Payson councilmembers will discuss relaxing commercial water requirements Thursday as part of a plan to improve the town's multi-event center and stimulate commercial development in south Payson.
The issue will be one of two water-related proposals up for debate Thursday during a special 5 p.m. meeting at Town Hall. The council's regular meeting will follow at 6 p.m.
Town Manager Rich Underkofler, who wants to lease the multi-event center to a developer, said the town's current water requirements are keeping interested investors at bay.
Underkofler said he wants to seek a "contribution-in-aid-of-construction" for an all-weather arena roof, paved vehicle parking areas, concessions, public rest rooms and related facilities in exchange for a long-term lease that would enable a developer to build, operate or sublease commercial facilities on the premises.
"I'm thinking about one commercial developer, like a shopping center developer," Underkofler said Monday. "My thought is, we'd lease the whole site to one developer, and probably get a capital contribution ... in excess of $2 million. In exchange, we would let him develop the adjacent property for commercial uses."
To explore this and other avenues of economic development, Underkofler and other town officials have sought the advice of Phoenix attorney Bill Simms, whom Underkofler touts as "probably the most knowledgeable person in the state in terms of doing economic development deals relating to projects in Maricopa County."
Simms handled the America West Arena deal for the City of Phoenix and the Bank One Ballpark deal for Maricopa County.
In a June 26 memorandum to Mayor Ray Schum and the members of the council, Underkofler said that Simms had counseled that the multi-event center lease plan would not be fruitful for anyone if the developer were limited to commercial uses that meet town water requirements. In that event, Underkofler wrote, a developer under such a restraint would not be able to achieve a reasonable investment return.
According to the water department, an average residence consumes 7,500 gallons of water a month, and that is the figure the Community Development Department uses when it computes a project's expected water demand.
If the council agrees to the multi-event center lease plan, Underkofler said, "It would probably take six to eight months of marketing to be able to officially advertise the thing, and then it would go up for competitive proposals."
Several councilmembers, however, have already said they're concerned that relaxing water requirements for the multi-event center project would be unfair to other developers, Underkofler said.
At least two other major projects are already in the works near the multi-event center, he said, and their developers might cry foul.
The first is the Rim Overlook Project, which is being forced by the town to find and pay for a new source of water for its planned Marriott Fairfield Hotel.
The second is a hotel project on the Tonto Apache Reservation. The Tonto Apaches are currently looking for new water sources to supply the long-planned hotel.
Still, Underkofler said, he thinks "water-supply demand limits should be relaxed for 'good' economic development projects, especially those within the (Green Valley) Redevelopment Area."
An example of a "good" project, he said, is "the one we're talking about right now. We'd be getting a potential private investment of $2 million, and the town gets out of having to deal with making more and more expenditures to put a roof over (the multi-event center). An investment with that kind of economic attitude is a good project."
Additionally, the town would save money in payroll and productivity; improved quality of the venue; lease income for the town; and added tax revenue from the commercial development of the land, he said.
On the downside, Underkofler said, leasing the event center could mean new facility-use charges; loss of revenue for non-profit food and beverage vendors; and opposition by stakeholders such as the rodeo committee and the Rim Country Regional Chamber of Commerce.
According to town water experts, however, the town's water supply, which currently serves roughly 13,000 people, could sustain such a project.
"We have a water supply sufficient to manage 18,200 people," Town Hydrogeologist Mike Ploughe said. "That's like giving the councilmembers $18,200; how they choose to spend it in political terms is up to them. But the water is there."
Water fees and policies
The role the council plays in water policies now delegated to Public Works Director Buzz Walker is the subject of another request for Thursday's special meeting.
"Currently, when the Water Department makes some kind of administrative change, they don't notify their public the contractors who pay water development fees ahead of time, to give them any kind of notice," said Councilmember Jim Spencer, who filed the request. "The problem with that is, when a contractor bids a home or a project, he doesn't know there's going to be a change. He's stuck holding the bag."
Spencer said that, while he and his fellow councilmembers think they have found a way to notify contractors of such changes in advance, what they need to decide now is the time frame for fair advance notice and "Whether it should be 60 days or 90 days or whatever."
A second discussion will focus on the possible publication of a basic extension policy which, Spencer said, "would allow anybody to sit down and figure out what their development fee is going to be. Currently, Walker does that. However, it's pretty much in-house, and while he's consistent, I think there's a perception that he's not.
"We want to put that to bed by developing a little one-page fax sheet that tells you if you're going to build a restaurant, a hotel or a big home exactly how much your water development fee is going to be."
"It's just a basic, business-as-usual idea to help us move toward a friendlier, more open and communicative government," Spencer said.