Arizona State University released a harsh statement on Friday night about the end of negotiations with USA Place, essentially accusing developers of lying.
As we reported on Thursday, plans collapsed for the $350-million-plus downtown project that would have brought a hotel, conference center and the Colorado-based USA Basketball organization to Tempe. The project was announced to great fanfare in July of 2013, promoted by sports mogul Jerry Colangelo, chair of USA Basketball.
Tonight, ASU confirmed the split in a lengthy, interesting statement that reveals the frustration felt by university officials about alleged broken promises.
See below for ASU's statement in full:
"Arizona State University has been more than generous in granting multiple extensions to deadlines to USA Place in its efforts to secure this ambitious project.
"Arizona State University and USA Place entered into an option to lease dated January 7, 2014 granting to USA Place a series of options to lease the property. USA Place missed its very first closing deadline of February 28, 2014, but asked for an extension until May but couldn't meet that deadline either, and the option to lease terminated. Although Arizona State University had no obligation to continue to work with USA Place after that termination, ASU agreed to enter into an exclusive negotiating period with USA Place, and thereafter extended the exclusive negotiating period on several occasions - all at the request of USA Place.
"Arizona State University has consistently required throughout the exclusive negotiating period that USA Place demonstrate its commitment to the transaction by making a substantial deposit to reinstate the option to lease. USA Place repeatedly pledged to provide a deposit to secure its commitments but never did so.
"USA Place failed to deposit the required deposit in the escrow account. Instead, USA Place's potential equity partner deposited funds in an unrelated escrow account, which was under the unilateral control of that equity partner. Arizona State University had no access or right to those funds. Any suggestion that this escrow deposit satisfied USA Place's obligations is incorrect.
"Arizona State University remains committed to developing a project on the property at Mill Avenue and University Drive that will harness the potential of this site for the University and Tempe communities, but the University must now look for alternative developers to advance the project."
The project's development team includes: Susan Eastridge, CEO of Concord Eastridge; Michael Hallmark, principal of Future Cities; Robert Harris, CEO of Harris Sports & Entertainment; and Sean Duncan, a former senior designer with The Jerde Partnership.
This week, through a public-relations firm, USA Place told New Times that it had "made the required deposit" of $1 million in escrow for the project. As ASU's statement indicates, that wasn't quite what happened.
USA Place also told New Times it was negotiating to put another $4 million in escrow to maintain dibs for the 10.7-acre parcel on the southeast corner of University Drive and Mill Avenue. Despite a statement by ASU on Thursday that it would seek other options, we still wondered if the two parties would resolve their issues.
This latest statement by ASU, issued at 8:36 p.m., seems to put the kibosh on any future dealings with USA Place.
The ultra-dense project seemed rather unrealistic to many observers, in part because it predicted tens of thousands of visitors going to basketball events, conferences, the hotel, apartments and retail shops in an area already socked with traffic and parking problems.
USA Place was one of several plans that failed to come to fruition for that property in the past 20 years or so, and, according to the Phoenix Business Journal, at least the second time boosters have tried to get USA Basketball to move from Colorado Springs to Arizona.
The property now consists of mostly surface parking, a sandwich shop, plus several old buildings from the former strip mall located there, some of which are being used as ASU classrooms. The popular Chili's location on the corner closed last year in anticipation of the development. Looks like the corner will remain rather drab and unproductive for some time to come.
Got a tip? Send it to: Ray Stern.
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