Marana has put a firm $18.2 million price tag on the construction cost of its new town hall in north Marana, but it's still a crap shoot as to how much the off-site infrastructure and improvements will cost and whether a private sector commercial gamble will pay off.
At its Sept. 16 meeting, the Marana Town Council voted unanimously, with Vice Mayor Herb Kai absent, to approve a contract with D.L. Withers Construction, Inc. to build the new town hall near Lon Adams and Barnett roads.
Although planners had forecast a cost of between $14 million and $15.1 million late last year, design changes in the building had raised the overall construction costs.
Development Services Director Jim DeGrood told the council that the project's cost was "consistent with the budget approved last summer."
The town has yet to determine a final cost for the development of off-site roads, sewers, utilities, sidewalks and other infrastructure needs for the town hall complex planning area.
The 20 acres surrounding the town hall are being improved and reconfigured for uses that include a Northwest Fire and Rescue District station, a low income apartment complex and residential and commercial developments built by the private sector.
Morris Reyna, Marana's construction manager overseeing the off-site projects said an estimate is expected next month.
A report developed in May saw the cost of the off-site projects rise $2.8 million from its original estimate to $9.6 million.
Since that jump, the Northwest Fire District decided last month to shoulder the $2.6 million cost of the fire station itself rather than have Marana sell bonds for the project that would in turn be repaid by the district.
And in another move that should lower the final costs, planners have decided to relocate but leave electrical transmission lines above ground, rather than bury them.
According to a monthly construction update provided to the town council Sept. 16, planners believe they can save another $600,000 by leaving the power lines above ground.
At the same Sept. 16 meeting, the council approved a land swap with the partnership that owns the land surrounding the town complex and that will benefit from the off-site infrastructure improvements.
Under terms of the deal, Reyher Partnership and Marana 348 Limited Partnership will give the town 6.9 acres of land plus 2.57 acres of easement to square off the town hall complex. The landowners will also give one acre of land to the Northwest Fire District and pay $441,837 as part of subdivision assurances for residential development that can be refunded in the future.
In exchange, the partnerships will receive a little more than half an acre of land north of the town hall for commercial use, an agreement that the roads and infrastructure will be in place by the end of 2005, and the restriction of about 26 acres of land they own around the town hall for commercial use only.
The two partnerships have not filed paperwork with the Arizona Corporation Commission that would identify their members in detail, but Southwest Value Partners Manager Greg Wexler said the partnerships consist of himself, other officers of SVP and Marana resident Jay Reyher, whose home on Grier Road was bulldozed to make way for the planned Marana Main Street.
The Marana 348 Partnership sold the current town hall property, 13251 N. Lon Adams Drive, to Marana for about $250,000 and has owned the land surrounding the new 15.9-acre town hall site for 20 years, Wexler said.
SVP has been the engine behind much of Continental Ranch's residential boom, and developed most of the commercial strips along Cortaro and the west side of Interstate 10.
The project is in its early stage, and the partners have so far only identified Stockman's Bank as a prospective buyer in the town hall area, Wexler said. They're gambling the land trades and commercial ventures will pay off down the road.
"I'll tell you in a few years whether I got the short end of the stick or not. It's kind of a crap shoot. If the town center comes up and other businesses want to come over there, I win. If it stays the same as it is, I lose. If it attracts business, which is what we're all hoping for, then everybody wins," Wexler said.
In addition to the commercial property surrounding the new town hall, the partnerships plan to develop about 41 acres of residential property surrounding the town hall complex.
"It will be a housing product that will be a little denser than what you see in most places, but something with a little more Old Pueblo character. We'll probably get a boutique builder or a larger national builder that will build in a boutique fashion," Wexler said.
The landowners are more confident in being able to move the residential properties than the commercial land and hope to enter into some type of partnership with the town to help make the businesses viable.
"The commercial (development) is just going on faith with the town and thinking at some point we'll do some partnershipping," Wexler said. "I'm looking at other cities in the country and looking at something creative because I'm thinking we're going to have to subsidize the first few deals in there."
Marana Town Manager Mike Reuwsaat said that, while the town is open to "partnerships" with the landowners, directly subsidizing businesses "isn't going to happen" at the town hall complex.
"There already is a partnership in place," Reuwsaat said. "The town is building the main street, sidewalks, lighting and stuff like that. There already is value going to the properties on either side of the complex. We had to build the road, and I wouldn't call it a subsidy, but it is a benefit and it is one of the reasons that it works for both parties. We needed a road and we also needed to retain space for commercial, so it worked both ways."