Peoria Council approves tax incentive for The Trailhead

By Philip Haldiman
Mail | X: @PhilipHaldiman

Peoria City Council unanimously approved a retail development tax incentive for the much awaited mixed-use project The Trailhead that the developer says will help complete the project as planned.

“In the absence of additional support the project will not build to at the same pace or at the same scale that we originally projected,” Deputy City Manager Mike Faust said.

Phoenix-based The Pederson Group plans to bring retail, restaurant, multifamily residential, and a religious facility on 40 acres to the northeast corner of 83rd Avenue and Happy Valley Road, touting the project as a full service lifestyle center where people can hang out, shop and eat, with the Sunrise Mountain Preserve as the backdrop.
The project includes at least four “quality restaurants” in a pedestrian friendly environment, as well as a new grocery store, according to the development agreement.

The Trailhead has been in the works for more than seven years, and only a new Safeway has begun to rise above the land.

Founder and Chairman Jim Pederson Pederson has said that those restaurants will not be able to locate in the city without the incentive because of inflation increases and public infrastructure costs have risen from an estimated $3.8 million agreed to in the development agreement to $6.6 million.

This includes many off-site needs such as road widening, a traffic signal and drainage issues that required a costly drainage plan that was approved by the city, Pederson said.

Peoria City Council approved the initial development agreement April 19, 2022. The new amendment that includes the incentive, which is allowed under Arizona’s Revised Statutes, states the city will reimburse up to $2 million or 72 months, whichever comes first.

That will be done by setting aside the eligible sales tax that is generated at the site, which is broken down as follows: 100% of construction sales taxes; 50% of restaurant, bar and retail sales taxes; and 25% of grocery sales taxes, according to the agreement.

“If the property does not generate the full $2 million by month 73, our obligations have been met. So it is a very good way to incentivize and help the developer community, but on the same token mitigates the risk to the city,” Faust said.

He highlighted that Peoria is at the bottom of Valley cities in terms of gross sales at $58,132 per capita, and that residents are leaving the city to spend money in other jurisdictions, diverting revenue away from the city’s coffers.

“Which is ultimately impacting the revenue for the city, which makes it difficult to support the operational standards Peoria seeks,” he said. “A lot of that is driven by an absence of restaurants and retail establishments in the city limits, so if you live up in this area you may know what it’s like to have to drive outside of the city to find a meal with your family or do some additional shopping.”

He added that in April 2022, the city commissioned an economic impact study on The Trailhead project and found it would generate $17 million in tax revenue and 430 jobs over 10 years that will support local growth.

Philip Haldiman can be reached at phaldiman@iniusa.org, or on Twitter @philiphaldiman. We’d like to invite our readers to submit their civil comments, pro or con, on this issue. Email AZOpinions@iniusa.org.

Philip Haldiman
Senior News Editor | Peoria

phaldiman@iniusa.org

Meet Philip
Haldiman is an award-winning journalist who most recently took first place for investigative reporting in 2023 from Arizona Newspapers Association. He joined Independent Newsmedia, Inc., USA, in 2015, covering Sun City West his first year. Since 2016, he has covered the city of Peoria. Prior to coming to INI, he was a reporter with The Arizona Republic for seven years, covering numerous cities throughout the Valley. Before that, he was a freelance writer.

Community: Haldiman spearheads the Peoria Independent Hometown Heroes Awards program, honoring local individuals and businesses that give back to the community. He has hosted local candidate forums over the years and is a member of the Society of Professional Journalists. Haldiman also served as a member of the Journalism Program Community Advisory Board at Glendale Community College. Outside journalism, Haldiman served as a member of the city of Peoria Complete Count Committee for the Census, 2019-2020. Lastly, he has served as a member of his HOA governing board since 2021.

Education: Arizona State University with a BA in Journalism and Mass Communications and a BA in Theater. 

Random Fact: Haldiman is a fourth-generation Arizonan as well as wrote and produced an autobiographical comic book about his time spent in Hollywood and his life as a cult film star.

Hobbies: He enjoys hiking Arizona’s mountainous landscapes and is currently working on a play for the stage.