3-way plan up for vote by council

3-way plan up for vote by council

Sep. 9—North Scottsdale: Brace up for yet more development.

After three years of intense construction by individual developers who have “changed the landscape” on either side of the Loop 101, a team effort is underway.

In a somewhat unusual arrangement, three independent companies — monster global company ASM, Banner Health and De Rito — have entered into a joint development agreement with the city.

It calls for the three developments to build water and sewer lines — with the city to reimburse up to $7 million of the construction costs.

On Tuesday, Sept. 10, Scottsdale City Council will consider the agreement with the three proposed developments, which combine for 85 acres on either side of the Loop 101 at Hayden Road.

The three projects — a $400 million hospital and medical campus, a semiconductor “wafer” manufacturer and an undisclosed corporate development — all need two things to get off the ground:

Water and sewer.

Brian Biesemeyer, the Scottsdale utilities guru who is retiring later this month, will give a presentation, urging approval of a deal “for potable water and sewer infrastructure … between Scottsdale Road and Hayden Road.”

In previous presentations on a sewer line that expanded — in scope and cost — from $12 million to $70 million, Biesemeyer said ASM was one of the developers that would pay for the project.

“The Greenway Hayden Loop Sewer Improvements” project is on the south side of Loop 101, running from Scottsdale Road to Hayden Road.

The Progress asked Biesemeyer if the proposed infrastructure development is part of the $68 million sewer line, or independent of the previously approved line.

He did not respond by press time.

No mention of an expanded water line in the area has been made at council meetings this year.

However, in February, during his first big ask for more sewer-line money, Biesemeyer said proposed developments in this area “are more dense — higher water and sewer demand — than was planned in 2020.

“Some of the developments include Optima, De Rito, Princess Resort, Astra/ASM, Axon, and a new Banner hospital.”

At a recent debate, Mayor David Ortega — who has repeatedly said “we don’t give developers handouts” — said, “We are building the sewer water infrastructure as subscriptions.”

Earlier, at the February council meeting when he asked for the sewer line budget to be tripled (it was later doubled again), Biesemeyer said:

“The majority of the additional costs of this project will be off-set by payback agreements … from developments that will need capacity in the new sewer.”

Ortega’s summary at that meeting: “The developers are going to pay the bill.”

This plan calls for developers to pay up front — but be reimbursed by the city.

‘Three entities’

A Banner press release said it plans a $400 million, multifaceted project on the south side of the Loop 101.

HonorHealth, which has not announced plans for a huge chunk of land on the north side of the freeway, launched a public relations campaign in the wake of Banner purchasing land across the 101 from land HonorHealth bought a year earlier.

Locked in a legal skirmish with HonorHealth over zoning for a portion of its land, Banner said its first phase of construction will be Banner Scottsdale Health Center Plus, an outpatient medical office building.

Meanwhile, Biesemeyer has been in negotiations with ASM — Banner’s next-door neighbor — about how much water its combination of corporate headquarters and lab will use.

De Rito has not announced plans for its land in the area.

According to its website, “De Rito Partners Development is developing 77 acres at the southwest corner of Hayden Road and the 101 freeway in Scottsdale.”

The Scottsdale-based company boasts it has developed “24 first-class retail and auto properties totaling more than 5.3 million square feet and acquired, redeveloped, stabilized and sold 46 retail properties throughout the Greater Phoenix area.”

On Aug. 26, Biesemeyer and Greg Caton, assistant city manager, signed off on a council report on the ASM-Banner-DeRito agreement.

Michael Pacheco, listed as vice president of Hayden Loop 101 Investors (named throughout as “Developer”), signed a draft of the agreement but did not date his digital signature.

According to the agreement, “The subject property is owned by the following three entities: Banner Health, ASM America and Developer.

“Developer, for itself and on behalf of the other Owners, has been engaged to serve as the “developer” of certain horizontal infrastructure work.”

De Rito Partners and VanTrust Real Estate — which Pacheco lists as his employer on LinkedIn — are also part of the agreement.

What’s in it for the city?

Biesemeyer likely will delve into how the development plan will benefit Scottsdale.

The resolution to be considered states: “Operational efficiencies and strategic resource allocation of city resources can be best achieved by entering into an agreement for the private construction of a portion of (the Greenway sewer line) as well as other water and sewer infrastructure that will serve the subject property and other developments in the Crossroads East area.”

According to the agenda background information, “Upon Council approval, the city will have authority to enter into a reimbursement agreement with private developer (Hayden Loop 101 Investors, LLC, an Arizona limited liability company) … for reimbursement.”

The city “has oversizing funds to be used for the reimbursement of water and wastewater infrastructure,” according to a draft resolution.”

Illustrations in the agenda packet show the “wastewater project” as identical to the in-process sewer line on the south side of the Loop 101 that Biesemeyer previously presented to City Council.

The “depiction of the water project” slide in the packet shows proposed lines on both the north and south sides of the freeway — though most of the lines appear to be on the south side.

The reimbursement plan calls for the developer to “bear the initial cost to construct the projects.”

The city’s “total maximum reimbursement” is $6.1 million for the water line and $960,000 for the sewer line.

The developer has three years to complete construction — or before the issuance of a certificate of occupancy for any building in the development, whichever comes first.

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