Sam's Club builders sue Tucson over canceled land sale

Council scrapped sale of 22 acres at Irvington and I-19
2013-04-19T00:00:00Z Sam's Club builders sue Tucson over canceled land saleDarren DaRonco Arizona Daily Star Arizona Daily Star
April 19, 2013 12:00 am  • 

The developers who wanted to build a now-scuttled south-side Sam's Club have sued the city for reneging on a deal to sell them the land for the project.

Irvington Interstate Partners LLC is seeking unspecified damages over a deal the Tucson City Council scrapped in February.

The council put the 22-acre site on West Irvington Road at Interstate 19 back out for a public rebid after realizing there was a pre-existing restriction on commercial development there, and the Sam's Club developer determined the planned store couldn't be built under 100,000 square feet.

The suit accuses the city of misrepresentation, withholding vital information about the property and more.

City Attorney Mike Rankin said the city intends to fight the claims.

Representatives from Irvington Interstate Partners could not be reached for comment.

The city was faced with two unpalatable options when it decided to nix the Sam's Club deal, Councilman Steve Kozachik said, since pushing forward with the big-box store project would likely have triggered a lawsuit from the owners of the Tucson Spectrum shopping center across the street, seeking to enforce the restrictions.

"We were told that both sides in the dispute had indicated they'd sue," Kozachik said. "So being in a double bind, I think the correct decision was to reissue the RFP and see if the market improvement yielded a more favorable result for the taxpayers. That's the best we could do given the set of facts we faced."

Council members remain confident in their vote.

"I feel comfortable with the direction we've given to staff on this land," said Councilwoman Regina Romero. "Putting out another (bid solicitation) was proper, and it makes sense."

The city initially agreed to sell the site for a Sam's Club in the summer of 2011.

Shortly after the deal became public, Tucson Spectrum's then-owner, Scottsdale-based Barclay Group, filed a $112 million claim against the city for breach of contract.

One of the incentives the city gave Barclay to get it to build the Spectrum was a promise to prevent retail development on the city property across the street until 2017.

In response to the claim, the council voided the Sam's Club deal. That led to the Sam's Club developer filing its own $13 million claim, a precursor to the just-filed lawsuit.

In October, the council reopened negotiations with the Sam's Club developer but added some stipulations, including one that required the developer to find a way to build under 100,000 square feet in compliance with the city's big-box ordinance. If that couldn't happen, the council would jettison the deal.

The Sam's Club deal would have brought in $4 million for the land sale, and an estimated $1.5 million to $2 million a year in sales taxes.

Contact reporter Darren DaRonco at 573-4243 or ddaronco@azstarnet.com

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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