Chandler buys prime real estate for development - East Valley Tribune: News

Chandler buys prime real estate for development

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Posted: Tuesday, July 1, 2008 10:29 pm | Updated: 9:11 pm, Fri Oct 7, 2011.

Chandler officials are moving forward with plans to spend up to $12 million to buy a prime parcel of real estate in the city so it can be held for private development.

Downtown developers face suits over unpaid bills

The city has no concrete plans for the 31.5-acre site on Kyrene Road between Chandler Boulevard and Loop 202, said Christine Mackay, Chandler's economic development director.

$12 million property, Priest Dr., Rural Rd., Kyrene Rd., 48th St., 56th St., Chandler Blvd., Ray Rd., Warner Rd., 202, 10, Gabriel Utasi/TRIBUNE

Mackay said the city is considering buying three or four more properties along Loop 202 and holding them for a future sale, but insists Chandler isn't getting into the land-speculation business.

The end goal, Mackay said, is to give the city the power to control how the land is developed.

The parcel on Kyrene is among the last remaining ones in west Chandler, and the city would prefer that businesses be built there rather than homes in order to reap the greater tax revenues, Mackay said.

Zoning restrictions alone could not stop a developer from building houses there, shesaid.

The decision to buy the land was approved Thursday by the Chandler City Council.

"It made some sense for something special to go on it," Mackay said of the property. "Honestly, we don't know what it is yet, but it made sense to us to control that last great parcel of land."

But Byron Schlomach, director of Goldwater Institute Center for Economic Prosperity, a conservative think tank, said it makes no sense for the city to be buying land to hold for future sale to private developers.

The practice is a "pretty close cousin to eminent domain," the government's power to seize private property for public use, Schlomach said.

"What they're doing is using the power of the purse to choose winners and losers in their community," Schlomach said, adding that in the free market, the best use of the land is decided by the highest bidder.

"They're interested in what they define is the right bidder," Schlomach said.

The city has many options to pursue, Mackay said.

The land is adjacent to a 58-acre parcel the city has owned since 1994, which opens the possibility of developing all 80 acres.

The city could sell the land outright to someone who is willing to build what the city wants there, or solicit developers to come up with ideas.

The City Council now has 90 days to get out of the deal ifproblems surface during duediligence and environmental tests.

Even in difficult economic times, Mackay said the city had the funds available because leaders and staff have been fiscally conservative for years.

Mackay said the city approached the landowner within the last two or three months and has been able to seal the deal rather quickly.

The landowner is International Capital Partners, or ICP, a company that is proposinga $500 million redevelopment of a portion of downtown Scottsdale.

ICP has been sued four times this year - twice in June - for unpaid bills and loans, according to court records.

A lawsuit filed June 23 alleges that ICP owes Scottsdale Fashion Square more than $160,000 for unpaid water bills and fees for maintaining common areas shared by the company's headquarters, at 6909 E. Camelback Road, and the mall.

The company hasn't paid those fees or its water bill since November, the suit alleges.

A bank and an investment company allege in other suits that the company owes them more than $2 million and $1 million, respectively, and a car-rental company won a $36,000 judgment against the company for unpaid bills.

ICP's chief executive, Tom Donahue, did not answer questions for this story.

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