The proposed Town Square on Avenue of the Fountains took another step toward reality last week when the Town Council unanimously approved a development agreement.

George Kasnoff, project manager and owner of Kasnoff Realty & Investments, told The Times they are ready to keep moving on the project.

“We are all glad (the agreement) has passed,” Kasnoff said.

The movie theater planned for the first phase of the project is in design, and a first draft of that design is expected to be completed this week, according to Kasnoff.

The developer is also working on a concept plan for the project, which will be taken to the Planning and Zoning Commission and council for approval.

The developer has yet to close escrow and take ownership of the property. That is being facilitated by the local office of the Private Consulting Group, Inc. Kasnoff has indicated closing is expected to be completed by mid-November.

The schedule of performance, which is part of the development agreement, gives Kasnoff six months to complete acquisition of the property.

Kate Zanon, assistant to the Fountain Hills town manager, has been involved in the project from the early stages and outlined the agreement for the council.

The town is to reimburse the developer for $1 million in public improvements including the Avenue of the Fountains streetscape upgrades adjacent to the project.

The developer will be responsible for creating an art walk within the project as well as pedestrian open space.

The agreement also includes a development fee limitation. The developer will pay up to $1 million in commercial development fees but not above that figure for the duration of the phased-in project.

However, all development fees for residential units will be paid.

A significant component of the agreement is a shared parking agreement, which allows the development to count existing town-owned parking in the civic center area toward parking requirements for the development.

The concept is that offices and the government operations will have offsetting business hours from much of the plaza businesses, in particular the theater, which will require the most parking.

The plan is counting 500 town spaces, along with 700 newly-developed spaces in the project.

The proposal for new parking includes an area between Paul Nordin Parkway and the civic center. This parcel is owned by the town and had been designated for a small park or art walk area.

The agreement calls for the developer to put in an art walk east of the intersection of Paul Nordin Parkway and Verde River Drive leading into the new development. The art walk will lead into an open space area that is also designated for public art displays.

Art will still serve as an integral part of this plan, according to Planning and Zoning Director Richard Turner. 

“The art walk is placed in the center of the project instead of the exterior as it makes more sense to have parking on the exterior,” Turner said. 

Construction of the art walk and open space is slated for Phase III of the overall project. The new parking lot would be part of Phase I.

The performance schedule outlines the development as a 10-year project to be built in four phases.

Overall the project is projected to include 459,603 square feet of mixed-use development including office, retail, restaurants and residential condominiums.

Phase I, which Kasnoff is estimating could be completed in late 2009, is to include the 12-plex theater. It also calls for 37,500 square feet of retail and restaurant space, 40,000 square feet of office space and 3,000 square feet of residential condominiums.

The first phase is planned for the southwest corner of Avenue of the Fountains and Verde River Drive, closing the vacant gap between Verde River and the civic center area.

Phase II, which is scheduled to begin by 40 months out, would begin the development up the Avenue of the Fountains from Saguaro to Verde River Drive. That is to include about 40,000 square feet of commercial retail/restaurant and office, and about 10,000 square feet of residential condominiums.

Phase III is the largest portion of the project and includes the area along Verde River and south of Phase II. Phase III is to begin no later than 70 months from approval. This phase includes 80,000 square feet of retail and restaurant and 83,000 square feet of residential.

The final phase is slated for the area behind the Holiday Inn and west along Paul Nordin Parkway. It is to start construction at around 100 months and includes 16,000 square feet of retail and restaurant, and 102,400 square feet of residential condos.

The council was unanimous in its support and had few questions or comments from Zanon or the developer.

“It this time of low confidence (in the economy), this show of support is important,” Councilwoman Ginny Dickey said. “I look forward to seeing this project go ahead.”