Statement on Mesa City Council's Approval of the Palo DistrictCity Council Meeting - 11/26/2025

 

Statement on Mesa City Council's Approval of the Palo District

November 26, 2025 at 4:36 pm

 

"The formation of a Theme Park District at the former Fiesta Mall site provides additional development tools that will facilitate new opportunities for transformative investments at one of the most attractive redevelopment sites in the state of Arizona. Mesa is committed to attracting and supporting businesses that align with our vision of bringing high-impact economic opportunities, well-paying jobs and world-class amenities and experiences that enhance the quality of life in our city."

Palo District Fact Sheet 

 

Palo District Fact Sheet
District 3, Proposed Theme Park District Formation

Action before Council
• Approve formation of the Palo District: theme park district on ~80 acres within Mesa
(former Fiesta Mall area).
• Elect two City Councilmembers to the district’s four-member governing board.
• Approve a Development and Intergovernmental Agreement (IGA) between the City, the
Palo District and the property owners (current and successor).

Purpose
• Support redevelopment of the 80-acre privately-owned Fiesta Mall site.
• Provide a dedicated financing and governance mechanism to advance development.

Key Background
• Fiesta Mall closed in 2019; demolition began in 2023. 2024: City approved rezoning to
Infill Development District 2 (ID-2) to allow mix of uses.
• Property owners requested the creation of a Theme Park District to help finance and
manage redevelopment.
• Theme Park Districts are allowed under A.R.S. Title 48, Chapter 36 and are separate legal
and financial entities from the City. This would be the second theme park district in AZ.

What a Theme Park District can do
• Acquire, construct, renovate or lease district facilities.
• Levy a transaction privilege tax (TPT) on business activity within district boundaries (in
addition to state and local TPT).
• Issue revenue bonds (not City debt).
• Operate independently with a four-member board: 2 City Councilmembers, 1 public
member appointed by the Speaker of the House, 1 public member appointed by the
Senate President.

Key Terms of the Development and Intergovernmental Agreement
• City bears no financial responsibility for district debts or obligations.
• Public improvements must meet City engineering standards and be dedicated to the City
at no cost.
• Owners/Successor Owner must maintain a replenishable expense fund to cover City costs
related to district formation and oversight.
• The district must hire its own professional and administrative support. (No City staff.)
• District, Owner and Successor Owner must indemnify the City.
• Future owners and businesses must be informed that the property lies within the district
and may be subject to district TPT.

 
Fiscal impact of the theme park district to the City
• City has no obligation for district operations or maintenance, except for public
improvements formally dedicated to the City.
• A potential property tax exemption exists under state law, but it is not automatic and
would only affect the secondary property tax within the district (~$17,800 in FY25).