Interchange may lure retailers to Kingman

KINGMAN – The city could have new residents that go by the names of Lowe’s, Sam’s Club, Target and Olive Garden in the next three years. Kingman plans to woo the retail darlings to the heart of a new commercial corridor on the city’s east side.

A proposed interchange at Kingman Crossing and I-40 would create a new retail belt, relieve traffic congestion on Stockton Hill Road and connect the northeast quadrant to the rest of Kingman, say the project’s primary developer and the city.

“This is a really rare opportunity the city has for the possibility of redefining its commercial core. The key to the whole thing is the interchange,” said Brian Kennedy, vice president of Stone & Youngberg Capital Group.

The city hired Kennedy to research how Kingman could best use approximately 168 acres of municipal property immediately south of I-40 where the interchange is being planned. The site is located 1.5 miles east of Andy Devine Avenue.

“The city lands are going to benefit tremendously from this interchange, and in all likelihood, the city lands should take a share of the responsibility because it’s enjoying the benefits,” he said.

City officials and Bill Nugent, the developer of the 1,100 home Kingman Crossing subdivision, met with Arizona Department of Transportation engineers about the proposed interchange. The process to build has not begun yet because ADOT and Nugent are waiting on the city to decide if and how it wants to participate.

Retail chains are anxiously awaiting the city’s next move, Nugent said. He has letters of intent from national retailers interested in building on the site. He is restricted from saying exactly whom those retailers are, but he did hint they were companies that have not set up shop yet in Kingman.

“Everyone interested is ready to go,” Nugent said.

Kennedy presented Council with the results of a market study that shows the retail center could draw 90,000 people to shop in Kingman by 2012.

The results of the study show the need for a project of about 300,000 square feet, he said. “But 300,000 square feet would only occupy about 30 acres.”

Kingman’s ability to attract big box chains and their restaurant and strip mall companions depends largely on the access to I-40. Proximity to the freeway draws locals, regional shoppers and those passing through town. Available land for commercial development around the city’s three freeway interchanges has reached the limit.

Approximately 40 acres north of the freeway was rezoned to regional commercial about two years ago. The city’s parcel south of the freeway is zoned for open space.

The city has a lot of options available at this point. Council could decide to rezone the land, sell it, lease it or do nothing at all. An interchange would likely not be built if the city chooses the last option.

Economic Development Director Jeff Weir said that before any decision is made, the city would investigate the impact on existing businesses.

“Before we would do anything to actually market the site for specific tenants and that’s one of the things we’re going to establish long-range information about … we don’t want to lose what we already have. We don’t want to threaten what’s already here,” he said.

According to the county assessor’s records, the city’s 168 acres has an assessed value of $8,423. Kingman Special Projects Administrator Rob Owen said there has been no study to determine how much the land could be worth when fully developed. Nugent estimated the city could reap a $30 million windfall.

“The land pays nothing now,” Nugent said. “When you take desert and turn it into buildings, you generate money. That’s the theory of a progressive community.”

Kingman relies on its 2-percent sales tax for 54 percent of its income. Retail trade generates 51 percent of sales tax revenues, with construction second at 14 percent, according to the city Finance Department.

Usually when ADOT plans an interchange, the project requires a year to develop a design concept then it goes into the five-year plan. An interchange could cost around $20 million. Nugent said he would fund half the interchange to accelerate the process and complete the project in three years.

ADOT Kingman District Engineer Mike Kondelis said private development of interchanges has become a more common way to complete the projects in recent years. He estimates as many as 30 privately-funded interchanges are being considered.

ADOT would still need to approve designs and construction as would the Federal Highway Administration. ADOT assumes ownership of the interchange following completion.

Kondelis said ADOT would support the Kingman Crossing interchange along with another 1.5 miles east of it at Rattlesnake Wash. He added that ADOT considers the two interchanges as a package since they would compliment each other while serving different purposes

A new parkway would connect Rattlesnake to the airport and transfer the bulk of truck traffic from Andy Devine Avenue. Kondelis said the city has agreed to pay 30 percent of the interchange and parkway costs, with the state paying the remainder. The city would also be responsible for building the parkway south from Louise Avenue to Hualapai Mountain Road.

Kennedy said he would present a more concrete plan probably in the next three to six months. There are still a lot of issues to work on, he added.