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Tempe announces $600 million office development deal

Plans for a major office and retail complex on Tempe Town Lake were unveiled Friday, launching the next wave of the city’s ambitious waterfront development.

The $600 million Marina Heights project, which will be anchored by an 18-story local State Farm insurance company headquarters, is being touted as the state’s largest office development and the catalyst that will help transform the lakefront into the hot spot for upscale offices and condominium projects originally envisioned.

The State Farm building will include 1.9 million square feet of office space in five buildings on a 20-acre site north of Arizona State University’s Sun Devil Stadium. The project promises to bring jobs and jump-start an area where development stalled during the recession.

A 10-acre lakeside plaza and more than 40,000 square feet of retail space is included in the plan, which will be developed by the Ryan Companies US Inc. and Sunbelt Holdings of Scottsdale.

State Farm expects to move much of its Valley workforce into Marina Heights in 2017. The insurance giant has 2,100 employees at four local offices with immediate plans to hire another 900 workers.

The Marina Heights project faces a review by the Tempe City Council but Mayor Mark Mitchell was enthusiastic about what it will bring to the city.

“These employees, buildings, and amenities will further contribute to and showcase the vibrancy of Tempe Town Lake, Mill Avenue, and Arizona State University, and serve as a catalyst for more high-quality development,” Mitchell said in a statement.

Marina Heights will bring development to a lakefront that saw some projects stall during the recession.

One high-profile project was the Bridgeview Condominiums at Hayden Ferry Lakeside, a 12-story tower with 104 units that opened in 2006. It sold for $20 million in 2009, a fraction of its value, and still had 64unsold units.

Since the Salt River was dammed to create Tempe Town Lake in 1999, private development still only pays about 20 percent of the costs to operate and maintain the lake. The private sector was supposed to absorb 60 percent of the costs under the original development plan for the area.

The Marina Heights project could help relieve taxpayers of some of that burden.

The project is expected to boost ASU’s efforts for development in its adjacent Athletics Facilities District.

The university plans to seek redevelopment of a 330-acre area near Rio Salado Parkway and Rural Road to help fund renovations of Sun Devil Stadium and other sports venues. The Packard Stadium baseball complex and Karsten Golf Course are part of the planned redevelopment.

The Sun Devils’ baseball team plans to move to Phoenix Municipal Stadium in 2015.

ASU President Michael Crow called the development “the first major step in the campaign to fund new and renovated sports facilities for the university.”

Ryan Companies US and Sunbelt Holdings, joint-venture partners, are selling the 20-acre office site to ASU, which will lease it back to them. State Farm will then lease the space from Ryan Companies and Sunbelt Holdings.

Sara Dial, a Ryan Companies spokeswoman, said the deal had not closed and she declined to disclose the sale price or lease terms.

Heidi Kimball, Sunbelt Holdings vice president, said construction would start as soon as the development partners can get their building permits approved.

Marina Heights will include five buildings of four to 18 stories with two levels of underground parking, she said.

State Farm, the sole office tenant, will house employees who provide claims, service and sales support to its customers.

“State Farm selected Tempe because it has a growing population with skill sets that match our customers’ needs,” said Mary Crego, State Farm senior vice president.

“The site along Tempe Town Lake gives our employees access to nearby amenities as well as easy connections to public transportation.”

The Valley’s Metro light rail line is just south of Sun Devil Stadium.

State Farm currently has more than 1 million square feet of space that it owns or leases in the Valley. That includes its operations center at Alameda and Priest drives.

State Farm is selling that property and leasing it back for 10 years, said company spokesman Robert Villegas.

Drawings of the Marina Heights development will be unveiled in July after plans are reviewed by the Tempe City Council, he said.

The State Farm office buildings will disrupt two parking lots for Sun Devil Stadium.

Season ticket holders who park in Lot 4 and RV 4 north of Rio Salado Parkway will have to be relocated this coming season.

That is expected to affect parking for 469 automobiles and 46 recreational vehicles.

Illinois-based State Farm is ranked No. 44 on the Fortune 500 list of the largest companies.

It has 65,000 employees and 17,800 agents.

Republic reporter Jeff Metcalfe contributed to this article.

Corporate welfare at Tempe Town Lake!!!!

Corporate welfare at Tempe Town Toilet!!!!

1) A large part of the time the park is not open to the public, but used for events to raise money for the royal rulers of Tempe. And these events are expensive to attend and most of the working class people that live in Tempe can't afford to attend the events, despite the fact that these people were forced to pay for Tempe Town Toilet with their hard earned tax dollars.

2) These events cause huge traffic jams and parking problems in the downtown Tempe area

3) When these events are concerts they routinely keep people awake late at night in the entire downtown area, and as far north as Roosevelt Road in Scottsdale which is also Continental Drive in Tempe. I am not sure how far south the concerts can be heard.

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Tempe to weigh revising Town Lake plan

By Dianna M. Náñez The Republic | azcentral.com

Tue Jul 30, 2013 12:10 AM

The Tempe City Council took a leap of faith more than a decade ago when it sank $44.8 million into building a 2 1/2-mile-long lake in the desert.

The council hoped that risking the debt to create high-profile waterfront property would pay off in the long run for Tempe, then a landlocked city desperate for new development.

But 14 years after the lake opened in 1999, city finance officials say Tempe is faced with a reality check that Town Lake is far from reaching the city’s development goals.

Tonight, the council is expected to consider revising a financing plan for Town Lake.

City finance officials have said the revised plan would give developers a financial break on their share of costs tied to the man-made lake [i.e. - stiff us taxpayers with the cost], make private development more affordable [i.e. stiff us taxpayers with the cost] and, ultimately, advance Tempe’s plans to secure sufficient lakeshore private development to ease the hefty public costs of maintaining Town Lake. [now the last phrase certainly is an oxymoron - give tax dollars private developers to lower the cost to taxpayers - now that's an impossibility - the more we give them the more it costs us]

But critics argue that taxpayers have long carried the financial burden for private lake development.

The new plan offers no guarantee that economic breaks for developers will actually spur construction, argue Joe Pospicil and Art Jacobs, two longtime Tempe residents who regularly question city finances and criticize lake expenses.

If approved, the revised plan also would shift the burden of paying for a new west-end lake dam, which the city has estimated will cost at least $37.4 million, to Tempe taxpayers, freeing developers from sharing the expense to replace the dam. [That a fancy way of saying give boatloads of our hard earned tax dollars out in corporate welfare rich corporations - the rich corporations that give bribes, oops, I mean campaign contributions to the members of the Tempe City Council]

Approval of the city proposal would mark the second time a Tempe City Council, aiming to drive development, has tweaked the original 1995 lake-financing plan in favor of developers. The first was in 1997.

Mayor Mark Mitchell said he believes the proposal merits more time in the public realm so that council members may gain sufficient community feedback. [Translation - he wants to make it look like the taxpayers approve of the members of the Tempe City Council giving boatloads of our cash to the rich corporations that gave the members of the Tempe City Council bribes, oops, I mean campaign contributions]

But it remains to be seen whether Mitchell’s colleagues agree that the council has a responsibility to arrange future forums for the public to question and comment on the proposal.

As of Monday, the proposed changes were included on the agenda for today’s council meeting.

The finance proposal is not set for a two-hearing process, which would have allowed for public comment at the first hearing and then required a vote and a second opportunity for public comment at a future council meeting.

That means the council could choose to approve the revised Town Lake financing plan with little opportunity for public input.

But before the council agenda was posted on the city’s website Friday, Mitchell said he still had questions about the financing plan.

“When we initially developed the lake, we had a plan, but it’s a working document,” he said. “We might change it, we might not. (But) we’ll have enough time to thoroughly review (any formal changes).” [translation - we know how to run your life better then you do, but if we screw it up don't blame us]

Mitchell said he expects staff today to merely explain the long-term impact of the proposed changes. [That pretty simple Mayor Mitchell, you and the other royal members of the Tempe City Council will be giving our hard earned tax dollars out as corporate welfare for years to come to corporations that give you bribes, oops, I mean campaign contributions]

The proposed finance changes were triggered by an economic reality check, Roger Hallsted, the city finance analyst for the Rio Salado Community Facilities District, told The Arizona Republic.

“From all of our original projections, (we were) thinking really by about this time ... the lake would be built out,” Hallsted said.

Tempe’s goal is for private development on 120 acres to generate assessment fees covering 60 percent of annual operations costs. [So us taxpayers will be forced to pay for 40 percent of the developers costs]

But a Republic analysis last year revealed that in the 13 years since the lake was filled, private development still only covered about 20 percent of operation and maintenance costs, well below the 60 percent envisioned in the original city plan. [So in stead of us taxpayers being stuck with paying 40 percent of the developers costs, we are stuck with paying 80 percent of the developers costs - if you ask me us taxpayers are getting screwed on this deal]

Tempe taxpayers have and continue to pay the majority of the $2 million to $3 million in annual costs for operations and maintenance as well as most of the bill for the $44.8 million in original construction costs. [translation - us taxpayers are getting screwed - also did you know that the city of Tempe spends more on Tempe Town Toilet, aka Tempe Town Lake then on all the other parks in Tempe combined???]

Private investment has spurred construction of about 24 acres of condos, high-rise office and commercial space around the lake. Town Lake supporters blame the recession for slower-than-expected development. [Well why didn't the freaking geniuses on the Tempe City Council figure out this??? I guess they were too busy taking bribes, oops, I mean campaign contributions from the rich developers]

The proposed changes to the financing plan are aimed at making land surrounding Town Lake more attractive to private development, Hallsted said. [yea, like giving then 10 times as much corporate welfare as originally planned]

If the council approves the changes, Town Lake developers would pay less toward their share of payments for the original construction costs. [And us taxpayers get screwed again and will have to make up the difference]

The proposal emanated from Tempe’s Enhanced Services Commission, Tempe Finance Manager Ken Jones said. [It sounds more like it came from the developers who will be getting the corporate welfare if you ask me!!!!]

The commission includes representation from Jones; Town Lake developers; Nancy Hormann, the president of the group that manages the downtown Tempe district; and Arizona State University, which owns and is attempting to develop acres of lakeshore property. [yes I was right, it did come from the developers who will are getting the corporate welfare!!!!]

A Republic review of public records from the commission meetings shows that commission members have spent the past year discussing development and maintenance plans for the lake.

At a January meeting, Jones asked for “the logic behind asking the council to cover the cost of replacing the dams,” according to public records of the meeting. [If you remember it was the idiots on the Tempe City Council who get screwed on the damn. The accepted a worthless ORAL 30 year guarantee on the damn, which failed after 10 years causing us taxpayers to get stuck with the replacement costs]

Hallsted said shifting the cost of the dams from being a shared debt with private developers to a taxpayer-only-funded cost is the result of the original rubber dam deteriorating years earlier than expected. [yea, like I just said]

“These new dams, at $38 million to $50 million, if we were to put that in at the true cost, just the (Town Lake) infrastructure replacement budget would have gone from $531,000 (annually) to $2 million,” he said.

The city had to face facts, he said, that it would have to shoulder the dam’s cost rather than “bankrupting every single (lake) property owner,” Hallsted said. [f*ck you!!!! bankrupt the developers for making dumb decisions, not the taxpayers. Or let the members of the Tempe City Council pay for the whole thing.]

The commission questioned whether it’s “more expensive to build at the lake than anywhere else in the Valley” and whether the city was “willing to offer an incentive to level the playing field,” according to public meeting records. [Well maybe the idiots on the Tempe City Council should not have build the lake, since it is a money losing experience]

The commission recommended a plan that would lower an annual “holding fee” of sorts that developers pay until they build on their lake property. [translation - make the taxpayers pay more of the developers expenses - i.e. more corporate welfare for the rich corporations building stuff on Tempe Town Toilet]

If the revised plan is approved, that fee would be reduced from the current 5 percent to the rate of inflation, which is currently 2.2 percent, Hallsted said. [which the Tempe taxpayers will pay]

The financing proposal also includes lowering the annual interest rate developers pay over the 25 years they are allowed to pay back their share of lake construction. [again, which the Tempe taxpayers will pay]

The current interest rate is 5 percent, and the proposal would lower it to 3.64 percent, Hallsted said. He added that the proposal calls for the council to make the rate reduction retroactive to July 1, 2009.

If the council approves rolling back the fee, developers that have built existing commercial and residential development at the lake would receive credits on biannual debt payments they are currently making. [and us taxpayers will be stuck with even bigger bills. Of course the members of the Tempe City Council will get to keep the bribes, oops, I mean campaign contributions they accepted from the developers of property at Tempe Town Toilet]

While critics worry that taxpayers are funding too much of the cost for Town Lake, Hallsted reasons that the revised plan will establish a realistic financing plan for the lake and encourage development that will help pay a greater share of the lake’s annual operations and maintenance costs. [why expect the developers to pay for their costs, when they can give small bribes, oops, I mean small campaign contributions to the Tempe City Council members who will stiff the taxpayers with the bill]

“The key thing,” he said, “is being fair to the citizens, but try to make it more enticing for developers to come in.” [translation - the key to this is SCREWING the taxpayers and forcing them to pay the developers bills]