With two landowners still holding out, developers and Tempe officials today are expected to symbolically start digging up a 117-acre chunk of land on the southwest corner of loops 101 and 202 to build a $250 million shopping center.
Tempe Marketplace, with its planned 1.3 million square feet of shops, restaurants and entertainment features, is expected to be completed in fall 2007.
It is being built by Vestar, which designed, built and manages Desert Ridge Marketplace in northeast Phoenix. The retail project Desert Ridge is the model for the Tempe shopping center.
“Last year, 22 million people visited Desert Ridge, and this is expected to be even bigger,” said Stacy Pearson, spokeswoman for Vestar. “This will be the largest openair shopping attraction in the country.”
Tempe Marketplace is poised to house Arizona’s first version of Dave & Buster’s entertainment complex, a Harkins 20-screen movie theater, and a collection of “bigbox” favorites.
Vestar has announced that Target, Old Navy, Cost Plus, Linens-N-Things, Pier 1 Imports, Best Buy, PetSmart, OfficeMax, Barnes & Noble, Michael’s, Ross Dress for Less, Shoe Pavilion and Sports Chalet have staked out space in the project. Other tenant names are expected to be announced today.
The project is already 90 percent committed, Pearson said.
Retailers were supposed to be ringing up sales at Tempe Marketplace this fall, but the project was stalled while developers and city officials tried to accumulate the land and get it cleaned up.
Vestar purchased property from all but seven of the 52 landowners who had businesses ranging from auto repair shops to landfills on the 130-acre spread. After an unsuccessful attempt to snag the rest of the parcels through the city’s use of eminent domain — a procedure that would force owners to sell for “fair market value” — Vestar eventually made deals with five of the holdouts. The project can be built without the two remaining parcels, Pearson said, but Vestar still hopes the landowners will agree to sell their land.
The environmental cleanup of the site has already begun, and is expected to cost $10 million.
Vestar has obtained a $1 million grant and a HUD loan to pay for the process.
Tempe has approved an incentive package for the Marketplace project. It includes sales tax rebates that will cap 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.
When the retailers are open for business, 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.
Tempe Marketplace will employ about 2,000 construction workers to build it, Pearson said, and when all the shops and eateries are open, they will employ about 4,500.