Occidental Management's plans to launch a mixed use development — starting with five commercial lots in what has been dubbed phase I of a larger project — can finally move forward.

At a special meeting Tuesday afternoon, the city commission voted 4-1 in favor of a development agreement with Occidental Management for a commercial development on South Kansas Avenue. The city and Occidental Management have negotiated since 2013 to create this agreement.

Kathy Valentine was the lone vote against the agreement — and she made it clear that the city having to pay for right of way to build streets was why she voted nay. 

"I have had a problem with the right of way, and I continue to feel that way," Valentine said. "... I have had a lot of outside counsel and I feel (directed) to continue to take the stand that I do."

For the first phase of the project, the city will spend more than $200,000 on right of way for the construction of two streets. Future phases of development could push the total for right of way purchases could rise to $680,900 over 15 years.

"I am committed to be careful how we spend our taxpayer dollars. I cannot imagine how much more we would enjoy this project if we are not having to pay for right of way," Valentine said. "... It is a lot of taxpayer dollars to spend on right of way and then to construct (streets)."

Occidental and the city have been in negotiations over development of the 76.6-acre tract since 2013. The development will be phased and will consist of general commercial along South Kansas, potentially followed by single- or multi-family residential along the north side of the parcel and professional offices along the south side.

The approved agreement covers the first phase of development, a strip of small-lot commercial development fronting South Kansas. It includes the following commitments by the city, as requested by Occidental:

For the first phase of the development, the city is committed to:

• Extend a water main along South Kansas. Estimated cost: $179,500.

• Purchase street right-of-way at $4 per square foot for the southern street. Estimated cost: $115,000.

• Construct 300 feet of the southern street, Quail Creek Avenue, west of South Kansas and improve the intersection as an unlit, two-way stop on Quail Creek Avenue with a single left-turn lane and shared through/right-turn lane. Estimated cost: $315,650.

• Purchase street right-of-way at $4 per square foot for the northern street. Estimated cost: $98,800.

• Construct 300 feet of the northern street, Wheatridge Drive, west of South Kansas. Estimated cost: $380,100.

• Realign Wheatridge Drive east of South Kansas Avenue to prepare for a lighted intersection. Estimated cost: $845,200.

• Install traffic improvements on South Kansas, including a traffic signal at Wheatridge. Estimated cost: $254,800.

• Install a center median on South Kansas to prevent straight-through traffic at Windward Drive, with the intersection of Windward Drive to then become right-in, right-out only.

• Waive up to $25,000 in city fees, including zoning, platting, permitting, inspection, etc.

The agreement also includes “trigger events” for future phases of development, for which the city would acquire from Occidental additional rights-of-way and construct additional public improvements. The agreement contains city cost-benefit thresholds that must be met by any such trigger events, plus the city’s obligation to proceed only if the City Commission at that time appropriates sufficient funds.

As future development takes place, and because of the findings of a recent traffic study, the city will need to consider whether to also extend Wheatridge Drive to the west to intersect with Paddington, at an estimated cost of $1.57 million.

Donna Pickman, director of finance for the city, told the commission that the financial side of the proejct is "doable" for phase I, though there will likely be a lag between when the city begins paying on debts incurred and when increased tax collections as result of the project begin.

She said that future projects will be difficult to time, and the debt service will be an issue.

"The first one we can manage," Pickman said. "(Some of it) will supersede what we have in our (Capital Improvement Plan). ... We do not have enough to do everything in the CIP as it is. Next year when you see the five year bond and interest, I tried to put it out if we did everything what it would cost us each year. We cannot do everything."

The first phase is expected to generate about $117,000 per year in property tax revenue for the city when fully developed.

"It feels like we are signing up for this to be our primary focus financially for a while," Hague said. "If I have any struggle with this, it is from that perspective. I am all about expanding our tax base. I think we need to do that. I am all about growth on the south side. Goodness knows, whatever we do next, we have to deal with traffic."

Occidental’s staff has been in contact with city staff to start the process of platting the development, a process that is expected to take about 90 days and go before the Planning Commission this fall.