Marana’s planned $84 million downtown project may be up for a referendum vote.

An activist group out of Phoenix, Workers Power, is asking Marana residents to sign a petition to get both the Beale Infrastructure data center and the downtown project on next August’s ballot. 

Town manager Terry Rozema said town leaders expected to see the data center on a referendum and that’s fine with them. It’s part of the process, it’s “A-OK” with him.

The difficulty comes with the downtown project. He said members of the group are giving out what amounts to false information.

“It’s not the fact that they’re going out and getting signatures,” he said. “It’s that somebody is paying big money to bring a bunch of people down here and the biggest issue I have with this is they’re conveying very bad information to people when they’re asking them to sign the petition.”

The group needs about 1,500 signatures to get it placed on the ballot.

While it’s true the project will cost $84 million, it is not true that those funds are coming out of taxpayers’ pockets directly into the contractor’s pockets, which is what Rozema said residents are being told.

“Their narrative is that the town is giving $84 million in resident tax dollars to build a hotel in our downtown and that is not what’s happening at all,” he said.

Here’s what’s actually happening, Rozema said.

“The reality is we have this 20-acre parcel of land across from the town hall that’s vacant,” he said. “The town bought it years ago and the vision has always been that we would create this really neat, walkable downtown.”

Here’s how Rozema said the downtown would come about.

“Municipalities don’t operate restaurants and spas and hotels and things like that, so we partnered with a developer,” he said. “We put together an agreement. We went back and forth for the better part of a year developing this thing so that the town ends up on top in the end. … (Marana) is coming out miles ahead on this thing.”

According to Rozema the Workers Power is calling that $84 million incentives for the builder. It is not. It’s a reimbursement to the developer, Marana Urban LLC.

“(Marana Urban) is going to build all the buildings and then we’re going to pay them back for building all the buildings which are going to be ours,” he said. “All of the buildings downtown will belong to the town of Marana.”

Paying the Marana Urban back is not an incentive, Rozema added. This is a common way for municipalities to develop public spaces such as a downtown or a mall. The outlet mall is one example of this way of doing business.

“(The contractor) built all of the infrastructure there and we’ll be paying them back for that infrastructure for a long time through sales tax,” Rozema said. “A portion of the sales tax generated by the mall goes to pay the mall people back for the infrastructure they put in.”

This is how the town of Marana plans to pay for the proposed downtown area. For each dollar spent on tax 

“It’s not tax dollars that the town was given previously that we’re giving to the developer, it’s tax dollars that are coming out of the development itself,” Rozema said. “As it’s developed and as it generates revenue we’re using a portion of that sales tax, I think it’s 45%, to give back to them and 75% of the construction sales tax. All the materials and stuff that they buy, there’s tax on that obviously and we get a portion of that tax.”

There’s more. The town will pay 75% of that tax back to Marana Urban. However, when it’s all done the buildings will belong to the Marana. 

In addition, Marana Urban will pay to lease the downtown land from Marana at 26 cents per square foot. Then, after eight years the town will begin to profit share with Marana Urban. That is 3% of their gross receipts. 

“Then, once the cost of the buildings up to $84 million is paid, then we get 100% of the sales tax,” Rozema said.

A third-party economic development expert, Elliott D. Pollack and Company, did an analysis and it showed that after the $85 million is taken out, the town will be left with $160 million.

Rozema said he expects the project to be paid off in decades but cannot say closer than that since it is to be paid in sales tax and nothing has yet been built.