September 10, 2008
CALL TO ORDER - at 5:30 p.m.


Paul Loomis, Mayor
Al Kunisch, Vice Mayor
Paula Abbott, Council Member
K.C. Carter, Council Member
Barry Gillaspie, Council Member
Salette Latas, Council Member

EXCUSED: Bill Garner, Council Member

Council Member Gillaspie joined by telephone at 5:39 p.m. and arrived at 6:18 p.m.


Economic Incentives Policy Guidelines for Professional Level Job Creation

Economic Development Specialist Amanda Jacobs presented the Draft Economic Development Policy. Ms. Jacobs stated that the purpose was to promote professional level employment in the Town. She noted that the targeted industries were High-Tech/Bio-Tech, tourism/resort/convention facilities and hospital/medical facilities.

She noted that incentives would only apply when it has been demonstrated that the addition or expansion of a business would bring professional level employment to the community.

Ms. Jacobs explained the proposed policy guidelines:
~Fast Tracking
  *Upon request from the applicant, the Economic Development Division would
    form Project Teams to assist applicants through the development review and
    approval process.
  *Plans for Public Improvements
    -Initial expedited plan review would be completed within:
      ~Twelve working days for facilities less than 60,000 square feet and/or five acres in
        site development size.
      ~Seventeen working days for complex or facilities over 60,000 square feet and/or 5-20 
        acres in site development size
  *Building permits
    -Initial expedited plan review would be completed within:
      ~Twelve working days for facilities less than 60,000 square feet.
      ~Seventeen working days for complex or facilities over 60,000 square feet.
~Job Credits and Fee Waivers
  *Proposed criteria for job credits:
    -Employer must agree to create at least 20 full time jobs or the number of new jobs on
     which the credit is based, whichever is greater. 
     ~Eligible for $1,000 credit per full time employee.
     ~Maximum job credit would be $100,000 per parcel or project.
    -Business would enter a five year agreement with the Town.
     ~Employer would receive $1,000 per employee upon providing proof the employee has
       been with the company for one year.
~Environmental Sustainable Grant Program
  *The Town would rebate a percentage of building permit fees for businesses that obtain
    Leadership in Energy and Environmental Design (LEED) certification. The suggested
    rebates were listed as:
Certification 2.5%
Silver 5%
Gold 7.5%
Platinum 10%
    -The rebate would not exceed $100,000.

Discussion noted the following:
~The rebate was based on Building Permit Fees which would make the rebate
  smaller than if it were based on the Construction Sales Tax.
  *The rebate was designed to appeal to all businesses and to encourage small 
    businesses to conform to LEED standards.
~The benefits of LEED incentives to Oro Valley would be that it would reduce the strain
  on the utility grid and the aquafer. 
~The Town is short on land
~The General Fund or the 2% Bed Tax that Economic Development receives, would be the
  proposed source of funding for the rebate.
~Unused funds from the Bed Tax are carried forward from year to year.

Mayor Loomis opened the floor for public comment.

Oro Valley resident Doug McKee noted that the real enticements for business were good schools and transportation. He stated that he did not feel these incentives would draw business to Oro Valley.

Oro Valley resident Joe Hornat stated that some economic incentive was important to the community. He asked for clarification regarding the rebate and whether building fees were exclusive of impact fees. He noted that fast tracking was difficult to provide and made it tough to meet deadlines.

Oro Valley resident Bill Adler noted that when the Town takes the lead and builds according to LEED standards, it would negate the need to offer incentives.
Sanofi Aventis Tucson Site Director Beth Koch stated that:
~Businesses moving in would be looking for capital assistance. 
~Job creation, LEED and fast tracking, were important elements that they wished to 
  partner with the Town.
~The Town must have the water and sewage capacity needed.
~For high paying jobs, much of the talent would have to be brought in from out of
  state, whereas to hire a University of Arizona graduate, the jobs would have to pay less
  due to the lack of expertise.

Construction Project Manager John Cocco concurred that land and sewage capacity were necessities. He clarified that a three year return was preferable however, LEED promoted good public relations. He stated that fast tracking value varied from one company to another.

Mr. Cocco noted the cost associated to attain LEED certification at various levels:
Silver $500,000
Gold $1M - $2 1/2M
Platinum Very costly; typically afforded by government agencies.
He explained that with the LEED program, the rate of return was minimal, however Sanofi Aventis was committed to sustainability. He noted that to sell LEED certification to a company, it would depend on the company’s policy and commitment to sustainability.

Mayor Loomis directed staff to research the economic impact of a company's employee base.

Ms. Jacobs stated that the Shovel Ready Program was like fast tracking, however, under the Town’s current process, a Shovel Ready Program was not feasible.

At the request of the Mayor, Council Members expressed the following:

~The Town does not have the money to competitively attract outside business.
~Questioned how much a company would save by fast tracking.
~Schools were the main attraction to an area.
~Questioned how other municipalities handled sustainability and job creation.
  *Ms. Jacobs answered that only a few municipalities have actual policies.
~The Town should pursue LEED and fast tracking. 
~Schools were beyond the Town’s control as were the types of businesses that come in to
  the Town.
~Questioned the viability of this plan.
~More data was needed.
~Impact fees would drive away builders and businesses.
~Impact fees must have a benefit to community and should aid infrastructure and be
~Businesses should make a commitment to the arts.
~LEED was cost prohibitive.
~Residences should be incorporated toward sustainability and move to solar energy.

Mayor Loomis directed Staff to continue to investigate incentives to encourage economic sustainabilitiy in the Town. He noted that:
~Discussion regarding LEED certification for the Town needed to begin.
~LEED should be reviewed independently from an Economic Development stimulus.
~More discussion of Economic Development incentives was needed.
~More definition of fast tracking and direction for incentives were needed. 
~He preferred in-kind options to rebates of tax dollars.
~This topic should be brought to Council in a couple of months.


MOTION: A motion was made by Council Member Carter and seconded by Vice Mayor Kunisch to adjourn at 7:10 p.m.

MOTION carried, 6-0.