Eastbourne Grabs 115 Acres for $80M Open-Air Retail Project

TUCSON-Eastbourne Investments Ltd. has closed on 115 acres for $23 million from Salt Lake City-based Sinclair Oil Corp., becoming the last partner to get its stake in a large-scale, mixed-use development. The Williamsville, NY-based investment group plans to spend $80 million to develop about one million sf of open-air retail space.

The University of Arizona and a partnership of national homebuilders control 242 acres for their share of the land plan for Interstate 10 and Kino Parkway, site of the Tucson Airport in the 1940s and 1950s. "These projects will be a great stimulus for the area and will revitalize this part of Tucson," Eastbourne president Frank Egan says.

Eastbourne hired Boise, ID-based Retail West Properties, led by Eric Davis, to steer development and project management while Phoenix-based Hogan & Associates, headed by Randy Titzck, for leasing of the as-yet unnamed retail center. "The project will house big boxes, but we hope to integrate more entertainment and specialty shops than a typical power center," Egan says, adding the undertaking will be one of the largest in Eastbourne's history.

Egan says Eastbourne became involved in the land trade in January when the Los Angeles-based KB Home started searching for a commercial developer after placing a contract for the entire 357 acres in fall 2004. Eastbourne jumped at the chance, Egan says. "We went non-refundable with $1 million within 24 hours," he tells GlobeSt.com.

According to Egan, Eastbourne and the homebuilders' partnership, which includes Lennar and U.S. Home, then decided to do separate transactions with Sinclair Oil rather than work a flip after KB Home bought it. KB Home brought the Miami-based Lennar and Houston-headquartered U.S. Home to the deal after it struck an agreement with Eastbourne.

The homebuilders paid $30 million for their 242 acres. Immediately afterward, they jumped into a land swap with the University of Arizona, trading 65 acres of the Sinclair Oil land for 120 acres in the master-planned community of Rita Ranch. The homebuilders plan to build out the 177-acre balance with 550 single-family homes in the $250,000 to $400,000 category. The development is expected to break ground in first quarter 2006.

Egan says the University of Arizona plans to develop a research and technology park on its acreage. He estimates ground could break in 2007.

Eastbourne, the university and the homebuilders have submitted a mixed-use rezoning request to the city. "We hope to finalize the plan before the end of the year," Egan says.