SURPRISE, AZ-The state's fourth-largest fitness center operator has teamed with two development pros to game out a long-term plan to add up to five health-oriented retail facilities per year, beginning in Arizona and Colorado.

Ground has just broken on the first project, the Village at Bell, an $8-million undertaking with a 40,000-sf Mountainside Fitness Center as the anchor for 15,000 sf of inline retail space. "It's a prototype," James Butwin, one of three partners in Bell & Reems Properties LLC, which is developing the facility on the only undeveloped corner at the crossroads of Bell and Reems roads.

Butwin says the development plan has been a year in the making. Butwin's partners include Paul Grasser, whose background includes development and finance primarily in the Tampa market, and Tom Hatten, founder and president of the 14-year-old Mountainside Fitness Centers. With the Surprise project under way, Butwin tells GlobeSt.com that the partners also have a six-acre site under contract in Gilbert for a mixed-use project and three letters of intent resting on tracts in the Denver area. "Mountainside has been in an expansion mode, but it's been somewhat conservative," he says.

The Ahwatukee, AZ-based fitness center anchor tenant, which has made a 15-year commitment to its Surprise space, opens the door to a preleasing courtship for a vitamin shop, tanning salon, chiropractor, juice bar and bicycle store. "There's a tremendous amount of interest," Butwin says. The class A space is being quoted at $30 per sf. The Upland Group of Phoenix is preleasing the 5.5-acre project, which will round out an intersection with a retail lineup that includes Albertsons, Walgreens and Whole Foods.

Butwin says the development partnership secured construction financing from Wells Fargo Bank with an automatic roll to a permanent mortgage after the center delivers in June 2006. JMS Associates of Phoenix designed the Village at Bell. The Utah-based Greenwood Construction Co.'s Tempe team is the general contractor.

Butwin says the plan is to build up to five centers per year with Mountainside as the anchor in each. "We're not looking to do just one at a time. When we break into a new market, we need to do at least two for economies of scale," he explains.