Sept. 6, 2007 02:56 PM
George Kasnoff raised hopes – and eyebrows – when he announced plans for a $140 million retail/residential project on 13 prime acres in downtown Fountain Hills. Residents have long hoped to see this area developed with amenities they don’t have such as a movie theater, bookstore or home electronics store. Hopes were dashed when a previous effort fell through. This new announcement renewed anticipation that something might finally happen to complete downtown.
But don’t get out the big scissors for a ribbon cutting just yet. The plan for Fountain Hills Town Square has a ways to go, although it looks a lot better after the developers made significant changes Thursday morning.
Kasnoff owns the Water’s Edge restaurant in Fountain Hills. One partner, Conrad Properties West, is new to Arizona. A third partner, Nielsen-Fackler Planning and Development Co., is run by a retired Tempe city planner.
They are proposing a mixed-use development west of the town’s famous fountain with 250,000 square feet of lofts and condos, 170,000 square feet of retail and restaurants, 110,000 square feet of offices and a 10- to 12-screen movie theater. They say they seek to emulate the look of Kierland Commons.
The developers originally wanted the town to underwrite a parking garage, other infrastructure improvements and waive commercial permit and development fees, for a total of $9.2 million in taxpayer support. That would have been equal to the town’s annual sales-tax collection.
The request fell considerably Thursday. Developers reduced the size of the project, eliminating one building and downsizing the theater slightly. That knocked out the need for a parking garage.
Now developers are asking the town to put $1 million into street improvements mirroring those on the north side of Avenue of the Fountains, and about $1 million for a surface parking lot. They’ll still ask for a waiver of development fees. The amount is negotiable up to about $4 million, Dave Fackler said. That’s money the town wouldn’t get, not money out of its pocket.
A direct outlay of $2 million makes it easier to meet Town Manager Tim Pickering’s requirement that “Any financial investment must have a reasonable return. We want to make sure every taxpayer dollar shows a stream of revenue over the long term.”
But to put this in context, recall that Fountain Hills has agreed to only one incentive, for the Target Center on Shea Boulevard. It was a 10-year deal capped at $980,000 – or half the investment for a shopping center nearly twice as large as the proposed Town Square.
Other questions the project has raised:
• Can a town of fewer than 25,000 residents support a 12-screen movie theater? The planners hope to draw from a radius extending to Frank Lloyd Wright Boulevard, an area with 119,000 people. Three out-of-town companies are interested in operating the theater, Fackler said, and at least one has done its own market study.
The theater is vital as a magnet. “I’m not sure the commercial part of this is economically viable without the theater,” he said. If it won’t succeed, there’s no reason to do the project.
• The developers’ Web site said their purchase contract calls for closing by the end of October, but they must have all town approvals first. They have not filed any applications, and it usually takes four months to work through the process, Pickering said.
Fackler said the developers will close if they have Town Council approval of a concept plan and development agreement, the first step of a three-part process. “We should be able to get that through in October. If we can’t, that will tell us something, and we’ll walk away from the project,” he said.
The town has long wanted a significant development on this property, but that doesn’t mean it should jump without looking. The project has to be a good deal for the town as well as for the developers. The changes made Thursday bring it closer to that point. But don’t sharpen the big scissors until we see what October brings.
