The Board of Supervisors on Tuesday unanimously approved a business incentive plan designed to entice a national retailer to build a regional distribution center in Tucson.
The plan gives HomeGoods, a division of Massachusetts-based TJM Companies, a property tax break on an undeveloped 100-acre south-side site, where the company has indicated it could build a West Coast distribution center that would initially employ 400 people .
The Tucson City Council will consider a companion tax incentive proposal next month.
Sunnyside Unified School District, the other major taxing jurisdiction for the area, is not being asked to approve a tax write-off. It would instead enjoy a windfall as its tax receipts from the property would grow as a result of the development.
Pima County Administrator Chuck Huckelberry said the company intends to invest as much as $79 million in constructing and outfitting the proposed distribution center, near Tucson International Airport at 3649 E. Corona Road.
βFrankly, we could use this shot in the arm at this time,β said Tucson Regional Economic Opportunities (TREO) CEO Joe Snell.
Snell said TREO, the county and other regional governments have been negotiating with the company for nearly a year.
The group estimates the total economic impact of the proposed 800,000-square-foot facility would stand at nearly $900 million.
As commercial property, the site would normally pay taxes based on 19 percent of its full cash value. The board approved dropping that to 5 percent for 15 years.
Even with the reduction, the county and city would take in significantly more in taxes than they now receive based on the added value of the new development.
The most recent property tax bill for the parcels making up the site was $36,614 in county property taxes and $8,215 in city taxes. Once developed, the parcels would generate an estimated $207,709 in county and $55,034 in city property taxes annually.
After the 15-year abatement, the properties would create $513,331 in county and $136,012 in city property taxes, at current tax rates.
Huckleberry said school district property taxes would remain at current levels. Those include property taxes for Sunnyside Unified School District, Pima Community College and the Joint Technical Education District.
HomeGoods plans to hire more than 400 people initially and expand to nearly 900 in 15 years.
Part of the agreement requires the company pay an average hourly wage of $11.80 that would increase incrementally, reaching $13 per hour by the 15th year.
The company also must agree to pay for employee health and dental insurance and provide a 401(k) plan.
The City Council plans to discuss its incentive offering on Feb. 18. City incentives could include up to 100 percent credit on city construction sales taxes.
