Mesa, developer near $5.5M, 14-acre land deal

Mesa is on the verge of inking a deal to sell a $5.5 million property to a Las Vegas developer who envisions building a commercial and residential development in east Mesa.

The 14-acre property is part of a larger city-owned parcel of desert on the northeast corner of McDowell and Recker roads that is now home to a large municipal water tank that serves the Red Mountain area.

New upscale subdivisions have crowded the area around the city’s parcel, which also is near the under-construction Loop 202 Red Mountain freeway.

Recent growth has made the city property more marketable, said Doug Tessendorf, the city’s real estate services director. The parcel has been listed on the market since August and attracted three potential buyers, he said.

“It really wasn’t too marketable until recently. It’s becoming a property worth developing. Prior to that it was bare desert with a hill on it,” Tessendorf said.

Mesa is on track to sell the property to BP Holdings, a Las Vegas-based development firm that’s making a first venture into the Arizona real estate market, company officials said.

The company made the highest offer on the property, Tessendorf said.

BP Holdings has developed residential units in the Las Vegas area, as well as taverns and strip-mall retail centers, said Joe Bonifatto, a company official.

The Mesa City Council will discuss the property sale at its Monday meeting.

The potential revenue from the sale is important to the city.

Mesa financial officials have budgeted $6 million in revenue from the sale of city property to fund Mesa’s general expenditures in the upcoming budget year, which begins July 1.

A cash-strapped Mesa will depend on property sales to help finance the city’s general operations for the next decade.

The city holds thousands of acres in Pinal County that it likely will delay selling because of a recent slump in land prices there.

Since 2003, the city has sold $64 million in excess property that’s been funneled to city coffers.

Mesa officials say the current land sale is important to keep budget revenue projections on target.

“Every little bit counts. It especially counts up to the $6 million mark,” said Bryan Raines, deputy city manager.

BP Holdings plans to pull the necessary city permits to develop the property in 2008, Bonifatto said.

Groundbreaking could occur the same year.

The company has filed no formal plans with the city for the development, he said.

However, retail businesses and fast food restaurants that have not been able to locate on the nearby Power Road corridor directly to the east could find the parcel attractive, Bonifatto said.

Residential development on the property is less clear, he said.

“That’s the part we’re really unsure about,” Bonifatto said. “We could do some retail and some kind of a mixed-use component.”

The city put no conditions on the type of development that can occur on the property.

“The buyer can build whatever they want on the property that meets our zoning,” Tessendorf said.