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.

Zoning questions, then, have become more urgent and controversial as the city's land squeeze has tightened. City officials like Day must work to balance commercial and residential uses. More than 40 percent of the city's general fund comes from local sales taxes. Houses cost the city more for services than the revenue their property taxes produce.

It isn't difficult to imagine what kind of development the city wants to cultivate.

"We need the right kinds of development," Day says. "We're running out of land. We have to plan for the city's future revenue needs."

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Besides tiny Guadalupe to its west, Tempe is the only city in the state that has all its boundaries determined by other entities: Scottsdale and the Salt River Pima-Maricopa Indian Community to the north, Phoenix to the west, Chandler to the south and Mesa to the east.

To beef up the tax base, the city has two main projects planned: the Rio Salado, north of downtown along the Salt River, which officials hope will become a retail and commercial tax-generating plum à la San Antonio's River Walk, and the Great Mall, which would generate millions of dollars a year in sales taxes.

It is this zeal for sales-tax revenue that, Gilbert claims, drove Tempe officials to break the law, hoping to beat Mills in the mall race.

Mills' suit appears to have merit; Tempe's general plan says the southeast corner of I10 and the Superstition Freeway is to include amixture of owner-occupied residential, retail, office and industrial properties. Theplan for the Great Mall, the suit points out, does not contain any provisions for owner-occupied residential development.

Public documents show that the city's planning staff recognized the need for a general plan amendment for the proposed outlet mall.

"Normally, a zoning change of this nature would trigger a need to modify General Plan 2000 if one of the uses was not owner-occupied residential," a staff report says. No such amendment was made.

Also, the suit claims that, rather than having zoning variances approved by the city's Board of Adjustment, Tempe occasionally, "in connection with certain favored projects," allows such rulings to be made by the city council, acting as the Board of Adjustment. That is what the city did with the Great Mall.

Mills contends that such a move by the Tempe City Council was illegal. Whether it was illegal, the council's action illustrates how loyalties and principles can become scrambled in a fight as acrimonious as this one.

When Gilbert says the Tempe City Council sometimes makes zoning decisions in place of the Board of Adjustment, it's because he knows. Gilbert has represented multiple clients in such actions before the city, which Petrie points out with glee.

"He's doing what he has to do," Petrie says. "I understand it. But for Mills to be going around saying that we're hypocrites is absurd. We are no more hypocritical than they are."

Mills has fought the Great Mall with some other fairly unconventional and heavy-handed tactics. After it was sued by PDK-Taubman, and then countersued, the company commissioned Rust Environment and Infrastructure, a national engineering firm, to execute a traffic engineering study ofthe PDK-Taubman site. The study concluded that the Great Mall would create a "traffic nightmare" on Baseline Road and at the I10/Baseline interchange.

Mills then used the traffic study as the linchpin of a public relations attack.

Cardboard leaflets with covers reading, "What's the last thing you want popping up in your neighborhood?" were left hanging in plastic bags from the doorknobs of thousands of Tempe homes. When residents opened the leaflets, photos of a gridlocked freeway popped up, along with the ominous news that the Great Mall would create the "Super Bowl of traffic jams."

The leaflet went on to say that the Great Mall's developers, "who have no experience building malls of this magnitude--are in over their heads ... especially evidenced by their inability to make realistic traffic projections."

Mills' claim in the flier that PDK and Taubman have never built a mall "of this magnitude" is incorrect. PDK's Great Mall of the Bay Area in California is approximately 1.5 million square feet, generating around $4million in sales-tax revenues every year. Both those numbers are slightly larger than what the developers are predicting from the Great Mall in Tempe.

Also, Petrie says, his opponents' traffic study is incorrect and points out that Mills approached the owners of the Great Mall site before settling on the one in Chandler. Though Mills says it was initially attracted to the Great Mall site because of the heavy nearby traffic (the intersection of I10 and the Superstition Freeway is the busiest in the state), access concerns caused it to look elsewhere.

Petrie attributes Mills' actions to jealousy.
"We have a better site than they do," he says. "It's that simple. They looked at it themselves, didn't want to spend the money on a site this good and now are saying it's bad. That's ridiculous."

Among the most troubling questions raised by the great mall race are these: At what point does healthy business competition become unhealthy? Are cities willing to go so far to secure sales-tax revenues that they damage themselves in the long run? What messages do conflicts such as these send toother companies interested in building or locating in the Valley?

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