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Mesa OKs Rezone, Incentives for Planned Auto Mall

Credit: City of Mesa

By Josh Martinez for Independent Newsmedia 

The Mesa City Council hosted a public hearing before unanimously approving a series of resolutions and ordinances that will make way for the mixed-use development called Destination at Gateway in the city’s southeast corner. 

The 89-acre site sits near the intersection of Signal Butte and Williams Field roads. 

As part of the approval, a minor General Plan amendment will allow for a character type change from neighborhoods to mixed-use development for the site. Council also approved a rezoning of the site from residential to general commercial. 

As for the development agreement, the city and developer Signal Butte 24 agreed to stipulations in land use restrictions, public improvements and economic incentives. As part of the agreement, the city would provide a sales tax reimbursement, capped at $6M, for public improvements the developer will construct and dedicate to the city. 

Per state statute, Mesa used Applied Economics to ensure the agreement and its proposed tax incentive raises more revenues than the amount of the incentive within the duration of the agreement and if the development wouldn’t have occurred in the same time, place or manner without the incentives. The firm determined both were true. 

The City Council was willing to move forward with this plan because of the high revenue auto malls generate. City Manager Chris Brady pointed to auto malls as some of the highest generators of sales tax revenue, making it important for the city to bring in another one. 

Brady pointed to challenges still ahead as much of the land is vacant and the streets need numerous improvements. State Route 24 will extend to Ironwood Road and will skirt the southern edge of the property but construction hasn’t begun yet. 

He said while the city will have to reimburse the developer up to $6M to conduct public improvements to the area, Mesa will receive significantly more back. 

Up-and-coming Economic Hub 

The rezoned 89 acres was part of the Destination at Gateway planned area development, which encompasses 251 acres with a variety of residential and limited commercial land uses allowed on the property. The rezoning removes the subject site from the PAD and gave it a general commercial zoning with a PAD overlay. 

The 89-acre site might also include some residence as a secondary buffer use, City Planner Veronica Gonzalez said during the June 25th meeting. 

The entirety of the planned area development will sit along the future State Route 24 extension, which will feature two lanes in each direction with a graded median separating them. The road will extend from its current terminus of Ellsworth Road on to Ironwood Drive with at-grade intersections at Williams Field Road; Signal Butte Road; Meridian Road; and Ironwood Drive. 

There area is in need of significant public improvement such as pavement, curbs, gutter, sidewalks, storm drain, streetlights, traffic signals, a 15-inch sewer line and a 24-inch water line. The city estimates those costs to reach about $7.6M. 

The development agreement stipulates the developer will have the first new auto dealership open by the end of 2026. The developer will also take care of the design and construction of the south side of Williams Field Road. west half of 110th Street and an internal auto mall street. 

The developer will also be responsible for a portion of Signal Butte Road not constructed as part of a city project. This would include pavement for outside lanes; curb and gutter; sidewalks; streetlights; 12-inch water line; and storm drain. 

In return, the city will design and construct Signal Butte Road from Williams Field Road to SR24 by the end of 2022 not including the portion the developer will handle. 

Read more at Independent Newsmedia. 

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