A developer claims it lost tens of millions of dollars on a project along Tempe Town Lake because the city broke promises and dragged its feet while reviewing plans.
Gray Development Group is seeking unspecified damages relating to the Mondrian apartments, which are under construction near the In-NOut Burger on the southeast corner of Rural Road and Loop 202. Gray Development filed a claim Jan. 6 in Maricopa County Superior Court.
The city acknowledges making mistakes that delayed the 523-unit luxury project.
“We did our job,” said Chris Anaradian, manager of the Development Services Department. “We just took too long to do our job at several stages of this project in 2004.”
As Gray was planning the project in 2004, it signed a deal with Tempe to fast track the development review process. This speedy review was key to making the project profitable without city incentives, Gray alleges in its claim.
But Tempe delayed the project by initially approving — and later denying — a design that was critical to its look, function and cost structure, Gray contends. Tempe also didn’t review documents as quickly as promised, the claim states.
The city’s delays boosted Gray’s cost because some subcontractors turned to other jobs instead of waiting for Mondrian to start, according to the claim. The replacement contractors cost more and key building materials grew more expensive as the project dragged on, Gray says.
Officials at Gray’s Phoenix offices were not available for comment Wednesday.
The delays resulted from internal communication problems at Tempe and from talks between the city and the developer, Anaradian said. Some city officials became aware of the problem in late 2004, Anaradian said, and fixed the situation by ensuring Mondrian plans got the kind of speedy attention spelled out in its deal with Gray.
The suit didn’t surprise the city, Tempe City Attorney Marlene Pontrelli said. But Tempe and Gray have addressed the problems alleged in the claim, she said.
“I see this as something that probably can be resolved,” she said.