In turn, Diaz will receive a $120,000 grant from the Newport Economic Development Commission to be applied to upgrading their sewer treatment plant as mandated by the state.
As can be seen in the photo, the land in question is just to the east of the San Mateo community in Diaz just before the off ramp of Interstate 67.
According to Jon Chadwell, Director of the NEDC, discussion for the annexation began a couple of months ago when Dean Sides, owner of George Kell Motors, and Benji Harris, owner of Harris Ford, made it known that they would like to build new dealerships next to each other.
This area was chosen because both Sides and Harris already owned portions of the land and would bring attractive construction out on the interstate.
The problem arose from the fact that Harris Ford is located in Diaz which collects sales tax from the business and George Kell Motors is in Newport which in turn collects sales tax from the dealership.
If they were to build both dealerships in Diaz then Newport loses out on significant sales tax revenue and if they were to build in the Newport then Diaz loses.
"So, the Mayor (Stewart) and I sat down with Mayor Dwight Davis and with Joe James, city attorney for Diaz, and Steven Howard, city attorney for Newport, and we began to discuss a way to remedy somebody winning and somebody losing," said Chadwell at a recent public meeting.
Their solution, to annex the land where the dealerships wanted to build into Newport, which will collect sales tax from both dealerships, and the NEDC would provide a $120,000 grant as a replacement for the sales tax that Diaz would lose for the first 10 years that they would then use to upgrade their sewer treatment plant.
"Diaz has a significant need to upgrade their sewer system right now and (the grant) would give them a replacement for the sales tax they would lose for the first 10 years, with the knowledge that if the dealerships built there that things would most likely build on the left side of that new road because the (annexed land) will only be the right side of the road," explained Chadwell. "New things (businesses) tend to go by new construction, therefore, there would be the opportunity for Diaz to recoup the sales tax they are losing by something new coming in."
Chadwell says the grant would be to stabilize the situation of their revenue during the period while Diaz is trying to attract something new into that area which the NEDC pledges to work with Mayor Davis on that behalf.
The City of Newport unanimously passed their ordinance for the annexation at a meeting last month, a public meeting was held last Tuesday and the City of Diaz passed an ordinance 5-1 Monday night to move the project forward.
Page 2 of 2 - Only one citizen from either city, Phil McDonald of Newport, spoke out against the annexation at the public meeting and his statements can be read in their entirety in this week's Newport Independent.
"This makes it work the way everybody would like it to work and makes it where everybody gets something," said Chadwell. Both cities get something out of it, both dealerships get to be side-by-side and it's not a win lose situation for anyone."