Oro Valley is on the move—southbound, to be specific, into an area rich with sales taxes.
The clock started last week on a year-long effort by the town to annex 107 acres on its southern border which encompass the northwest corner of the intersection of Ina and Oracle roads.
The area includes mostly commercial properties lining the west side of Oracle between Ina and Suffolk Drive—including an office building that houses the Greater Oro Valley Chamber of Commerce—and extends west to Paseo del Norte and takes in Tohono Chul Park.
Town officials have until next April to collect signatures from more than 50 percent of the 22 landowners in the area, as well as signatures from landowners whose properties make up more than half of the area's assessed value. It would be the first land added to Oro Valley since 2005.
The decision to pursue annexation came from a 2011 Town Council retreat, said Mayor Satish Hiremath, who noted that the town's larger-scale annexation efforts of late have gone nowhere.
He said the town has been in on-and-off talks to annex the Westward Look Resort, near Ina and First Avenue, but that constant ownership changes have slowed that process. And roadblocks from the Arizona State Land Department have stalled Oro Valley's effort to take in 14 square miles of undeveloped land north of town known as Arroyo Grande.
"That's why this grew legs so quick," Hiremath said. "This was council-driven."
But landowners within the proposed inclusion area are wondering: Why them? Their conclusion: The city wants the revenue the businesses would generate thanks to the town's 2 percent sales tax.
"The reality is that most annexations which affect commercial properties are sales-tax-revenue-driven," said Bruce Romano, a real estate agent who is asset manager for the Two Oracle Place office complex. "You can't get that from the homeowner side (of an annexation). This is definitely a revenue generator."
Romano said annexation by Oro Valley would mean a tenant such as Platinum Fitness, which occupies about half of the 50,000-square-foot complex, would have to pay more for various permits associated with upgrades that the gym's owner wants to make.
"They're constantly trying to upgrade, to revamp," Romano said. "All of a sudden, they decide to take out a swimming pool and put in something else. That means plans, permits. Then you have the difficulty of getting (things) approved, the time to get things approved, and the cost of any change—in exchange for nothing back. I think that's the perception of the commercial properties."
Joe Nehls, who manages the One Oracle Plaza building just south of Romano's complex, said his tenants, including a bank, a jeweler, a dentist and a hair salon, are all "vehemently opposed" to the annexation.
"The town of Oro Valley wants more taxes," Nehls said. "There's no rhyme nor reason how they chose the land. It doesn't make any sense. The most important issue is: We (would be) paying 2 percent on items sold for what? They couldn't say what we'd get back in return."
Hiremath claims the town would come out "a little bit better than break-even" in terms of revenue generated compared to expenses associated with the new territory. As for benefits for property owners, the mayor cited "the No. 1 public-safety division in the state of Arizona" and efforts by the town to market local businesses online.
"Any business gets promoted on our website," he said. "They're going to see far greater rewards (by) coming into the town than staying out."
Hiremath said the addition of Tohono Chul Park would give Oro Valley both an arts-and-culture component and a tourist attraction, two things the town is lacking.
"It will be a win-win situation if Tohono Chul decides to be part of Oro Valley," Hiremath said.
A representative of the park said via email that Tohono Chul is "maintaining a neutral position" on the annexation while it evaluates the impact that being part of Oro Valley would have on the park.
If Oro Valley is successful in annexing the northwest corner of Ina and Oracle, it would give the town a shot at annexing more lucrative properties, such as Casas Adobes Plaza on the southwest corner of the intersection. State law requires that annexation targets be adjacent to a town's current boundaries. Getting a piece of the Ina-Oracle intersection also could help the town extend east or west—perhaps to eventually take in La Encantada shopping center or Foothills Mall.
Hiremath said no such plans are in the works.
"There is a pretty significant cost associated with any annexation," he said. "We're just kind of biting off what we can chew right now."
