The design of the lake and the water source have evolved as costs go up. The lake will be created by two 300-foot-long inflatable dams; one east of Hardy Drive and the other near McClintock Drive. The dams would be deflated during times of high river flows.

The lake would primarily be filled with water from Salt River Project canals. The city would repay SRP by pumping treated sewage water into the aquifer. Water that seeps through the bottom of the lake will be captured from wells and circulated back into the 180-acre lake. The electricity cost for the circulation system is estimated at $500,000 a year.

Additional water to replace evaporation losses--estimated at up to four million gallons per day in the summer--will come from polluted groundwater that will be treated before being dumped into the lake, says deputy community development director Dave Fackler.

The polluted water will be drawn from the Indian Bend Superfund site, Fackler says. The pollution was caused, in part, by chemicals generated by the Motorola plant in Scottsdale. The chemicals will be separated from the water through air-strippers, which essentially cause the chemicals to evaporate into the air.

The next step in the Rio Salado financing plan calls for potential developers to give their views of the plan. John Benton, a Tempe developer who has signed a development commitment with the city for a $500 million mixed-use project in Rio Salado, says the city's financing plan looks good. Benton plans to build apartments and condominiums in the first phase of his project.

Even though Tempe is fronting the construction cost of the $40 million lake to attract top developers--and plans special assessments on development--the city also is prepared to offer sales- and property-tax abatements to lure builders, says Giuliano.

"Those are rather routine economic development tools," Giuliano says.
Any tax rebates offered to developers will lengthen the time taxpayers would cover bond repayment and operating cost of the lake.

The first-term mayor downplays any economic risk to the city. He says the bonds won't be sold until developers commit to enough building to generate at least $1.2 million a year in tax revenue.

"I would say this is a low-risk venture," Giuliano says.
But longtime council critic Art Jacobs says the project is certain to increase the burden on Tempe taxpayers. Jacobs, a retired Department of Defense budget analyst, says that in addition to the boost in Tempe's sales tax (which applies to food), Tempe's property taxes have risen steadily over the past seven years. Jacobs also questions the city's motivation for the 1993 sales-tax boost.

"I'm really beginning to believe the sales-tax increase was a hoax to get money to fund Rio Salado," he says.

Jacobs says the city shouldn't be involved in Rio Salado development.
"If Rio Salado is as good as the city says, then the developers will build it," Jacobs says.

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