Mesa council hears Cul De Sac plan for Site 17; staff directed to finish purchase and development agreements

Cul De Sac, a developer best known for its Tempe project, presented a multi‑phase plan March 6 to redevelop Site 17 — a roughly 25‑acre city‑owned parcel at the southwest corner of University Drive and Mesa Drive — and Mesa City Council directed staff to finish the purchase and development agreements and bring them back to council for approval this spring.

The project team described a mixed‑use plan that would build as many as 1,000 residential units across the full Site 17 project with 25,000–50,000 square feet of retail and roughly the same amount for resident amenities. Phase 1 would include 40 for‑sale townhomes adjacent to the Wilbur neighborhood, about 800–1,000 parking spaces across the site and publicly accessible open space. The developer and staff said the approximate purchase price shown for phase 1 is $2,740,000 (amount will change as parcel boundaries are finalized) and that two independent appraisals of the full site produced different numbers used in negotiation.

Why it matters: Site 17 has been under city discussion and multiple solicitation efforts for decades. The council and staff framed the proposal as an opportunity to add for‑sale housing downtown, activate retail, and fund public improvements, while emphasizing protections for the adjacent historic neighborhood and a multi‑stage sale structure intended to reduce the city’s financial risk.

Cul De Sac cofounder Ryan Johnson told council the developer’s approach emphasizes “community, mobility, and open space,” describing how the company’s Tempe project used live‑work retail and plazas to attract both residents and visitors. City staff said the proposal is a three‑phase purchase and development structure: the city would sell parcels in stages and require entitlements and building permits for each phase before closing on the land. Under terms described in the presentation, Cul De Sac would have about 24 months after executing a phase purchase agreement to close on the land and then 12 months after closing to commence construction on that phase.

Key deal points and conditions discussed

- Phasing and purchase price: Staff said the phase‑1 purchase price is currently estimated at about $2.74 million; final numbers will be based on parcel boundaries and an agreed appraisal method (staff proposed using one of the existing appraisals or a blend with a CPI adjustment for later phases).

- Minimum project commitments: The development agreement would require a minimum of 1,000 units across the entire site, buildings of two to five stories, at least 25,000 square feet of commercial retail and 25,000 square feet of amenity space as a baseline, and public open space and streetscape improvements.

- For‑sale housing: Phase 1 would feature 40 fee‑simple for‑sale two‑ and three‑bedroom townhomes with dedicated parking. Future phases could include for‑rent studios through three‑bedroom units; Cul De Sac said early phases are designed so they could work with or without an institutional partner such as ASU.

- Public improvements and reimbursements: For phase 1, Cul De Sac requested that 100% of the land sale proceeds for that parcel (about $2.74 million as estimated) be reinvested into public improvements on the project as reimbursement. Staff said the city intends those reinvestments to fund enhanced public improvements — streetscapes, parks, open space and mobility features — and that the $2.74 million would represent roughly 35–40% of the developer’s rough infrastructure cost estimate for phase 1. Staff also said future phases would likely carry lower reimbursement percentages (staff noted a target of about 30% for later phases and described an overall phased averaging approach in negotiations).

- Options and timing: The draft structure gives the developer an option to exercise a right to acquire future phases at the time of phase‑1 closing; exercising the option would require a $100,000 option payment and begin a 36‑month entitlement/close window for the subsequent phase. Staff said the city will require development agreements and entitlements, and will not close sale parcels before the developer has entitlements and permits for each phase.

- Entitlements and code: Staff reminded council that Site 17 was not placed in the city’s form‑based code when the code was adopted; staff said the city expects to use a PAD (planned area development) approach tied to site‑specific transects so the entitlement process will be required regardless of the mechanism.

- Parking and neighborhood protections: Cul De Sac committed to at least one parking space per unit in phase 1 and a minimum of roughly 800 spaces across the site; staff and council discussed on‑street parking enforcement mechanisms and expansion of downtown parking management to limit spillover into surrounding neighborhoods.

- ASU interest: Staff said discussions with Arizona State University are at an early stage; the development team and staff designed phase 2 so it could accommodate an academic partner if talks progress, but no agreement with ASU was presented or promised.

Council reaction and next steps

Council members asked for clarification on appraisals, phase boundaries, timing and how much of the land sale proceeds would be devoted to public improvements. Several members praised Cul De Sac’s Tempe project as a model for neighborhood activation and expressed support for the city taking steps to protect its assets while encouraging the for‑sale downtown housing product.

Council did not vote on a purchase or development agreement at the March 6 meeting. Instead, with no recorded opposition, council provided direction to staff to finalize negotiations and return the purchase agreement and development agreement for council consideration this spring.

Quotes from the meeting

“We prioritize community, mobility, and open space,” Ryan Johnson said in his presentation about the developer’s approach.

“This has been a property in the city that’s been under lots of discussion,” City Manager Chris Brady said while outlining the site’s long history and earlier concepts.

Clarifying details recorded from the meeting

- Site size: approximately 25 gross acres (city‑owned Site 17). - Appraisals: staff referenced two appraisals for the full site (one shown in staff material at about $11.2 million and the developer appraisal referenced during discussion; phase and final values to be refined). - Phase 1 purchase price (estimate shown in presentation): $2,740,000 (will be refined based on final parcel boundaries and agreed appraisal method). - Phase timing: 24 months to close after executing a phase purchase agreement; 12 months after closing to commence construction (as drafted in staff presentation). - Minimum commitments: 1,000 total units across site; 40 for‑sale townhomes in phase 1; 25,000 sq ft minimum retail and 25,000 sq ft minimum amenity space across site; buildings 2–5 stories; 800–1,000 parking spaces minimum across the site. - Public improvement reimbursement: phase 1 requested 100% of phase 1 land sale proceeds (~$2.74M) be used as reimbursement for enhanced public improvements (staff estimated this to represent roughly 35–40% of the developer’s early infrastructure estimate for phase 1); staff proposed lower reimbursement percentages for later phases (approximately 30%). - Option payment for phase 2: $100,000 (to reserve phase 2 at phase‑1 closing under current draft).

Proper names and entities mentioned

- Mesa (city) - Cul De Sac (developer; Cul De Sac Tempe flagship project referenced) - Transform 17 (guiding principles used in the solicitation process) - Wilbur neighborhood (historic single‑family area adjacent to Site 17) - Arizona State University (ASU) - Delta Hotel

Community relevance

- Geographies affected: downtown Mesa; Wilbur historic neighborhood; southwest corner of University Drive and Mesa Drive. - Impact groups: potential homebuyers (for‑sale townhomes), renters and future residents, nearby neighborhood residents, local small businesses and retail operators. - Funding sources discussed: land sale proceeds, potential construction sales tax reimbursements (non‑dedicated portion), city capital resources to be aligned with developer reimbursements.

Meeting context

- Engagement level: many council members participated; the Site 17 presentation and business‑term discussion occupied the majority of the first agenda item and drew extensive council questions and staff responses. - Implementation risk: medium (project contingent on entitlements, building permits, developer financing and phased performance benchmarks). - History: Site 17 has been under city consideration for decades; staff referenced prior proposals and the Transform 17 RFP (council direction to proceed with Cul De Sac occurred in October before the March presentation).

Searchable tags:["Site 17","Cul De Sac","downtown Mesa","development agreement","purchase agreement","for‑sale housing","public improvements","ASU"]

discussion_decision:{"discussion_points":["Multi‑phase structure to limit city risk","appraisals and purchase price differences","public improvement reimbursement requested for phase 1","entitlement process required; site excluded from form‑based code"],"directions":["Staff to finalize purchase and development agreements and return to council for approval this spring","Staff to require entitlements and building permits for each phase before closing"],"decisions":[]}

actions:[{"kind":"other","motion":"Council provided direction to staff to finalize negotiations on the purchase agreement and development agreement for Site 17 (Cul De Sac) and return the agreements to council for approval this spring; no formal vote on a purchase or sale was taken at the March 6 meeting.","mover":null,"second":null,"vote_record":[],"tally":{},"legal_threshold":{},"outcome":"consensus_note","notes":"Direction to finalize documents; no execution of agreements at this meeting. Phase 1 purchase estimate shown as $2,740,000 (to be refined)."}],