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Empire Machinery wants to be annexed into Mesa in return for a tax incentive for a portion of the sales tax that they would generate. It is reported that the move would bring about $1 million to the city's revenue (I am guessing annually).
Right now, Mesa gets nothing from the equipment that is sold at Empire, because they are an unannexed county island. You can see the little white box in the lower left hand part of District 4. So, the question here is: is it better to get part of something or all of nothing?
What they want is a tax break when their sales reach over a certain amount. In this case, when their sales get over $75 million. Also, as part of their agreement, they would also sink $25 million into exanding their headquarters.
Its nice that they put out an offer like this instead of just forcing a deal on the city and threatening to leave if they don't go through with it. While its an equipment company versus a car dealership, the principles are basically the same. Bringing consistent sales tax generators into the community is good for building long term revenue.
It looks like a pretty good deal since Mesa hasn't been getting any piece of the sales taxes for 30 years as it is.
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As you can see, the comments have gone on for a few pages. Is it an incentive? Technically. Is it different than Riverview? Absolutely. This is an established company with a proven record who have also given millions over the past 30 years to charity and other city causes.
One thing that is lost in the article and what many commenters fail to understand is that in addition to paying sales taxes, they will also be subject to property taxes if and when a primary or secondary property tax ever passes.
Doing the math for the new bond proposal, a $2.5M building will pay about $850 a year. With this tax credit, they will spend $25M just in expansion!!
This is a no-brainer for both parties and it's great that it's getting done!
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