Citizen Staff Writer
CARLI BROSSEAU
brosseau@tucsoncitizen.com
Raytheon Missile Systems and an expanded, remodeled Costco may soon be adding tax money to Tucson city coffers, a projected $30 million in the red for the fiscal year starting July 1.
Public hearings on the annexations are scheduled before the City Council over the next month, with the Costco deal to be discussed March 10 and Raytheon slated for March 24.
The annexations – and perhaps others not yet disclosed – are expected to bring in about $1 million to the city’s general fund, which pays for services such as police and parks and relies heavily on sales tax receipts.
The Raytheon deal would bring in more than $1 million through a use tax levied on equipment purchases, with the amount over $1 million slated to pay for “improvements” for the defense contractor, city officials said. They would not release further financial details because the terms are under negotiation.
The deal has been in the works for more than a decade. Tucson paid Raytheon, formerly Hughes Missile Systems, $1.5 million a year from 1995 to 1999 in exchange for the company not opposing the eventual annexation.
The payments were outlined in a 1995 predevelopment agreement that is being amended. In the original contract, the city’s payments were described as compensation for Hughes creating close to 5,000 jobs and more than $165 million in annual wages.
Raytheon is a $5 billion company and Tucson’s top employer, with more than 11,000 employees.
In a statement, Raytheon spokesman John Farlow said the company is negotiating about emergency services, traffic control and “other benefits for the safety of our employees, protection of jobs and ability to operate in a manner that continues to have a positive impact on our community.” He said Raytheon would “honor the agreement and the City’s timeline for annexation.”
If officials can get the signatures of Raytheon officials and other businesses within the proposed annexation district and the City Council gives the OK, the swath of land from Valencia Road to Hughes Access Road between Old Nogales Highway and Alvernon Way would be within the city by July 2.
City Councilman Rodney Glassman said the deal would “set the tone” for business retention and attraction to Tucson and position the city for future residential and commercial annexation.
The Costco deal, if completed, would bring an expanded parking lot for the store, 3901 W. Costco Drive, into city limits, along with $1,000 a year in property taxes and sales tax revenues resulting from a bigger store, annexation negotiator Byron Howard said.