18 car dealers supply 1/3 of city’s sales tax

By Philip Haldiman

Independent Newsmedia

A one-mile strip of Bell Road will soon be getting some serious Peoria-style branding.

The City Council approved a contract with Valley Rain Construction Corporation in an amount not to exceed $1.8 million to build the Peoria Auto District project, a collection of street improvements and branding in the style of P83 that will  bring attention to the revenue-rich, highly concentrated area of car dealerships.

It will be funded by savings from other city projects.

City Manager Jeff Tyne said the city is very excited about this project.

“This is a major economic corridor, a very high volume traffic area for both visitors and residents alike,” he said. “As a result, we really want to continue our efforts to distinguish ourselves in these strategic parcels.”

The flagship of this project will be two illuminated gateway monuments that will welcome motorists, branding the area as the Peoria Auto District, bookended on Bell Road at Loop 101 and about 92nd Avenue.

The project will also include landscaping within the existing median, palms trees, LED programmable lighting and low water use shrubs.

Development and Engineering Director Adina Lund said with other auto dealerships popping up throughout the Valley being built as uniform planned developments, the Peoria dealers requested continuity and connection after an inquiry from the city.

About 10 of the 18 dealerships on this strip of Bell Road provided input on the project.

Councilwoman Vicki Hunt praised the design of the project.

“It makes sense, if I were the auto dealer, I would want people looking at my cars, not at the beautiful signage. Yet one glance at it tells you where you are,” she said.

Around 40,000 vehicles travel this section of Bell Road daily, but in the short time they speed through, they might not realize that sales from the myriad of auto dealerships they pass amount to 1/3 of Peoria’s retail sales tax revenue.

Deputy Finance and Budget Director Barry Houg said sales taxes on auto sales are certainly an important revenue source for the city.

“In Arizona, cities and towns are reliant on sales tax revenues,” he said. “Sales tax revenues are tied to consumer spending, which ebbs and flows with the economy. When consumers delay purchases of cars, like they did during the recession, it has a detrimental effect on the city’s revenues.

However, he said, while it is true that 1/3 of revenues in the retail category come from auto sales, these revenues actually represent only 19% of Peoria’s total local sales tax revenues.

He added that retail is the city’s largest sales tax category at $47.5 million, but Peoria generates another $42.3 million from other sales tax categories.

Memories still remain of the Great Recession and car dealership after car dealership closing, leaving hollowed-out boxes throughout the Valley. The auto industry has returned to a place of comfort, but Mr. Houg says fiscal policies are in place to protect the city from the effects of economic downturns.

“Specifically, we fully fund our reserve requirements, prepare long-range revenue and expenditure forecasts and balance recurring expenditures with recurring revenues,” he said. “In addition, our economic development efforts are aimed at diversifying the local economy so that we are less reliant on sales taxes from things like auto sales and construction.”

Mayor Cathy Carlat said she respects the economic contribution auto dealers provide to Peoria, and added the effort to brand the Bell Road area is critical for the city.

“These are funds that pay for police and fire and parks and libraries and all the things that all our citizens use. So this is not really just for one group, but the revenue from this does a lot to build our entire city,” she said. “We certainly appreciate this work and our auto dealers.”

Other proposed improvements to the auto district will include extending left turn lanes at Bell Road and 84th Avenue, as well as at Bell Rd and 87th Avenue.

Construction is expected to begin this month and complete in August.

Ms. Lund said two projects in the area will follow — a 30-inch sewer main rehabilitation, as well as a mill and overlay project.

The majority of the work will be done at night, and there will be 24-hour hotline number for residents with questions, she said.

“Within those constraints we will do our best to work together as a team and get the work done. But we would like to do it all in the next fiscal year so they don’t have to see us interrupting traffic for a long time,” she said.

Philip Haldiman can be reached at 623-876-3697 or phaldiman@newszap.com. Follow him on Twitter @philiphaldiman.