Tempe seeks settlement to suit By Garin Groff, Tribune May 2, 2006

Tempe is considering giving a developer $7 million, plus a $10 million loan, to settle a lawsuit claiming that city mistakes caused the company to lose tens of millions of dollars.

The settlement would end a dispute over Mondrian, a 523-unit luxury apartment building on Rural Road and the north shore of Tempe Town Lake. Phoenix-based Gray Development Group sued the city in January, claiming the city broke its promise to put the project on a fast track.

Also, the suit said Tempe initially approved, and later rejected, a design key to the projects look and cost structure. The changes delayed the project and boosted costs, though Gray didnt offer specifics in its claim.

On Thursday, the City Council will consider a settlement worth about $7 million, according to a city memo. The deal would have the city:

Pay for up to $3.6 million in improvements to a city park east of Mondrian.

Return development processing fees.

Give Gray a redevelopment site on the southeast corner of Apache Boulevard and McClintock Drive. The property is on the Metro light-rail line.

Loan Gray $10 million, with interest at the citys cost, to be paid back over 15 years.

City officials in January acknowledged that they didnt live up to their promise to quickly review development plans when the project began in 2004. But the city recognized the issue and has since been living up to the agreement, said Chris Anaradian, the citys development services manager.

Contact Garin Groff by email, or phone (480) 898-5938