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ORO VALLEY, AZ-After investing $8 million into the infrastructure, a local developer and his leasing team have jumped into negotiations for ground leases and build-to-suits with retailers and office users for Mercado del Rio, a 19-acre project divvied into 16 development tracts.

Kit Donley, partner with the locally based development group, says the land could support 150,000 sf by the time construction’s done. “Our goal is to sell half the lots and to do spec build-to-suits on the remainder,” he tells GlobeSt.com.

Donley says the first spec most likely will be a hotel along Pusch View Lane, just west of Oracle Road. Right now, it’s estimated it will take 18 months to two years to deliver the project.

Donley and his partners acquired the land in 2004 with an eye toward offering a different style of mixed-use center. He says most developments don’t have much space for locals once anchor and national credit tenants are entrenched. “If we can pull off what we’re trying to do here, we’ll end up with a village concept with a lot of the tenants not being the local cleaners, but owned and operated businesses that offer more of a destination,” he explains.

Donley says it’s not going to be easy to fulfill the goal. “Because they’re individual buildings and different tenants and owners, every one of these has to go through a full plan before the council,” he says. “We’ve already had 50-some items up for a public hearing.” The long-time resident of Oro Valley, though, believes Mercado del Rio will provide a good place for local businesses to better serve the trade area.

“There’s been a pent-up demand here for retail-zoned property that users can get into right away, and where they can have a presence,” says, Nancy McClure, first vice president with CB Richard Ellis Tucson LLC. She and CBRE associate Shannon Murphy are handling presales and preleasing.

Frontage pads are being sold for $24 per sf to $28 per sf and back parcels for $16 per sf to $19 per sf. Lease quotes go from $25 per sf to $32 per sf.

“We’ve had some good interest on this,” McClure says. “We already have some pads that are under construction and some that are in escrow including a steak house, a car wash and a car-care facility. Now that there are signs of construction going on, there is more interest.”

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