By Wayne Schutsky for Scottsdale Progress
Scottsdale has reached a preliminary agreement with Axon to reimburse the body camera manufacturer over $9M in infrastructure costs and other expenses connected to the planned expansion of its headquarters in Scottsdale.
The deal will go before City Council and is likely to face the same pushback from critics who opposed a similar deal with Nationwide in 2018.
Axon, formerly known as Taser International, was founded in Scottsdale in 1993 and has its eyes on a 74-acre parcel of Arizona state trust land near Loop 101 and Hayden Road to expand its nearby headquarters.
The land, which will go to auction in September, is one of several parcels of state trust land located in an area known as Crossroads East.
The deal going before Council depends on Axon successfully purchasing the 74-acre parcel southeast of the Nationwide site.
Under the proposal, Axon would be eligible for up to $9.4M in reimbursements if it completes infrastructure improvements and hits certain construction and payroll benchmarks.
The company is eligible for up to $7.2M in reimbursements for costs associated with the widening of Mayo Boulevard and Hayden Road – which could also include associated infrastructure work like sidewalks, landscaping, sewer, wastewater and water improvements, according to a draft of the agreement.
The company is required to submit plans for proposed improvements for city review before starting construction.
The company is also eligible for an additional $2.2M reimbursement for a payment it must make to the city if it successfully purchases the trust land.
The Arizona Land Department requires any successful bidder on the land to pay the city $2.2M within 30 days of the auction as payment to recoup city costs for existing infrastructure in the area.
So, the city would essentially give back its own $2.2M infrastructure reimbursement.
In order to receive its full reimbursement, Axon must build at least 250KSF of commercial or manufacturing space and have a payroll of $130M over any continuous 12-month period within five years of the state land auction.
If Axon does not meet those benchmarks, it would still be eligible to receive up to 50 percent of the infrastructure reimbursement, or about $3.6M.
The deal also includes a caveat requiring Axon to reserve 4.5-6 acres for the city to build a fire station, water pump and potential future command center.
Under the deal, the city will pay Axon for land using the same per-acre price the company pays the state for the larger parcel.
The city anticipates the plot will cost it about $2.6M, according to a council report.
Proponents of the deal said it is a win for the city because it will keep a major employer from relocating elsewhere and actually bring more jobs to Scottsdale.
According to details included in a council report, Axon currently has 850 employees in Scottsdale and plans to add 650 more jobs over the next five years.
Rob Millar, Scottsdale’s economic development director, said that while the site is prime property, it will take significant investment to develop it, due in part to acquisition costs.
Bidding for the property will start at $31.7M, according to the State Land Department.
The proposal has already drawn some criticism from locals who have long opposed these types of transactions between the city and private businesses in the past.
The deal is similar, though smaller in scope, to a reimbursement package the city gave Nationwide when it announced plans to develop the neighboring Cavasson development.
That deal, which will pay Nationwide up to $21.9M over 20 years, received significant criticism from residents.
Read more at Scottsdale Progress.