Annexation - positive economic effects on Wickenburg

By Art Pulis, Sun Business Advocate

Some retail businesses that would be collecting town sales taxes if annexed

Two unrelated, simultaneous events are now occurring that will shape the Wickenburg community in the coming 10 years, and decisions made today will determine the town’s position with those changes. Those events are the development of Wickenburg Ranch on the north and the encroachment and development from the City of Surprise toward the south.

Through its present annexation plans, Wickenburg is strategically moving to deal with those events.

Understanding the importance of annexation is to properly understand how municipal government is funded. While a town receives a small amount from real estate taxes, by far the largest single source of general fund budget money comes from the town’s collection of sales taxes. These taxes are collected on retail sales, construction contracts, new home sales, and a variety of other business services. That is the reason cities like Avondale and Peoria have made great efforts to lure shopping centers and auto dealerships to within their boarders.

As most people know the City of Surprise is annexing land and has detailed development plans for thousands of homes and commercial centers coming up Grand Avenue (Highway 60) toward Wickenburg. In all likelihood there will be major commercial development at the corner of Rt. 74 and Grand Avenue. It is a key spot for a shopping center. Billions of dollars of retail business will happen in that area, and the resulting sales tax will go either to Surprise or Wickenburg.

Presently there are approximately 35 businesses between the present town limits and Morristown, and clearly this corridor will continue to develop commercially. Some municipality will collect that sales tax, which today amounts to between $100,000 and $300,000 annually.

In the other direction is the development of Wickenburg Ranch. Planned for approximately 2300 homes, a resort, equestrian center, and golf course, the completed project will be a major generator of sales tax revenue for some town or county. Looking at the value of the construction alone the number could easily approach $1 billion, which would translate to over $11 million of sales tax revenue on the homes. Adding the building permit and impact fees of close to $11,000 per home presently charged by Wickenburg, times the 2300 homes equates to an additional $25 million that could come to Wickenburg if the project were part of the town.

For Wickenburg to include Wickenburg Ranch and the junction of highways 60 and 74 into town, it must annex land in between. Presently there are two annexation projects underway moving in those directions. The northern 89/93 annexation out toward Wickenburg ranch has been started, the map is drawn, and the planning department is awaiting information from the state and county.

The annexation down the highway corridor toward Phoenix is further along with a public hearing scheduled for a special Town Council meeting at 1 p.m. on Wednesday, Oct. 10. Following the public hearing will come the period when land owners will have the opportunity to vote in favor or against the annexation. To succeed the town needs more than 50 percent of the number of land owners owning 50 percent of the assessed land value to be in favor. Town Planner Miles Johnson hopes to have both annexations complete by mid 2008.

Wickenburg Town Manager Gary Edwards explained that annexation is important not only for revenue but also to protect the culture of the town, its water supply, and its future.

“We need to protect the western heritage of Wickenburg, and the best way to do that is to control our destiny,” said Edwards. “If Buckeye and Surprise come right up to our present town limits, they will control. I believe we can do a better job of planning our own future.”

Edwards also pointed out that the town will need future revenue from projects like Wickenburg Ranch because those residents will impact town services. Unlike many other towns, Wickenburg seldom if ever excludes non-town residents from such things as sports leagues, parks, tennis courts, the community center, library, and other facilities. As the population around town increases it places increased burden on those services.

Presently there is a total of four annexations in the planning stage, two of them initiated by residents. These residents, and many others, feel that coming into the town limits has advantages that far outweigh the small increase in real estate taxes. Builders who have obtained permits from Wickenburg and also from Maricopa County all attest to the comparative ease in dealing with the town. Businesses and residents in the county who have had to summon county police protection will attest to preferring the faster response coming from Wickenburg.

Not everyone wants to be annexed into Wickenburg. Some don’t want another layer of government in their lives and others would rather not pay any increased taxes. Others recognize that they live here because of the benefits of the town and consider themselves to already be a part of Wickenburg. Consequently they welcome the increased services, are unselfishly willing to pay any increased taxes, and look forward to having the total community of Wickenburg benefit.

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