Mesa Voters Approve Gaylord Deal at Mesa Proving Grounds by Wide Margin

Mesa voters Tuesday overwhelmingly approved tax incentives for two large resorts and a conference center near Phoenix-Mesa Gateway Airport.
The vote gives a green light to plans by Gaylord Entertainment Co. of Nashville to build an upscale hotel of at least 1,200 rooms attached to a convention center with 225,000 square feet or more.
Another large resort is to be built just south of the Gaylord, along with a championship 18-hole golf course and other amenities.
The project’s master developer, DMB Associates of Scottsdale, sees this as just the first step in developing its 5-square-mile tract on land where General Motors Corp. has tested vehicles since the early 1950s. DMB bought the land in 2006 and leases it to GM, pending the automaker’s move to Yuma later this year.
DMB has developed detailed plans for the project, which it calls Mesa Proving Grounds. Over time, DMB wants to create what some planners call an “aerotropolis” – a mixed-use city center that both feeds and benefits from a nearby airport.
DMB began foreshadowing its plans for a large resort nearly two years ago. Grady Gammage Jr., a leading Valley land-use expert who has worked closely with DMB, told a Mesa audience in August 2007 that the Gateway region had vast economic potential.
And, he said, a signature resort would be the best way to begin tapping that potential. Such a project, he said, “would put a marker out on this property as a significant destination.”
By then, Gaylord and DMB already were talking building one of the Nashville company’s massive resort-convention center complexes in Mesa.
Gaylord operates four such facilities. The newest, less than a year old, is in the Washington, D.C., area.
The company had contacted Mesa City Manager Chris Brady in early 2006, looking for help finding a site in Arizona. After DMB bought the GM property, Brady put it in touch with Gaylord.
Their marriage was announced last Sept. 3 in a gala rollout at the Mesa Arts Center. “This is where dreams intersect with reality,” Mesa Mayor Scott Smith said then.
But despite the promise of an estimated $1 billion in private investment, the companies and Mesa said tax incentives were needed to make the project viable.
The election was triggered by Mesa’s offer of bed-tax rebates to the resorts. Over 30 years, they will retain up to $51 million in bed taxes that otherwise would go to the Mesa Convention and Visitors Bureau.
That bureau uses taxes from Mesa hotels and motels to promote tourism. Under the development agreement with Mesa, the resorts must use the rebated bed-tax money for the same purpose. The advantage to them is that the rebates will infuse millions of dollars into their marketing budgets.
Mesa also will use a provision in state law allowing it to buy the resorts and convention center for $5,000 apiece and lease them back to Gaylord and the other resort operator, which has yet to be named.
That will trigger what’s called a government property lease excise tax, which will save the resorts millions in property taxes over time while still requiring them to pay millions to various governments. Gilbert Public Schools, which encompasses the DMB property, would get most of that money.

Jill Hegardt

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