Kingman Crossing may be back on the drawing board

New I-40 interchange part of talks

The sleeping giant known as Kingman Crossing opened one of its eyes Tuesday when the city announced that several organizations agreed to discuss a development agreement for the project.

The need to build an Interstate 40 interchange near the site where the Hualapai Mountain Medical Center now sits has been a topic of discussion in Kingman for nearly a decade. Discussions related to developing the area for commercial purposes came later, but they've been a big topic as well. But there's always been one fundamental question no one can answer: Who is going to pay for it?

That question might be answered when Ledcor Construction, Flair Industries, the city and a couple of property owners - one being Kingman Hospital, Inc. - finish negotiating.

"It's about time," said Kingman Mayor John Salem. "Let's get this bad boy done."

Imagine the jobs it would bring in, he said.

The city and the stakeholders are pursuing a memorandum of understanding - basically, an agreement to work with each other to get Kingman Crossing rolling. It's early in the process, but it's happening.

"We're just exploring whether or not the project is viable at this point," said Ledcor Construction's Mason Gorda. "It's very premature right now."

The memorandum will come before Council for authorization Sept. 4.

If authorized, Kingman will conduct a fiscal impact study to look into the effect of the proposed retail center and the interchange on infrastructure.

According to the memorandum, which will be used to guide talks, the city would also be responsible for facilitating the discussions, amending the general plan if needed, re-zoning areas to fit the development and getting approval on any Arizona Department of Transportation-related matters that affect the project.

Ledcor would be the construction manager and would also work to obtain financing should a development agreement be reached.

Flair Industries is the developer. If an agreement is reached, Flair would most likely be responsible for developing a conceptual design with Ledcor, interacting with the city to determine development needs, attracting tenants and securing leases in order to meet funding requirements.

Most all are in agreement that the interchange is needed, said Kevin Spilsbury, the president of Flair. Now is the time to bring all the players together and see if the project is feasible and the financial kinks can be worked out, he said.

"Maybe there's something we can put together," Spilsbury said.

The property owners in the area, Kingman Hospital Inc. and W Kingman Crossing LLC, would need to subordinate property surrounding the Kingman Crossing site.

Spilsbury explained that when developers come to property owners for their cash portions of the project, many of them do not have the funds.

But they can subordinate their property, which means they give up their land for a period of time. Then the developer can put up the money the property owners don't have and use the subordination of the property for security.

"It's a way to make sure we get paid," Spilsbury said.

Kingman Hospital Inc. CEO Brian Turney said he was approached about possibly helping to develop the intersection of Kingman Crossing Boulevard and Santa Rosa Drive, constructing an interchange and developing the area for retail.

"It would be good for the community to have additional retail development," Turney said. "Whether or not discussions bear fruit remains to be seen."

Don't expect Kingman Crossing construction until at least 2014.

In a best-case scenario, where negotiations go well and the interchange's design meets ADOT requirements, shovels won't go in the ground for another 18-24 months, Spilsbury said.

After the memorandum of understanding comes the development agreement, which gives way to the search for financing and the creation of architectural and engineering plans, he said.

Though the parties involved can extend the time period of the memorandum, the date it ends is Oct. 4.

If parties can't agree to a development plan by then and they're not interested in continuing talks, conversations would stop and the deal would be off the table.

Gorda said he thinks that's not enough time and planned to see if he can get the time period extended before negotiations even start.

Even with construction a long way off, it's still significant that groups are sitting down at the table to hash out a plan and see if the project is worthwhile.

"I wouldn't waste my time if I didn't think the project was viable," Spilsbury said.