Sunday, May 1, 2011

City land deal near SkySong would allow for apartments

Scottsdale will consider a small-parcel land deal east of SkySong that would allow Mark-Taylor Inc. to develop apartments on a city-owned site.

The Scottsdale City Council voted unanimously Tuesday to negotiate with the Scottsdale-based apartment developer on an exchange of adjacent sites along 74th Street south of McDowell Road.

Scottsdale sought development proposals last year for a 3.7-acre city-owned site just south of the closed Los Arcos Crossing shopping center on 74th Street. That property would be offered to Mark-Taylor.

Mark-Taylor would offer the city 2.5 acres on the southeastern corner of 74th Street and McDowell.

The company has a sale agreement pending with ML Manager LLC to buy the 14.29-acre Los Arcos Crossing property for $6.4 million, according to ML Manager's portfolio newsletter. The 2.5 acres is part of that site.

"The city thought it would be to our advantage to acquire land with frontage on (McDowell) that could be sold later for retail development," said Christine Sheehy, who handles special projects in the city's Community and Economic Development Department.

An August 2010 appraisal of the city land placed the value between $800,000 and $900,000. Removing deed restrictions relating to parking and property setbacks would allow the higher value of $900,000 or about $5.55 per square foot, Sheehy said.

The Los Arcos Crossing property is under contract at about $10.28 per square foot. That would translate to roughly $1.12 million for the 2.5-acre site, although a corner lot could have a higher value.

Chris Brozina, Mark-Taylor associate vice president of development, declined comment on its development plans. The 25-year-old company has developed about 14,000 apartments.

However, Sheehy said Mark-Taylor's plans would involve a three-story, resort-style apartment complex with its primary entrance on McDowell just west of Miller Road.

SkySong, the ASU Innovation Center, is planning 325 apartments in a four-story building built around an existing parking garage.

"We are working on the details of the financing for the apartments and are planning to be under construction this summer," said Don Couvillion, vice president of real estate for the Arizona State University Foundation.

Attorney Paul Gilbert, representing SkySong, raised objections to a conceptual site plan for the site and how it would link to SkySong.

Scottsdale activist John Washington said earlier Tuesday that he has no faith in the city's ability to "make good decisions or negotiate effectively regarding real-estate transactions."

He is suing Scottsdale over a deal approved in March to sell a four-building complex downtown to Scottsdale Healthcare for $1.5 million.

"The easiest and simplest option . . . is to retain the (city) property until the real-estate market improves, and dispose of it via competitive bid," Washington said of the 74th Street land.

Last fall, two development plans were submitted to the city for its 3.7-acre site. That included a proposal from Tempe-based Global Entertainment Corp. to build a $50 million events center with a 5,500-seat arena.

North American Development Group, based in Ontario, Canada, proposed a $25 million shopping center of 200,000 square feet.

Both were contingent on acquiring the adjacent Los Arcos Crossing property.

After Mark-Taylor put the 14.29 acres under contract the city tried to negotiate with the interested developers to see if different uses could be combined. That failed and the city turned to a possible land deal with Mark-Taylor.

To complete the deal, Scottsdale will order appraisals of the two parcels, prepare a development agreement and process a rezoning request to allow the apartments.

by Peter Corbett The Arizona Republic Apr. 27, 2011 10:17 AM

City land deal near SkySong would allow for apartments

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