Opinion: Does it make sense for Scottsdale to pay Axon $9M for infrastructure reimbursements?

On Aug. 25, the City Council will consider a plan to provide over $9 million in infrastructure reimbursements to Axon Enterprise Inc. These reimbursements would be paid to Axon in connection with its plan to expand its headquarters in Scottsdale with a new building.

This plan to provide infrastructure reimbursements to Axon raises important public policy issues which have not yet received public attention. The agreement with Axon was signed by the city on Aug. 11, only two weeks before the council meeting on Aug. 25. This leaves only two weeks for the council and the public to consider the terms of this important agreement.

Axon, formerly Taser International, was founded in Scottsdale in 1993 and has remained here ever since. Its main business involves providing technology for law enforcement and the military in order to provide smarter policing. It created and manufactures Taser weapons, body cams and software for managing digital evidence.

Axon is a highly successful, profitable company and is growing quickly. Its net sales were $420 million in 2018 and $530 million in 2019. Its revenue for the second quarter of 2020 was up 26% over the prior year.

Axon employs more than 1,500 persons, with 850 employed in Scottsdale. Other employees are in Seattle and offices located in several locations around the world.

As a result of its continuing growth, Axon is looking for a location in Scottsdale to expand its headquarters and consolidate leased space it currently occupies in Scottsdale and Phoenix. Axon’s headquarters is at 17800 N. 85th St. in Scottsdale, a prime location right off the 101 freeway and near the Scottsdale airport. In 2018, Axon reached an agreement with the Salt River Pima-Maricopa Indian Community to build a new headquarters on their land, but the deal apparently fell through when the Indian Community did not approve Axon’s futuristic design for its headquarters.

Axon is now looking to expand onto 74 acres of land in Crossroads East at the southeast corner of Hayden and the 101 freeway. This land is quite close to Axon’s current headquarters, which would allow the creation of a headquarters campus with the new building and its existing headquarters.


The land Axon is seeking to buy is currently owned by the Arizona State Land Department, which plans to auction the land on Sept. 20. If it is the successful bidder for the land, Axon plans to expand its current headquarters onto this land with a new building. The land in question is on the inside corner of the 101 freeway as it turns west, north of the intersection with Princess Drive.

In anticipation of Axon’s purchase of the new property, on Aug. 11 the city and Axon entered into a public infrastructure reimbursement development agreement. This agreement provides that the City of Scottsdale will pay Axon as much as $9,408,716 in infrastructure reimbursements for widening Mayo Boulevard and Hayden Road. This agreement provides that “in the absence of the reimbursements for public infrastructure to be built by [Axon], [Axon]… would not expand in the City of Scottsdale and may move its existing facility outside the city.”

In other words, Scottsdale is agreeing to pay Axon over $9 million in the face of Axon’s threat to leave Scottsdale. Does this make sense for the city? It’s a tough question to answer, but here are some of our thoughts.

The agreement seems particularly unfair at a time when many Scottsdale businesses are suffering and going out of business in the wake of COVID. The $9 million would go a long way in shoring up Scottsdale businesses. How do you tell a closing restaurant that a highly profitable Scottsdale business needs $9 million or else it will leave the city? While the $9 million wouldn’t be paid out until several years in the future, it is still money the city doesn’t have to spare.

Is Axon’s threat to leave Scottsdale real? Obviously, Axon is the only judge of this question, but the facts indicate it wouldn’t make sense for them to leave. Their current headquarters is conveniently located right off the 101 freeway and near the Scottsdale airport. The property they wish to purchase is adjacent to their current headquarters, making it possible to create a larger headquarters campus utilizing their current headquarters. The company has been in Scottsdale since 1993 and many of their employees are presumably from Scottsdale and the surrounding area.

Scottsdale has proven itself to be a great place for business, particularly in the wake of COVID. A recent study found that more people are moving to Scottsdale than any other place in the country, as they flee urban centers like San Francisco and New York. It’s difficult to understand why Axon would find a better location elsewhere. Would they expand in Seattle? That seems very unlikely, especially now.

Of course, part of Axon’s motivation is undoubtedly the large payment of over $20 million made to Nationwide to relocate its business north of the 101 freeway at Hayden. That was a very unpopular decision in many quarters and now Axon is trying to ride on that precedent. If the payment to Axon goes through, any business locating in Crossroads East would be foolish not to demand a similar payment from the city. Setting a precedent that businesses can charge a price to stay in Scottsdale seems foolish.

It is difficult to understand how the improvements to be built would improve the lot of anyone in Scottsdale except for Axon and other businesses in that area. The proposed widening of Mayo Boulevard would provide easier access to Axon and other companies, but since Mayo Boulevard dead ends short of the 101 freeway, these improvements would not provide much of a benefit to overall traffic flow.

One important benefit to the development agreement is the possible addition of employees to the new location. Axon has indicated it may add 650 jobs to the new location, but there is nothing in the development agreement which requires it do so. Instead, the development agreement provides a “milestone” of $130,000,000 in annual payroll in five years. There is nothing in the agreement which explains how this amount relates to Axon’s current payroll, and there is nothing in the agreement which sets a minimum number of new employees. If the City Council goes ahead with this agreement, it should include specific provisions for a minimum number of employees to be added to earn the $9 million in reimbursements.

As part of the development agreement, Axon will dedicate to the city 4.5 to 6 acres for a civic use, which will include a fire station, a water pump station and a possible command center. The city will pay for this land at the same price as paid by Axon. It is not clear if these new civic improvements are necessary due to the presence of the new headquarters building.

The proposed design of the new headquarters building represents a change from normal Scottsdale design standards. The design submitted by Axon is very futuristic, representing nothing so much as spaceship. Due to its prominent location on the 101 freeway, it will be hard to miss. Axon has requested an “illuminated wave motion feature at the nose of the building,” which may feature “projection or mapping of images for changing lights and swirling motion.” Axon also plans yellow banding linear accents along building facades to highlight its brand color. The plans include an illuminated 40-foot-wide Axon logo on the top of the building. Axon plans to seek numerous zoning variances, including one that would allow the new building to be 82 feet tall.

The development agreement provides that Axon’s plans will be subject to the normal review by the Development Review Board and appropriate zoning regulations. If the appropriate boards and commissions do not approve of Axon’s plans, Axon has no commitment to build the new headquarters and can presumably walk away from the agreement --- as happened previously when the Salt River Pima-Maricopa Indian Community did not approve Axon’s design.

Axon is exactly the type of company we want in Scottsdale. It is a high tech, low impact manufacturer which is a leader in its field and provides good jobs. The City Council, however, should make a policy determination of whether it should continue to reward companies to stay here when Scottsdale is already such a great place to build a business.

Editor’s note: Betty Janik and Tom Durham are both City Council candidates in the Nov. 3 general election.