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TUCSON-Two years after acquiring a 16.5-acre tract in the midst of the master-planned Rancho Del Lago, a Phoenix developer has penciled first-quarter 2008 to break ground on a retail project. The 115,000-sf Mercado Del Lago will be anchored by a 55,000-sf Safeway grocery store.

The Aspen Group has been holding the land at Colossal Cave and Old Vail roads until residential growth justified development. “We knew the area wasn’t built out enough to absorb retail at that point, but with a build-out in the residential, the retail came on board about when we expected it to,” explains Don Meyers, founder and CEO of the Aspen Group. He adds Safeway is shooting for a Q3 2008 opening, with other retailers to follow. The project cost is being finalized.

Along with the 20-year Safeway ground lease, Meyers tells GlobeSt.com that Aspen has commitments from JPMorgan Chase Co. and McDonalds Inc. for two pad sites. With asking lease rates in the exceeding $25 per sf, he says “we’ll end up with a smattering of regional and local tenants to fill the inline.”

Aspen Group’s project manager Tony Beuche says there is little competition for the shopping center at this point. “The next grocery story is probably six miles away,” he says. “This sits in the middle of a master-planned community plus it’s a location that’s somewhat geographically protected by mountains to the north and northeast.”

Brian Harpel and Aaron LaPrise with the Harpel Co. Inc. in Tucson are handling leasing. Ellerman, Schick & Bruno Architecture Planning from Phoenix has designed the development. The general contractor’s decision has yet to be picked.

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