OUTLETS of Hostility

Egoconsumed developers, lobbyists, flacks, detectives and lawyers generate fear and loathing a la Barbarians at the Gate. The reason? Two proposed outlet malls the Valley doesn't really need.

Which developer that will be is still anybody's guess. So is what this slugfest may mean for Arizona's business future.oRULEoThe ferocity of the battle of the Valley outlet malls cannot be understood without a bit of history.

Between them, PDK and Taubman own and run dozens of retail centers in other parts of the country. Neither has ever operated an off-price mall before. Both are hell-bent on proving they are up to the task.

Mills, with the construction and operation of four outlet malls under its belt, is the king of this kind of development. Like any king, it has less to prove in the Arizona competition, but more to lose.

Two of the developers have competed for the same turf in the past, in the construction of a conventional mall in the Milpitas, California, area near San Jose. PDK won out when Mills decided against building there.

PDK says Mills showed up like a new tomcat on the block, made a lot of noise about moving in, then slunk away.

Mills claims it didn't make it onto the scene until after PDK already had broken ground, and it was unable to find the chunk of land it needed for its own, bigger project. But, the company hastens to add, many tenants wanted to be a part of the Mills project--and only ended up in the Great Mall by default.

This history has obviously seeped into the Arizona outlet contest. The loathing representatives of the competing development groups feel for their counterparts is evident in their voices.

Paul Gilbert doesn't make much of an attempt to hide his feelings, either.
The tall, plainspoken, 50ish attorney is considered the dean of the Valley zoning trade, and his A-list of clients reflects his status: Hehas represented development colossus DelWebb, Valley newcomer Hard Rock Cafe, and convicted swindler/Phoenician resort developer Charles Keating.

Landmark Land Company can certainly attest to his negotiation skills.
Through Gilbert's efforts, Landmark gained approval of the vehemently antisprawl environmental group Sonoran North for a new 5,500-home planned community in the northeast Phoenix desert.

Among the latest entries on his client list is the developer of the Chandler mall, the Mills Corporation.

For all his experience handling high-dollar, high-stakes development, Gilbert says nothing has prepared him for the fight he finds himself in now.

What he sees happening, he says, is this: PDK and Taubman, late to the table with plans for an off-price mall in Tempe, are running a full-court press on Mills and the City of Chandler to stall construction of Chandler Mills. The developers will stop at nothing, Gilbert says, to stymie Mills' plans--something that has been admitted by Taubman's own attorneys.

In July, PDK and Taubman filed a lawsuit in Maricopa County Superior Court, alleging that the development agreement between Mills and Chandler violates state and federal air-quality laws and the Arizona Constitution. The analyses Chandler used to determine the effect mall traffic would have on air quality in the area were invalid, the suit says.

In addition, Taubman's attorneys claim that the improvements the city has agreed tomake to I10 at Ray Road are not consistent with requirements of the Arizona Department of Transportation and the U.S. Department of Transportation.

The suit asks that the court nullify Chandler's development agreement with Mills--effectively putting the Chandler Mills project back at square one, and sending a message to unsigned tenants that if they want to open anytime soon, they'd be wise to commit to space in the Great Mall.

"They're coming in and raising environmental questions," Gilbert says. "Their motivation is to slow our development down. They don't care about environmental concerns.

"What they're doing is very hypocritical."
He appears to have a point.
The traffic study PDK and Taubman used for their own project in Tempe is actually several years old--and was developed for a different mall that had previously been planned for their site. PDK and Taubman appear to have simply attached a new executive summary to the report and passed it off as current.

The development originally planned for the site was to be a conventional mall, which would have created different traffic patterns than an outlet mall. For example, ordinary mall traffic closely follows commuter patterns; outlet-mall traffic does not.

Despite the deficiencies in the traffic planning for the Tempe outlet mall, PDK and Taubman have gone to great efforts to discredit traffic arrangements for the Chandler mall proposal.

Earlier this summer, the Great Mall developers tried to convince the Maricopa Association of Governments to remove Chandler's plan for $1.6 million of highway improvements at I10 and Ray Road in Chandler from the state transportation program.

PDK and Taubman told MAG that Chandler's traffic studies were "inherently flawed" and failed to look at long-term safety and air-quality impacts. Also, the developers argued that it would cost more than the $1.6million Chandler was offering to widen the Ray Road off-ramp and overpass leading to the mall.

MAG didn't listen.
PDK and Taubman did not let that defeat deter them.
They hired Valley Yberlobbyist Larry Landry, who has worked for the group that tried last year to pass Proposition 400, a new freeway tax, and for the paint industry, which would like to avoid bans on selling spray paint to teenagers.

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