Demolition of the mall began last March with great hope that something would soon be under construction there, but the work came to an abrupt halt in September after negotiations turned ugly between Ellman and the city. The half-demolished mall has been fenced off since.

On Tuesday, the demolition crews were back on the job site, ripping out asbestos from a Red Robin Restaurant, one of the last tenants to leave the mall before it was closed forever. The demolition will continue for the next 20 weeks, with the razing of the sizable structure on the east side of the parcel coming down in about 10 weeks.

The demolition of the mall isn't a sign that a final deal is any closer to being drafted between the city and Ellman, say city officials. It's just one of the requirements that Ellman must complete to continue moving forward with the redevelopment project.

In December, the city told Ellman that he would have to resume the demolition if the city were to extend the life of the Los Arcos Stadium District, a public entity that gives Ellman access to at least $200 million in public funds for the redevelopment project. Ellman also agreed to post a $560,000 bond to guarantee that the demo work would be completed.

Earlier this month, the city extended the life of the district by six months. Ellman and city officials are now negotiating the final development agreement, or "term sheet," detailing what the city will get in return for its investment and what Ellman is agreeing build. In the nine-page terms sheet Ellman submitted to the city earlier this month, he promised an "acceptable" rate of return for both the city and himself.

Among other issues, Ellman is asking that the zoning on the site be modified from strictly retail and office to allow several hundred condominiums to be built.

A 17,500-seat ice hockey arena will be the cornerstone of a 1.75 million-sf entertainment and shopping complex, which will be built at the southeast corner of McDowell and Scottsdale roads. Ellman has suggested that no tax money be used to build the stadium itself, but that the $200 million in public funds be used for parking facilities and infrastructure improvements. The project will include hundreds of thousands of square feet of retail space, a multi-screen movie theater, bars, restaurants, office space, a YMCA center, 7,000 parking spaces and apartments.

Instant Insights /

Demolition Resumes on Site of $575-Mil Project

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