The Glendale City Council closed out 2024 much as the entire year went with one more controversial topic discussed in an afternoon workshop then voted on that night.
And for one last time, the agenda item passed with a 5-2 vote.
On Dec. 10, Mayor Jerry Weiers and council members Leandro Baldenegro, Joyce Clark, Ian Hugh and Ray Malnar approved a parking garage space use agreement with the VAI Resort to essentially buy 800 spaces on the ground floor of the resort’s garage for just under $17.88 million total.
“I just want to acknowledge on behalf of economic development that we have explored this opportunity thoroughly and we believe that the opportunity relative to our economic strategy for growth in the sports and entertainment district, is satisfied by this opportunity,” Economic Development Director Jessi Pederson said during the voting meeting.
Councilmembers Lauren Tolmachoff and Bart Turner voted against the proposal because of the cost to taxpayers without certainty of monetary benefits, and because of the timing of the workshop presentation and vote.
During the workshop, Tolmachoff asked Pederson how city staff quantifies the value of the parking spaces. Pederson said city-managed parking floor could better attract Class A office space to the 11.5 unimproved acres of city-owned land next to the VAI garage.
As far as a tangible dollar figure, Pederson said at this point it is premature to answer.
“We don’t have a single agreement in place to even generate a single dollar of revenue off these 800 parking spaces. VAI’s got over 3,000 parking places to park people in,” Tolmachoff said. “We’re taking the risk that somebody, some time is going to need to acquire these parking places from us to use them. I believe that’s a risk.”
Turner said the proposal seemed wrong to him in, “so many different ways.” He pointed out that a couple months ago, Glendale had the conversation of doing a public/private partnership with VAI and building a garage together, then investing in the land together.
This also was Clark’s and Hugh’s last vote as council members.
“The city has no pressing need for these parking spaces. We don’t know anybody that has a pressing need. I’m betting that there’s a better than 50/50 chance that there won’t be a pressing need,” Turner said. “It’s not right for us to take $17.5 million out of the budget on our way out the door and stick it to the incoming council members to balance budgets in the future.”
Tolmachoff and Turner said the short timetable for discussing and voting on this big-money item appears to go beyond the near-certainty of a approval vote.
To them, it appears to be a gift to VAI.
“There is no path to solvency in this proposal. We’re just leasing parking spaces we have no use for. And, honestly I thing it is a way to move money out of they taxpayer’s pocket and into a developer’s pocket,” Turner said. “I think this is risky and unfair to our taxpayers. I think it’s highly speculative.”
Worker Power, a 501(c)(4) social welfare organization that led efforts on the unsuccessful Proposition 499, also honed in on the gift narrative.
In November 2023, two taxpayers, supported by Worker Power, filed a lawsuit against the city of Glendale claiming its proposed tax benefits for VAI Resort violated the Arizona Constitution’s gift clause.
“If trying to grasp everything that is transpiring between the city of Glendale and VAI Resort feels like whiplash, you’re not alone,” stated Brendan Walsh, commenting on the latest developments in Glendale in a press release Dec. 10. “It seems that the wise decision would have been for the city of Glendale to negotiate the terms of the sale of land for a parking lot, including spaces designated for city-use, at the time of the original purchase agreement.”
Glendale purchased about 19.7 acres on the southwest corner of Cardinals Way and 91st Avenue. In July, VAI Resorts purchased 8.25 acres from the city to construct a private parking garage with 4,250 spaces. The garage is under construction.
Purchasing these spaces will provide options to the city to make available additional parking to assist in the successful bidding for mega events, Pederson said.
On the ground floor, 600 spaces would be available to the city at all times and 200 uses available for city from 6 a.m. to 6 p.m.
“The opportunity to be able to secure these spaces in this area for less than $1.36 per day, per space is a significant opportunity for the growth that is taking place in that area,” Pederson said.
Tolmachoff questioned if it was feasible it would increase the value of that land by $1.56 million per acre - or $35 per square foot. Glendale is selling the parcel at $21 per square foot.
“Do you think there is any scenario where this adds $36 a square foot of value to the remaining parcel?” Tolmachoff asked.
Tolmachoff said she can’t think of any parcel in the West Valley that would sell at $57 per square foot.
The initial agreement is for 25 years for a user fee of $14.88 million. Glendale then has the option to pick one or two renewal terms, both priced at $1.5 million.
“I think it’s difficult to say did it add inherent value to the land itself without understanding the revenue implications to the city long term over the 45-year period by having development that pays different types of fees and taxes back to the city. As we go to sell that land, we’d be looking for opportunities for things that drive the revenue,” City Manager Kevin Phelps said.
Technically, City Attorney Michael Bailey said, the city does not have the right to lease these spots but can assign them.
Turner said this $17.5 million is not going to make or break the resort, which has more than a billion dollars invested already. He also commented on the irony Glendale did not have the money to rebuild Velma Teague Library for a little more than $17 million but had this money for a speculative project.
He said he thinks The Goldwater Institute will and should look into it.
Malnar disagreed with Turner.
“I see this as part of a larger process, a larger deal,” Malnar said. “That’s really what I’m most concerned about, is getting it online and creating revenue.”
Joyce Clark said this is an investment over 45 years. Westgate's owner is consuming buildings and parking spaces in the area. Parking will come at more of a premium.
“I don’t think it’s a risk. I think the risk is in not having those parking spaces for VAI of for the city to use,” Clark said.
She also presented the agreement as a gradual expenditure of $17.8 million over the course of 45 years.
However, as Tolmachoff pointed out and Bailey confirmed, the initial $14.875 million payment by the city to VAI is due upon certificate of occupancy, which is projected to be in September 2025.
Richard Smith Senior News Editor | Glendale & West Valley Preps
Richard Smith has been with Independent Newsmedia since 2016, and worked at a Sun City-based news outfit covering the Northwest Valley for 22 consecutive years.
An NAU alum and lifelong Arizona resident, Richard began as a copy editor and page designer at Surprise Today and the Daily News-Sun, then rekindled his love of sports writing by taking the reins on West Valley Preps in 2008.
For most of the mid-2010s he was the Surprise editor and West Valley Preps reporter. Now he’s the West Valley Preps Editor and Surprise Associate Editor.
As COVID restrictions slowly lift, Richard is cautiously optimistic he will visit book stores, football fields and gyms again this fall.
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