Why Did Hobby Lobby Start Construction Before Council Approval?

vote4cblack
4 days ago
2 min read

Kingman residents deserve transparency when it comes to economic development agreements. The City Council has not yet approved the proposed tax incentive agreement with Hobby Lobby, yet construction on the store has already begun. This raises serious questions:

Why is construction underway before an official vote?
Has any informal assurance been given to the developer?
Does this put pressure on the Council to approve the agreement regardless of public input?

Hobby Lobby’s own statement, verified by Applied Economics, claimed the project would not happen without the tax incentive because of high renovation costs and lack of suitable locations. Yet, construction is happening anyway.

What Arizona Law Says About Tax Incentives (A.R.S. § 9-500.11)

Under A.R.S. § 9-500.11, the City must prove that the development “would not occur in the same time, place, or manner without the incentive.” If Hobby Lobby is moving forward without approval, that finding could be undermined—raising questions about whether the legal justification for the agreement still holds.

Key Requirements:

Cities can spend public money on economic development (Sec. A).
Cannot impose new fees or taxes on one industry to fund incentives (Sec. B).
No emergency approvals; decisions take effect 30 days after final approval (Sec. C).
Economic development activities must create jobs or improve economic welfare (Sec. D.1).
Expenditures include rebates, credits, or tax reductions offered as inducements (Sec. D.2).

If construction starts before approval, it challenges the “necessity” test under the law.

Kingman City Council Action: November 18 Meeting

This item is scheduled for the November 18th City Council meeting as Item C on the consent agenda:

Notice of Intent to Enter Into a Site-Specific Economic Development Agreement

Pursuant to ARS 9-500.11, before entering into a retail development tax incentive agreement, the City must find that the proposed tax incentive is anticipated to raise more revenue than the amount of the incentive within the duration of the agreement and that, in the absence of a tax incentive, the retail business facility would not locate in the City. These findings must be verified by an independent third party before the City can enter into the agreement. Included with this item are the Findings of Fact, Verification Letter and Notice of Intent to enter into a development agreement with Hobby Lobby Stores, Inc. Consideration of the Development Agreement will be on the December 2, 2025, City Council meeting agenda. Staff recommends adoption of the Notice of Intent.

Why This Matters for Kingman Residents

This isn’t about opposing growth—it’s about accountability and public trust. Incentives should be debated openly, approved lawfully, and serve the public interest—not become a rubber stamp after construction starts.

👉 Read the full statute here: A.R.S. § 9-500.11