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RESOLUTION NO. ____
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MESA,
ARIZONA, MAKING FINDINGS REQUIRED BY A.R.S. § 9-500.11 (VERSION
2) FOR, AND APPROVING AND AUTHORIZING THE CITY MANAGER TO
ENTER INTO, A DEVELOPMENT AGREEMENT, WHICH IS A RETAIL
DEVELOPMENT TAX INCENTIVE AGREEMENT PURSUANT TO A.R.S. §
9-500.11 (VERSION 2), RELATED TO THE DEVELOPMENT KNOWN AS
“CANNON
BEACH
HOTEL,”
GENERALLY
LOCATED
AT
THE
SOUTHEAST CORNER OF POWER ROAD AND WARNER ROAD.
Whereas, Cannon Beach Hotel, LLC (“Developer”) owns an approximately 57,647 square foot
parcel of real property generally located southeast of the southeast corner of Power Road and
Warner Road in Mesa, as legally described in Exhibit A to the Development Agreement (the
“Property”).
Whereas, the Property is a part of the larger project known as “Cannon Beach,” a mixed-use
development on approximately 37.14 acres at the southeast corner of Power Road and Warner
Road consisting of retail, commercial, restaurant, and recreation and entertainment uses, including
unique wellness and recreation facilities such as a white sand beach, surf pool, skate park,
pickleball, and cliff jumping. Cannon Beach is designed to increase the quality of life for residents
of Mesa, bring communities together, and attract visitors from outside Mesa by creating a unique
and upscale destination with high-caliber eateries, shopping, and recreation. The portion of
Cannon Beach on the Property will consist of an upscale hotel with various amenities including a
rooftop deck and event space and a ground level pool, hot tub, and lawn area; a bar and lounge
connected to an outdoor terrace overlooking the surf pool; and an upscale or upscale casual, full-
service restaurant (collectively, the “Project”).
Whereas, the Project will enhance the economic welfare of the inhabitants of Mesa by, among
other things: (i) providing for the construction of extensive public improvements and infrastructure
in and around the Property; (ii) providing for the planned and orderly development of the Property
consistent with and advancing the goals of the City’s adopted general plan; (iii) increasing tax
revenues to the City arising from or relating to the improvements to be constructed on the Property;
(iv) creating a substantial number of new jobs during and after the development of the Project; (v)
increasing the demand for City services during and after the development of the Project; (vi)
advancing the redevelopment goals of the City; and (vii) enhancing quality of life by providing a
high-quality and unique option for accommodation, dining, and recreation.
Whereas, Arizona Revised Statutes (“A.R.S.”) § 9-500.05 authorizes the City to enter into a
development agreement relating to the development of real property in Mesa.
Whereas, the City believes the development of the Project will serve an area need for the type of
destination accommodation, dining, and recreation to be constructed on the Property and will
generate substantial transaction privilege tax and transient lodging tax revenues for the City;
therefore, the City desires to enter into a development agreement to, in part, provide for a retail
sales tax incentive to reimburse Developer for its eligible approved costs related to the construction
of certain public infrastructure for the Project (the “Development Agreement”).
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Whereas, A.R.S. § 9-500.11 (version 2) (“A.R.S. § 9-500.11”) allows a city to appropriate and
spend public monies for and in connection with economic development activities. The
Development Agreement meets the definition of a “retail development tax incentive agreement”
under A.R.S. § 9-500.11(M)(6).
Whereas, if a city desires to enter into a retail development tax incentive agreement, the city is
required, pursuant to A.R.S. § 9-500.11(K), to adopt a notice of intent at least fourteen days before
approving the agreement. The required notice was adopted by the City Council at the City Council
meeting on August 17, 2026, and a copy of such notice is on file with the City Clerk’s Office as
Resolution No. 12564.
Whereas, A.R.S. § 9-500.11(D) and A.R.S. § 9-500.11(E) require the City Council to find, by at
least a two-thirds vote and prior to entering into the Development Agreement, that the tax incentive
in the Development Agreement is anticipated to raise more revenue than the amount of the
incentive within the duration of the agreement and, in the absence of a tax incentive, the Project
would not locate in Mesa in the same time, place, or manner.
Whereas, pursuant to A.R.S. § 9-500.11(H), the report of an independent third party was provided
to the City Council verifying that the proposed tax incentive in the Development Agreement is
anticipated to raise more revenue than the amount of the incentive within the duration of the
agreement; the independent third party’s analysis was paid for solely and exclusively by the City
as required by A.R.S. § 9-500.11(J). Further, Developer’s representative provided information to
the City Council and City staff confirming that the proposed Project would not occur in the same
time, place, or manner in the absence of the tax incentive.
Whereas, the Development Agreement does not provide a tax incentive for a “retail business
facility” as defined in A.R.S. § 42-6010(G), which is prohibited by A.R.S. § 42-6010; and provided
further, the prohibition for providing tax incentives in A.R.S. § 42-6010 does not apply to
“[i]ncentives consisting of reimbursement for public infrastructure dedicated to and accepted and
controlled upon completion of the project by the city,” and the incentives set forth in the
Development Agreement fall within this exclusion.
Whereas, the City Council hereby finds and determines that the Project will improve and enhance
the economic welfare of the inhabitants of Mesa in accordance with A.R.S. § 9-500.11, and that it
is appropriate to enter into the Development Agreement and other agreements and amendments to
facilitate the development of the Project (collectively, the “Deal Documents”).
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MESA:
Section 1:
Those findings required by A.R.S. § 9-500.11 are hereby found and determined by
the City Council; specifically, the City Council finds that the proposed tax incentive in the
Development Agreement is anticipated to raise more revenue than the amount of the incentive within
the duration of the Development Agreement and, that in the absence of the tax incentive, the Project
would not locate in Mesa in the same time, place, or manner.
Section 2:
The City Council approves the development deal as described in this Resolution and
presented to the City Council. The City Manager or designee is authorized, on behalf of the City of
Mesa, to execute the Deal Documents and any amendments, modifications, renewals, or extensions
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of the Deal Documents as necessary to carry out their intent or to facilitate the development of the
Project on the Property, provided they do not materially alter the terms or purpose of the
development deal or Deal Documents as presented to the City Council.
Passed and adopted by the City Council of the City of Mesa on September 14, 2026.
______________________________
Mark Freeman, Mayor
Attest:
_____________________________
Holly Moseley, City Clerk