The Town Council and the developer of the proposed Park Place Phase II and Phase III developments for downtown Fountain Hills were at odds this past year, ultimately reaching an agreement with construction on the project expected to begin in 2023.

In March the council considered site plan proposals for both phases, which the council unanimously rejected after the Planning and Zoning Commission had recommended approval.

Council members told Bart Shea, principal with N-Shea Group, the developer for the project, the plan the council was presented was not consistent with the P&Z Commission recommendation.

Phase II for the development is primarily residential apartments with commercial on the ground floor along Avenue of the Fountains. Council members said they did not like how the commercial development was designed and did not think it reflected what the commission had recommended earlier.

The site plan included 8,000 square feet of commercial space, however, the council did not like the visibility and accessibility to proposed shops. It also did not like that there was no commercial facing Saguaro Boulevard across from Fountain Park.

There was also disagreement over whether the plan was in compliance with the development agreement for the project originally approved in 2016.

Shea returned to the council in June asking for an extension to the June 17 deadline to start work on the project called for in the development agreement. The council refused to approve the one-year extension requested by Shea. The council discussed shorter extension proposals but did not consider another timeline.

With the development agreement scheduled to expire June 17, Shea filed a lawsuit claiming, among other things, that the Town was deliberately trying to “run out the clock” on the project.

The suit asked for $67 million in damages against the Town. The judge, however, saw the original agreement as having a clear timeline with the Town under no obligation to extend that. He did not accept Shea’s argument that the Town was acting in “bad faith” and trying to run out the clock.

The two parties entered negotiations regarding the project and in October the council accepted a settlement agreement on a unanimous vote.

The agreement states, “under the terms of the amended development agreement, the developer will have a 12-month extension of time from the date of the settlement agreement to obtain the permits to construct the remaining phases of the Park Place project. The settlement agreement also reaffirms a number of existing provisions contained in the previously approved development agreement.

“Each party believes that this agreement is in their best interest, and each party represents that the agreement is the product of a compromise and settlement of disputed claims.”

As of the time the settlement was approved the Town had paid $22,000 in legal fees related to the suit. The Town of Fountain Hills is a member of the Arizona Municipal Risk Retention Pool (AMRRP), which would pay costs up to $50,000.

As of the New Year it has been reported that the plans for the development are under review by a third-party entity. It is unclear when construction might begin.