http://www.eastvalleytribune.com/ind...dest=STY-67453
Tempe nears deal on historic mill
By Garin Groff, Tribune
June 10, 2006
Tempe is on the brink of settling a lawsuit with a developer over the Hayden Flour Mill’s development — paving the way for progress after years of delays and fighting over the historic site.
The proposed settlement would end a $42 million suit that MCW Holdings filed against Tempe claiming lost profits. The Tempe-based developer sued in 2004, a year after Tempe bought the property from MCW because it failed to meet a city deadline to begin work.
The deal would essentially bring Tempe and MCW to where they were in 2003, but it offers a new deadline to start work.
Tempe Mayor Hugh Hallman acknowledged the deal — which the City Council will consider Thursday — doesn’t guarantee progress. But he said the draft settlement offers the best shot since the city launched mill redevelopment efforts in the 1990s.
“We’re as close to actually getting a project built as we’ve ever been,” Hallman said.
MCW will have four months to submit plans, and a year after that to get construction permits. If the developer doesn’t meet the deadline, the city will keep the property.
The settlement also would resolve a dispute the city has with another MCW development, the Orchidhouse at the Brickyard on Mill Avenue.
Key points of the deal include:
• Tempe will sell the site to MCW for $7.4 million but credit the developer $7.1 million for public amenities like parking, a trailhead for Hayden Butte and exhibits of Hohokam artifacts on the site. The city will cap its payment at $7.1 million regardless of cost overruns, which is significant given that costs have risen substantially in recent years.
• Tempe will pay $6 million over 15 years to offset preservation costs for the mill and silos.
• MCW is limited to 469,160 square feet of buildings.
• The project will include housing, offices, retail space and the potential for a hotel.
• MCW will drop its suit against the city, which will drop counterclaims against the developer.
• MCW will pay about $662,000 plus interest for city office improvements at the Orchidhouse.
The mill redevelopment would turn a barren part of downtown into a useful area and link the historic downtown to Town Lake.
Business owners, history buffs and downtown visitors also are eager to see the deteriorating mill restored. The mill was the first business in what became Tempe and was once one of the most significant enterprises in the area. An adobe mill was built in 1874 and later destroyed in a fire. The current mill dates to 1918, while the taller silos are 50 years old.
An MCW official did not return a call for comment Friday.
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