Visionary City Leaders Find New Revenue Sources In Changing Retail Environment
Natascha Ovando-Karadsheh
It is no secret web-based retailers, like Amazon, have radically changed the way we shop.
With more and more transactions taking place online each day, fewer local businesses are making face-to-face purchases. While the Internet makes shopping much more convenient, the rise of e-commerce also has resulted in less sales tax revenue for cities. This national trend is alarming for cities, like Mesa, which do not have a primary property tax and are heavily dependent on sales tax revenue to fund necessary services.
Faced with the challenge of a changing retail environment, Mesa’s leaders thought outside the box and planned ahead. Drawing inspiration from places like California’s Silicon Valley and Virginia’s Data Center Alley, Mesa developed a technology corridor along Elliot Road up against the large SRP power line situated between Guadalupe and Elliot.
The Elliot Road Tech Corridor was thoughtfully designed with the infrastructure needed to attract large data centers and industrial prospects. Why these types of businesses? First of all, we had the unique opportunity of place and infrastructure. Secondly, data centers, manufacturers and industrial enterprises buy a large volume of electricity.
The City of Mesa has the capacity to charge sales tax on every kilowatt-hour of electricity purchased by businesses. Electricity sales taxes now generate millions of dollars in revenue every year for the city, helping to offset the decline in localized sales tax from retail operations.
The numbers are impressive. If an average data center has 120 megawatt power load,* that same data center can generate more than $1.1 million in city sales tax revenue every year on electricity purchases alone—or roughly the equivalent of $14,000 per acre.
Stretching along Elliot Road, from Signal Butte Road, to Hawes Road, Mesa’s Elliot Road Tech Corridor currently is home to Apple’s $2 billion Global Command Center, EdgeCore, Niagara and more large-scale projects on the way. In fact, acreage in Mesa’s Elliot Road Tech Corridor is being absorbed at an accelerating rate, offering continued opportunity for Mesa in the coming years.
Coming out of the recession was no easy feat for our past and present city leaders. In fact, they are to be commended for having the vision to think years ahead to mitigate our changing fiscal environment. Mesa needs to continue to build on this success and maximize revenue from the Elliot Road Corridor for years to come, while visioning new projects that provide our city with continued fiscal opportunity. The siren call of housing permit fees always is strongest when the economy is booming, but we must look ahead toward the future and continue to prepare for a changing world.
Mesa native and Las Sendas resident Natascha Ovando-Karadsheh is chair of the City of Mesa Economic Development Advisory Board, Associate Broker, owner of KOR Properties and the founder of Mesa Food Truck Fridays. A graduate of Princeton University and The French Culinary Institute, she is a member of Who’s Who in Luxury Real Estate.