mesa voters in 2005 approved the Mesa Riverview retail development, anchored by a Bass Pro Shops and Outdoor World and a Cinemark theater complex.

The approval was a setback for the group, which railed against a city incentive package totaling more than $80 million.

Mesa management analyst Scott Rigby said the Waveyard resort is a complex financial deal that would garner a public subsidy of no more than $20 million, plus the interest on the loan.

Under the agreement, the city anticipates selling Waveyard the land at Riverview for a total of about $30 million. Waveyard would pay $10 million up front, and the rest over 10 years.

To help pay the IOU for the land purchase, Mesa officials months ago announced they would credit to Waveyard half of the city’s percentage of the sales tax that’s generated at the resort.

But there is a catch. If the resort didn’t generate the roughly $2 million annually it owed the city from its half of the sales taxes, Waveyard would have to pay the difference. And splitting the bed tax would ensure that Waveyard wouldn’t have to dig into its own pockets to cover its debt to Mesa.

City officials also emphasize that none of the sales tax or bed tax credits, however, could be paid directly to the developers. All would be used to retire the developers’ debt for the Riverview property.

Waveyard’s Jerry Hug said “that’s a very important piece. There is a point in time when the project isn’t receiving an ongoing, evergreen benefit.”

  • Discuss


EastValleyTribune.com on Facebook


EastValleyTribune.com on Twitter


EastValleyTribune.com on Google+


Subscribe to EastValleyTribune.com via RSS

RSS Feeds

Your Az Jobs