Tempe Marketplace landed a couple more big-box shops — Ross and Shoe Pavilion — to add to the growing list of retailers for the $200 million shopping-dining-entertain- ment center planned for the southwest corner of the intersection of loops 101 and 202, developer Vestar said Monday.
And the company still plans to break ground in January on its largest project to date, said David Larcher, Vestar’s executive vice president. If construction begins in January, shops could be ringing up sales some time in 2006, Larcher said.
“We have every confidence we’ll be in good shape to meet our construction schedule,” he said.
Vestar previously an- nounced plans for a Harkins movie theater megaplex, which has grown from 18 to 20 screens, and Arizona’s first Dave & Busters entertainment complex in the 130-acre shopping center.
And Vestar has had Target, Old Navy, Cost Plus, Linens-N-Things, Pier 1 Imports, Best Buy, PetsMart, OfficeMax, Barnes & Noble and Michael’s on board for several months. “Now we’re almost 80 percent leased and 90 percent committed with more tenants still wanting to get in,” Larcher said.
Before Vestar can start building the stores, the company has to clean up the area because of the auto repair shops, landfills and other businesses that have used the land.
That, as much as the expected sales tax from Tempe Marketplace, is a boon for the city, which has invested heavily in the adjacent Town Lake area as a recreation destination, Larcher said.
“This is more than just another shopping center along the freeway,” he said. “It is the largest brownfield cleanup in Arizona history.” The site cleanup — expected to cost about $8 million — is already in progress, said Chris Salomone, Tempe’s deputy director of development services. But the biggest stumbling block is that Vestar and master developer Miravista Holdings don’t own all of the land. While Tempe is committed to using eminent domain to acquire the property, if necessary, that could delay the start of construction.
Eminent domain, or condemnation, forces reluctant landowners to sell their property at fair market value.
Salomone said the developers have accumulated about two-thirds of the property, and they’re in negotiations for the remainder.
“It’s not moving along as fast as the city or the developers would like, but we’re still moving towards January (ground-breaking) as a goal,” Salomone said. Tempe and Mesa have been rushing to get competing projects on the ground first. RiverView at Dobson, on the Mesa side of the Loop 101, has landed a Bass Pro Shop and other retailers.
Retail experts have said that only one project can be developed in that close proximity and the last to start construction will lose.
But Larcher — and RiverView developers — have pooh-poohed that.
“I believe there is room for two projects here,” Larcher said Monday. He said the proof of that is that retailers continue to sign up for each site.
Tempe has already approved an incentive package for the Marketplace project. It includes sales tax rebates that will cap off at $23.3 million to $26.7 million, and an eight-year property-tax abatement once the project is completed, which could be worth an estimated $9 million.
Vestar also gets help for the land cleanup, including a $1 million federal grant and a $7 million HUD loan. Once the project is completed, Tempe gets 30 percent of the sales tax generated for the first 15 years or until Vestar hits the cap. Of the other 70 percent, a portion goes to pay off the HUD loan, and the remainder is rebated to Vestar. After 15 years, or when the Vestar and HUD obligations are paid off, Tempe gets to keep all of the sales tax revenue.