Ongoing real estate negotiations and a lawsuit have forced developers of the proposed Tempe Marketplace to push back the start of the mall’s construction from January to late spring.
But David Larcher, executive vice president of development company Vestar, said the project is still on track.
"At this point I don’t see anything that would slow our progress down," Larcher said, adding that construction is now scheduled to begin in May.
Nearly 20 landowners on the northeast corner of Rio Salado Parkway and McClintock Drive are still negotiating or have refused to sell to Miravista Holdings and Vestar, city officials said.
An agreement with the city states that developers must assemble all the property necessary for the $200 million project before the area will be rezoned for commercial use.
Currently, the area is zoned for heavy industrial and agricultural use. Without a zoning change, construction crews cannot start work.
Crews have already started demolition and environmental cleanup on properties owned by the developers, Larcher said. "In that respect we are ahead of schedule," he said.
A lawsuit recently filed in Maricopa County Superior Court alleges that Brad Wilde, manager of Miravista Holdings, broke a contract with a pair of property owners.
According to the lawsuit, Allen and Mary Benjamin cut a deal to sell their land at 1950 Rio Salado Parkway to Wilde for nearly $1 million. The lawsuit also says Wilde agreed to sell the Benjamins’ property at 440 and 460 W. McKellips Road in Tempe.
"We’re seeking to enforce a contract that Miravista Holdings made with the Benjamin family," said Scott Zwillinger, an attorney representing the property owners.
In a legal document responding to the allegations, Miravista Holdings denies reaching a deal for the sale of the properties.
"There has been no settlement discussions," said James Braselton, an attorney representing the developers. "We have sent out proposals, but we have not heard back."
Braselton said the property is still owned by the Benjamins.
The City Council authorized city staff in April to use eminent domain to seize property if negotiations between private developers and the landowners break down.
During Thursday’s meeting, the council unanimously voted to enter into an agreement with the developers that allows both parties to share privileged legal information regarding condemnation actions.
The city attorney’s office has scheduled a closed-door discussion regarding the Marketplace on Thursday.
Marlene Pontrelli, an attorney for the city, said Tempe has no plans to move forward with condemnation yet, but added that she will update the council on the progress of land acquisitions in January.
Meanwhile, Larcher said a competitor’s plans for a similar mall in Mesa have not created additional pressure to begin work on the Marketplace. He dismissed a recent study by Ernst and Young that concluded Mesa’s Riverview at Dobson project and the Tempe Marketplace could not exist side by side.
The market analysis commissioned by Mesa states that if the Tempe project breaks ground first, the two malls could "cannibalize" each other.
"We look forward to their project," Larcher said, "Because the more retail synergy we can get, the better it is for the area."
A group opposing the Riverview project has turned in enough signatures that, if validated, would force an election on the site’s zoning. A special election could be called by the Mesa City Council no earlier than May.