A real estate developer has pulled out of a mixed-use project in downtown Mesa. New York-based Athena Group decided not to move ahead with plans for the southwest corner of University and Mesa drives, city officials confirmed Wednesday.
Mayor Scott Smith said with the economic situation being as tough as it is, the company's decision "did not come as a shocker." "You want things to work out but this is the nature of real estate," Smith said. "You're at the whims of the economy and finances."
City Councilman Kyle Jones said the council, which took office this month, was given the update about a week or so ago. He said he was disappointed with the outcome. "I thought they would proceed," he said.
"When we first awarded them the opportunity, they had a timeline to do their due diligence and see if it was economically viable for them," Jones said. "With their studies they decided it was not in their best interest to proceed."
The Athena Group did not immediately return calls for comment. The residential, retail and office project was envisioned for 20 acres of a city-owned 25-acre parcel. Mesa Community College has considered extending its campus on the remaining five acres, but the city's economic development director, Bill Jabjiniak, said nothing definite has been worked out. Jabjiniak said the city got confirmation from Athena on halting the plans in April.
He attributed the outcome to "weak real estate fundamentals" and said the company decided that for now the project would be "economically unfeasible."
He added the previous council was informed about the decision.
Jabjiniak said the city is continuing to work through a commercial broker, Phoenix Commercial Advisors, to scout other developers to take over the property.
"It is a real estate downturn so we're being patient," he said.
In January, the council gave Athena a nod to conduct a market study and move forward with a preliminary design for the vacant parcel. Prior to the project, a time-share resort and a minor league baseball park had been proposed unsuccessfully for the site.
Smith said he's still looking at the positive side.
"I look at this as an opportunity as we can look at what we can do with the entire downtown area as a whole," Smith added. "We'll revisit the site with some of the locals and maybe we'll revise our vision for that area."