TOWN COU NCIL WOR KSH OP FEBR UA

TOWN COU NCIL WOR KSH OP FEBR UA RY 28, 2017

Town Facts • • Incorporated 1984 8. 5 sq. miles Current • 3, 600 pop. • 2, 700 Dwelling Units Buildout • 6, 000 pop. • 4, 400 DU’s Approx. 70% buildout 98% of landmass (5, 440 acres) zoned residential, 2% commercial 80 acre mixed use Town Center 2

Purpose of Town Government § Provide a “Basket of Services” to enhance the quality of life for our residents § Secure the funding necessary to enable the Town to deliver the “Basket of Services” § Funding sources: - Sales Taxes • Provide the environment and situation enabling business to prosper thus generating Sales Tax - State Shared Revenues 3

ipal c i n Mu Tax s Sale Town Property Tax Sta t Rev e Shar enu ed es Town of Carefree Financials Town Services $5. 8 million 4

Financial Overview $ Millions 5

Current Financial Model Risks § Community is more reliant on volatile revenue stream in sales tax § Current financial model works well during periods of growth § Anticipate reduced State Shared Revenues in the future § Construction sales tax Benefits § Town property owners enjoy relatively low property tax § Pay typically $2 k to $3 k less than many nearby communities § Full fire coverage 6

Financial Stability Strategy Goal § Add additional $2. 5 - $3 million/year to operation revenues, or reduce operating costs, to offset future revenue requirements l icipa n u M x s Ta e l a S § Deliver the "Basket of Services" that residents desire § Stimulate a vital environment within the Town, preventing it from "dying" § Fund town services without a property tax, or delay it Sta te Rev Shared enu es Guiding Principles Town Property Tax Town Services $5. 8 million 7

Primary Long Range Financial (Strategic) Plan Options § Do Nothing Different § Minimize Expenses § Build Sales Tax Revenue § Minimize Expenses and Build Sales Tax Revenue § Property Tax Note: We don't believe that we can cut expenses sufficiently to reach our goal. 8

Minimize Expenses and Build Sales Tax Revenue Strategy How do we get there? § Target/strengthen sales tax generators § Identify and use catalysts to encourage private investments and growth which contributes to the tax base § Further define and emphasize our brand to cultivate and align tax generators with identity

The Target Trade Area “the wealth box” § DC Ranch/Grayhawk (85255), Troon North/Desert Mtn. (85262), Whisper Rock/Boulders (85266), Cave Creek (85331) & Carefree (85377) § Approx. 82 K population § Approx. 24 K households § Average household Income $151 K § 56% college degree In comparison § Arcadia/Biltmore/PV area § Approx. 60 K population § Approx. 28 K households § Average Household Income $134 K § 54% college degree Note: State land development in Scottsdale over next 15 -20 years

Financial Stability Strategy Strengthen Existing Tax Generators § § Basha’s remodeling Carefree Resort rebranding/repositioning Café Bink new ownership and menu Spanish Village- New Ownership Target New Tax Generators: • • PV model (Resorts can generate $500 M to over $1 MM in revenue/year) – high end resorts adding value to primarily residential community Restaurants ($30 K per $1 million in business) – over $60 million leakage in trade area, seek chef driven restaurants concepts/brands with the “wow” factor = unique ambience, impeccable service and quality food translates to a broader appeal to market area Creating Municipal Revenue without assessed property tax = A critical mass of viable tax generating businesses

Refocus and Rebrand Economic Development § Diversify productive sales tax producers - Town Center - Undeveloped properties located at heavily traveled intersections and roadways Note: Buffer surrounding homes may require Town to reassess zoning, fill appropriate commercial needs as well as generate sales tax revenue Town Events and Marketing § Unique events which appeal to target audience, relevancy in market place § Broader timelines/footprint with diverse activities = greater appeal

Financial Stability Strategy What are Other Municipalities Doing to Move Forward? • • • Litchfield Park Purchased 30 acres and rezoned land to create a town center. Surprise Purchased acreage and rezoned land to create civic center, sporting facilities and supporting commercial uses. Peoria Funded a façade replacement program for large shopping centers and invested $80 million to improve landscape, signage and parking. Gilbert Purchased land in their downtown, built buildings & leased space to businesses /restaurants and built parking structures to support development activities in their downtown – Heritage Square. Phoenix Leases city own commercial properties and credits tenant improvements against long term leases.

Land Use Opportunities* *Four additional areas comprise approx. 97 acres, 2% of the total Carefree landmass of 5, 440 acres

Restaurant Industry § Over $60 million leakage in wealth box § People eat out in the wealth box an average of 3 to 4 times a week § Restaurants are the new anchors to shopping centers/retail experience § Town has existing infrastructure in place and suitable locations to support numerous well branded, chef driven restaurant concepts

Resort Hotel Industry § Many identify Carefree as a resort community, however, there is only one identifiable conference center/resort § Work with property owners of selected properties to make their property special planning areas § Spectacular views of land forms and mountain-desert vistas § Competitive edge - Immediate access to open space preserves and lakes § Paradise Valley model – world class resorts part of fabric of high quality residential community § Sustainable wellness – mind, body and soul emersion programs – a “Carefree” lifestyle

Domino Effect Restaurants § Get one well branded restaurant and others will follow. § Target Town Hall administrative office site/building as it is a highly visible location between the Sundial and Cave Creek Road. § Focus on Spanish Village and adjacent vacant land to bookend gateway on CCR– both targets are visible from street and will assist in driving traffic into the Town Center. § Create highly visible anchor along Easy Street to increase foot traffic.

Summary § Enhance Quality of Life § Diversify § Geography § Hotels and Restaurants § Refresh Brand