Phoenix (December 14, 2010) – The Gilbert Town Council has a big decision to make on Thursday with respect to the fate of a proposed downtown mixed use project.
“Heritage Marketplace” is a proposed mixed use development that has long been billed as an important catalyst to revitalization in downtown Gilbert. The 2.7-acre project proposes five buildings comprising a total of 90,000 square feet for office, retail and residential uses. The project may be another unfortunate casualty of the recession which is a huge disappointment considering the 350 jobs and $15 million in annual payroll that town officials estimated to result from the project. Town officials reported to Council several years ago the essential nature of job creation in any successful downtown redevelopment effort.
A development agreement for the project was executed in 2007 and was since amended last December. The following are some of the key deal points from the agreement:
- It sets the purchase price of the land at approximately $218,000 per acre.
- It requires the developer to pay a total of about $1.7 million for the land and an adjacent parking garage.
- It requires the developer to commence construction by no later than December 31, 2010.
- It obligates the town to pay $7.6 million for the construction of the 365-space parking structure upon “substantially complete” work on part of Heritage Marketplace.
The Town Council must decide whether to extend the deadline outlined in the agreement or cancel the agreement altogether considering that construction on the project will not commence by its prescribed due date. To fund the parking garage, the town has already begun the fulfillment of its obligations by selling Public Facility Municipal Property Corporation bonds which do not require voter approval. As a result, the town is paying 5% interest and earning about 1% while the money sits in a bank. The town maintains that the parking garage remains a vital piece of infrastructure to support future economic growth in downtown Gilbert. The town contends that such a facility helps support the employment densities that will be needed in the Heritage District to make it a viable commercial location.
So now the Town Council has a decision to make. Several options are on the table for this decision, which may involve amending or dissolving the agreement. The options are as follows:
- Amend the agreement to extend the construction timeline or to allow the town to build the parking structure before Heritage Marketplace is constructed.
- Dissolve the agreement and wait until the market improves to advertise the land to a new developer, begin the search for a new development partner, or commence work on the parking structure without a current development partner.
Read more at AZ Central…