The Oro Valley Town Council, following admonitions from Town Attorney Mark Langlitz at its June 23 meeting, unanimously, though grudgingly, approved Bourne Properties' plan for the development of Oracle Crossings, a controversial 241,629-square-foot shopping center at the southwest corner of Oracle and Magee roads.
The town is the target of a lawsuit filed May 6 by the citizens referendum group "Stop OV Outrageous Giveaways" after Oro Valley refused to accept petitions to refer to voters a $6.5 million economic incentive agreement with the center's developer, BP Magee LLC.
The agreement would give the developer 46 percent of the sales tax revenues generated over 10 years. Over the next 20 years, the center is expected to generate $2.5 billion in retail sales and $37.3 million in sales tax revenues for Oro Valley.
The group is also trying to halt an agreement for returning $23.2 million in projected sales tax revenues to Phoenix-based Vestar Development Co. The figure represents 45 to 50 percent of the sales tax to be generated over 16 years from a proposed 900,000 square-foot regional power and entertainment center known as the Oro Valley Marketplace at Oracle and Tangerine roads.
The town has received a legal opinion from the law firm of DeConcini, McDonald, Yetwin & Lacy indicating that because Oro Valley has an economic incentive agreement policy that specifically allows rebates to attract development, any subsequent agreements based on that document are merely "administrative" and not subject to a public vote by referendum.
Besides the lawsuit challenging the referendum petition referral, the Oracle Crossings proposal has also generated a great deal of opposition from Northern Avenue residents on the west side of the development who say their views of the Santa Catalina Mountains will be seriously impaired.
Langlitz told the council that in reviewing the Bourne development plan it must consider only whether that plan complies with the terms of a March 2003 preannexation agreement between the town and the developer, standards imposed by Pima County before that agreement and conditions imposed by translational zoning following the town's April 2003 annexation of the nearly 30-acre site, part of an annexation that took in 640 acres.
"To the extent that the development plan is in compliance with a conceptual site plan, the developer has a right to develop in accordance with that plan," Langlitz said.
Failure to approve the development plan in that light, Langlitz told the council, could be constituted as denial of the developer's due process and add to the town's potential legal problems.
Only about a half dozen people in the audience spoke in regard to the development plan, all in opposition. The number would have been double had not others yielded their time to allow Steve Plevel, a resident in the area for more than 30 years, to speak for them.
How the council votes in this matter, Plevel told the council, will set a precedent as to how the town will grow and how the town responds to what people want. He noted that this is the fourth time residents have had to confront the threat of development in the area and that in the past, compromises by residents have always meant "we give up everything and the developer gets all they want."
What residents want most, Plevel said, is to preserve at least 65 to 70 percent of their mountain views, something that could be accomplished by reducing the height of the buildings to 18 feet on the west side where the backs of the buildings are facing neighbors. Neighbors also sought assurances that potential flooding problems in the area would not be exacerbated by the development.
Dennis St. John, Bourne Properties project manager, said he could provide no guarantees regarding the request for an 18-foot height limit. That would depend on the amount of building space required by the tenant, he said.
The slew of conditions imposed on the development plan include building height limits of 22 feet on the west side, down from a height of between 24 feet and 27 feet that the county would have allowed, construction of a 10-foot wall along Northern, scrubbers to deal with odors coming from kitchens in the center's restaurants, cleanup of the right-of-way along Northern, landscaping with mature trees, creation of a five-foot wide, hard surface walking path, the shifting of mechanical equipment to buildings further east, presentations by the town and development engineers to residents to explain what will be done to ameliorate flooding problems and an agreement between both parties on wall colors.
Neighbors and the developer are also to come to an agreement on promises made by the developer and all conditions imposed are to be written in as part of the development plan.
As much as the council would have preferred to reduce heights further, it just couldn't be done because of the hands-off approach the council was directed to take, Councilmember Helen Dankwerth said in explaining her vote in support.
Developer representatives told the council its approval was necessary to begin grading by October and get tenants in by September 2005 so the town could be collecting revenues as soon as possible.
Bourne Properties representatives said that if voters were to eventually reject the incentive deal and sales tax revenues couldn't be used to help finance its completion, it would have significant impact, particularly in seeking financing for the $3 million worth of infrastructure costs the project will require.
The developer also must still obtain rezoning approval to switch from office to retail uses on the southern portion of the property .
In other action, the council, at the request of Town Manager Chuck Sweet, continued until July 7 discussion of cuts totaling at least $957,000 in his proposed nearly $106 million budget for the 2004-2005 fiscal year.
Sweet has been directed to come up with a balanced budget and stop covering deficits from a contingency fund that has continued to decline for the past three years. The tentative budget sets the town's spending limits. Final adoption of the budget is scheduled for Aug. 4.
The council, with Councilmember Paula Abbott absent, also approved a development plan for a 4,400 square-foot Bank of America branch in the Safeway Vistoso Plaza at the northeast corner of Tangerine Road and Rancho Vistoso Boulevard and a preliminary plat for the construction of 82 homes on nearly 307 acres in the Stone Canyon area of Rancho Vistoso north of Tortolita Mountain Circle. Conditions of the approval include deeding to the town at the time the final plat is recorded 65 acres in Neighborhood 11, 120 acres of the former ITC property in Neighborhood 12, 77 acres of Honey Bee Park and 98 acres of the Honey Bee Wash common area.