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Woori Enterprise, Inc. of Chandler, AZ (Kevin Suk Yoon, director) purchased the Holiday Inn Express Tucson Airport at 2548 E Medina Rd. for[mepr-show rules=”58038″]$5.15 million ($44,000 per room). The seller, Lyon Parks, Inc. (Debbie Miller, VP) of Bloomington, IL acquired the property in 2011 as part of a trustee sale.

The 3-story, 52,294 sq. ft. hotel sits on a 2.65 acre lot, and houses 60 one-bed rooms, 38 double-bed rooms, and 19 suites for a sum total of 117 rooms. Amenities include a 24-hour business center, a health center that was updated in 2009 with new treadmills, stair stepper, bicycle, elliptical cross-trainer, scale and television, and for recreation, there are barbeque grills and an outdoor pool for guests.

Both investor and seller are privately held companies. The property reportedly plans to continue operations as a Holiday Inn Express a brand owned by the InterContinental Hotels Group of Utah (NYSE: IHG) that consists of nine hotel brands in the industry: InterContinental Hotels & Resorts, Crowne Plaza, Hotel Indigo, Holiday Inn Hotels and Resorts, Holiday Inn Express, Even Hotels, Candlewood Suites, Hualuxe Hotel and Resort, and Staybridge Suites. The IC Hotels Group includes more than 3,600 hotels located in nearly 100 countries.

InterContinental Hotels Group can be contacted at (800) 621-0555 and the Holiday Inn Express at Tucson Airport is at (520) 889-6600.

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After four years of negotiations, the elected officials of the City of Tucson (COT) voted unanimously to kill the sale of 22 acres at the northwest corner of Irvington and I-19. The City canceled the purchase option it had with Irvington Interstate Partners, an affiliate of Irvington Interstate Manager, LLC (Paul Schloss, manager) in September, 2011, when it was ready to sell the property for $4 million ($182,000 per acre) for development of a Sam’s Club.

The City however, ignored its own contractual land use restrictions on the property that it conceded in 2009 to the developer of the southwest corner of Irvington and I-19, the Barclay Group of Scottsdale, for the Home Depot and Target anchored, Tucson Spectrum. According to the Arizona Daily Star, the deal with the Spectrum provided encumbrances to restrict retail competition that favored the Tucson Spectrum until 2017. Restrictions such as these are certainly not uncommon, intended to persuade developers into economically disadvantaged areas, however, this restriction was never recorded. So who knew?

When the Barclay Group heard of the potential sale, in August 2011, it filed a claim against the City for a $112 million, just before the City decided to cancel its purchase option the Irvington partnership. This in turn prompted the Irvington partnership to file its own claim for $13 million against the City, for negotiating in bad faith.

Last October, the council re-opened discussions with the Sam’s Club developer, when the Tucson mayor and city council discussed the lawsuit and revisited the potential sale of this property. The following excerpt is from this Executive Session meeting dated Oct. 23, 2012:

“… it was moved by Council Member Romero, duly seconded, and CARRIED by a voice vote of 6 to 1 (Vice Mayor Kozachik dissenting), to authorize negotiations with Irvington Interstate Partners regarding possible terms for a sale and purchase agreement pursuant to the following conditions:

1) Interstate shall commit to analyze the feasibility of limiting the size of the retail development to less than one hundred thousand square feet in compliance with the City’s large retail establishment ordinance and that the City will reject Interstate’s proposal in the event that Interstate determines that it will not limit the retail development as described.

2) Interstate shall commit that as part of any purchase of the property; it will take the property subject to any enforceable condition on retail development on the site and will indemnify the City against any claims relating to such prior conditions on the property.”

Developers can’t easily redesign store sizes to oblige Tucson. The City passed the big box ban in 1999. Since then, the City should have learned from lessons such as The Bridges of Tucson, where a decision to waive the big box ban was met by cheering Southside residents in support of the waiver. Jobs were important on that day in 2007, and could be argued even more important today, with unemployment even higher.

It also seems a far-stretched idea for the City to ask a private developer to accept liability for any maltreatment of the City’s own contractual land use restrictions.

Sam’s Club would have been completed this year, in an underdeveloped, economically poor area in Tucson’s Ward One. It would have added approximately 160 new jobs; it would have brought about $4 million to the city coffers from the sale and as much as $750,000 more in impact fees. In addition, it would have brought an estimated $1.5 to $2 million annually in sale taxes for many years to come.

The Irvington partnership still has time to move forward with its claim against the City if it so elects.

However, many questions linger for the public following the death of this project. Why did the City allow such a long time lapse, after full disclosure was made that the site was going to be used for development of a 136,000 sq. ft. Sam’s Club? Shouldn’t the City Planning Department be privy to contractual land encumbrances for city property? How can a city plan without knowing where encumbrances lie? Then, exactly how far reaching are these retail restrictions for Tucson Spectrum, across the street, within a one-mile radius, two-mile, or more?

No one we spoke with at Tucson City Departments was able to answer any of these questions at this time.

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Kamel Properties, LLC an affiliate of Pools By Design, Inc. (Kenneth Larison, President) bought a 1,760 sq. ft. office condo at 7368 N La Cholla Blvd. in the La Cholla Corporate Center at La Cholla & Magee, for[mepr-show rules=”58038″]$265,000 (about $150 per foot). The property was bank owned by Compass Bank when it sold and will be owner occupied by buyer.

Pools By Design, a Tucson-based business, is in custom swimming pool designer and landscape construction company with 35 years experience in the industry. During Larisons’ years of experience he has worked as a designer, project manager, sales manager and general manager for three of the largest pool companies in the nation. He has been a leader in the industry with many design awards and achievements.

From the company’s website, Larison states, “My focus is on providing guidance based on my years of experience coupled with my commitment to conservation and intelligent design. So much of my success has come from a commitment to people, not only to my clients, but also my subcontractors, vendors and business professionals. Every day I ask people to perform above and beyond on my projects. I can only be successful if I provide the same willingness to serve.”

Larison started Pools by Design partly as a result of the changing market. Consumers must be selective to protect their investment. “Today our clients are looking for a higher level of service, attention to detail and a great value. At Pools by Design, that is our mission. We focus on providing excellent service while keep our overhead low. This creates happy customers, which makes for new business referrals. Lower operating costs are passed on as savings to our clients. It all works very well.”

David Montijo and Jeff Casper of CBRE in Tucson had marketed the property for $290,400 and handled the REO sale for Compass Bank. Maryanne Larison of Russ Lyon Sotheby’s represented the buyer.

Ken Larison can be contacted at (520) 797-6675. Dave Montijo is at (520) 323-5136 and Jeff Casper at (520) 323-5181. Maryanne Larison can be reached at (520) 742-1335.

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