Redevelopment District Looks To Capture Sales Tax Growth

Tax revenues may have fallen since establishment of the district to fight blight in 2000

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The Green Valley Redevelopment District continued research on capturing money from any increase in business in the commercial area along and around Main Street, with a report to the board from Town Manager Debra Galbraith about the shift in businesses in the district since it was established in 2000.

Towns can capture an extra share of sales taxes in redevelopment districts, to use for streets, parks, drainage, recruiting new businesses and other measures designed to boost economic growth in areas that suffer from economic "blight."

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This map shows the boundaries of the Green Valley Redevelopment District.

However, Payson has never actually set up the funding mechanism. So the citizen redevelopment board and the town staff are working now on figuring out whether sales tax receipts have risen or fallen in the eight years the district has existed.

It "got lost in the shuffle," said GRVA Executive Director Ken Volz. "I don't know why it was not done."

Galbraith pulled together a rough list of businesses then and now, in hopes the district could verify which ones were operating within the district boundaries -- which run along Main Street, but also include a chunk of highway frontage and some parallel streets. She noted that those businesses paid about $16 million state sales tax in 2000, but that figure could include sales by the corporations that owned those businesses throughout the state.

The town collected just under $5 million in sales taxes in 2000, compared to about $5.5 million in 2006-07.

The town gets about 2 cents of the 8 cents per dollar of sales residents pay in sales tax, which suggests total retail sales tax collected in Payson last year totaled roughly $20 million.

The board and town staff hope to eventually come up with estimates that show whether business has grown, stalled or declined within the redevelopment district. The town would not release the list of businesses and total taxes on the grounds that the total payments by a group of identified businesses is confidential information.

At the meeting, Galbraith told committee members, "The assumption would be that it (total sales tax) would have gone up," for the period. But Volz acknowledged that revenue has gone down, "but we have seen it go down all over town."

Committee member Mark Waldrop said, "There may be something skewing those numbers."

A number of businesses included on the list, more 300 in all, have closed, and some businesses in the redevelopment area were left off the list. Galbraith said she would recheck the numbers and list of businesses for an upcoming meeting.

Galbraith explained some of the change might be due to new businesses in the area that do not bring in the same amount of sales tax revenue as previous businesses.

Volz said more professional and service businesses operate on Main Street than in the past.

"This is a red flag to us that we need to develop new strategies," Volz said to the committee. "This could be showing us the repercussions of choosing different businesses."

Volz said if a business wants to open on Main Street, the committee has been in the habit of saying ‘yes,' because they need to fill the vacant shops.

"We try to get them in, to occupy spaces," he said.

The GVRA was established in 2000 by the Payson Town Council to redevelop the Main Street area.

The council established the need to develop the area based on crime and socio-economic data that showed the area was not performing at the same level as the rest of town, Volz said.

"Main Street has improved from where it was," Volz said. "But it still has a long way to go.

"It has been a gradual process over the eight years, to bring business back," Volz said.

"The issue is what can we do to minimize the exodus of businesses from Main Street."

Volz, who has been on the committee for two years, said the original committee lost sight of redevelopment.

"They got too preoccupied with Main Street instead of the larger GVRA," he said.

The current committee is expanding its focus to include a larger area.

The committee plans to get on the town's budget next year to receive sales tax increment money. The committee needs to establish a baseline with the city in order to receive additional sales tax revenue the next year.

The committee's next meeting is Oct. 2, at 8:15 a.m., at the Community Presbyterian Church, 800 W. Main Street.

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