Vizzda—August 28th, 2013 — An entity formed by Holualoa Companies, The Plaza Cos. and Arizona State University Foundation have signed a new 75-year ground sub-lease for SkySong, the ASU Scottsdale Innovation Center. Holualoa and Plaza displaced the original developer of the site, USAA Real Estate, which retains interest in the multifamily development onsite. As this was not a fee simple conveyance, no affidavit of value is required and therefore no sale price is available.
The acquiring entity secured $17.839m in new construction financing with Alliance Bank of Arizona to begin construction on SkySong III—a 145,000 ft2 4-story research facility in the southwest quadrant of the project. Plaza Cos., which is the master developer of SkySong I and II, will continue in that capacity with assistance from Holualoa; the master developers have enlisted DPR as the general contractor and Butler Design as the architect. Groundbreaking is slated for Late September.
SkySong was developed under a Government Property Lease Excise Tax arrangement with the City of Scottsdale, who is the master lessor of the property. This arrangement calls for the City of Scottsdale to acquire the property from the original developers and lease it back to them at a discount to property tax payable in lieu of collecting said property tax for a period, after which time the property tax liability and the ground lease rent are roughly equivalent. This master ground lease was modified to reflect the new leasehold ownership several days after the close of the sub-lease agreement.
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