Projects slated for development on the
According to some developers involved, the proposal would raise impact fees from current levels of $3 to $4 per square foot to $9 to $12 per square foot, making new development on leased tribal lands cost-prohibitive for many. They said impact fees in surrounding communities are significantly less, with Scottsdale,
A spokesman for the tribe said no decisions have been made and the tribe could not provide any estimated fee increases.
Impact fees — which are used to pay for infrastructure, such as roads, schools and public safety — normally are paid when a building permit is obtained, so the increased assessments would be levied only against new phases of construction.
The proposed — and, in some cases, partially built — commercial developments are along
Most of the land on the
The land leases signed between developers and individuals took years to negotiate. They have 65-year terms and normally include 10-year options beyond that.
“We’ve spent a long time building relationships with these families,” said Gerry Blomquist, a partner in
That project, which has yet to break ground, is designed to include 2.5 million to 3 million square feet of office, industrial and hotel space.
Two other development firms,
In an unusual twist, members of the tribe who negotiated leases with developers oppose the fee increase because they fear it will diminish their property values.
According to a letter obtained by the Phoenix Business Journal, the tribe invited landowners to an April 7 roundtable discussion on the matter. Developers and nontribal members are not allowed to participate. The tribe’s media specialist, Levi Long, would not confirm that such a meeting was scheduled, but he emphasized that discussions are ongoing.
Russell Ray, a spokesman for the
“It was a complete farce. There was no exchange of views or positions,” Ray said of the meetings. “The staff and consultant presented their plans, but would not explain how they came up with their information and positions. They completely worked on this in a vacuum.”
Meanwhile, Trey Eakin, senior vice president of development at The Barclay Group, which hopes to build a SuperTarget and large retail center near
“They will completely shut down commercial development in the community. The total impact fees to our retail project, if we developed 80 acres, would be in the $18 million range,” he said. “The damage now is that most of our tenants have us on hold pending some formal resolution of this issue; and until that is accomplished, we just sit and continue to eat up land carrying costs.”
Chuck Kennedy, president of Grosvenor Holdings, said his company has spent 13 years negotiating with landowners to build two mixed-use projects on sites held by individual families. He said most developers understand the need for assessing impact fees, and he was not concerned until he saw the proposed numbers.
“When we got that initial draft, the fees were significantly increased,” Kennedy said. “It showed that the price per square foot for retail would be $12 to $13. That would be a killer for us.”
Although he has heard the increases likely will be reduced from those initial numbers, he believes assessing any increase now is hard to swallow.
“One problem with all of this is the timing,” he said. “We’re all struggling to survive in this economy. If we start adding this on at this time, it kills our ability to complete these projects.”
Marty De Rito, CEO of
Kurt Rosene, senior vice president of national development for
The seven-member Tribal Council, plus the president and vice president, must vote on the issue before any change can occur, but no timetable has been set.
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