By Cecilia Chan, GSN Managing Editor
A David-and-Goliath fight is playing out in Gilbert’s Historic District between a businessman and the town.
For 13 years Marc Barlow has run his commercial real estate business out of a building he bought on Gilbert Road and Hearne Way when it had sat vacant after a veterinary clinic closed shop. He also owns an adjacent vacant parcel east of his office building.
“There was nothing down here,” said Barlow, who had served on the town’s Redevelopment Commission for 11 years. “It was me, Joe’s BBQ, Oregano’s and Liberty Market. Across the street was a trailer park.”
Barlow was among the business owners who invest early in the town’s Historic District, designated a redevelopment area in 1989. Substantial growth has been occurring every year in the district since 2007.
Barlow said he sunk a considerable sum of money on improvements to the 24,000-square-foot building, including $30,000 for a monument sign. He also added five additional parking spots to the existing seven in order to get a loan and meet the town’s zoning requirement.
Nearly 30 years later after Gilbert adopted its first redevelopment plan guiding revitalization in the Historic District, it is now a destination hot spot of trendy bars and restaurants.
Downtown’s success, however, is coming at a cost for Barlow.
Gilbert in August authorized eminent domain proceedings on Barlow’s property, which the town needed for a five-deck parking garage under construction since February.
Lack of off-street parking is endemic in the district. And on-street parking is scant because the town once allowed buildings to be built up to the property line.
The garage will help address further parking demands as the town anticipates significant infill development over the next several years in the district, local officials have said.
In 2016 town leaders decided to build the Heritage District Parking Garage II, three blocks from a multi-level garage completed in 2014. The town’s redevelopment plan discourages and limits new surface parking in the district.
The garage is being built on 1.2 acres of town-owned property at the east end of Hearne Way. Gilbert over the years had spent millions buying up much of the land in the downtown corridor to jumpstart redevelopment.
The town wants to take 755 square feet from the northeast corner of Barlow’s 12,000-square-foot vacant parcel to build a roundabout at the garage entrance to accommodate emergency vehicles.
The roundabout will be at the junction of Hearne and the proposed BriComp Drive, a new street that will come north off of Vaughn Avenue to Hearne on the west side of the garage, according to court documents.
Barlow says that if the town builds the roundabout, it would eliminate access to his vacant property, leaving it landlocked and hampering his development of a mix-use project on the land that is now on hold.
The town also wants to rebuild Hearne Way with a 20-foot sidewalk and a drop-off lane, taking 273 feet in the process and effectively eliminating five parking spaces – about half of the parking for Barlow’s building that houses three other tenants.
It also would eliminate access to his building, forcing him to share access from Gilbert Road with a neighboring business.
Barlow said when he added the five parking spaces, officials agreed to let him put the new lots partly on town property.
“The town gave me rights to use it for parking,” he said. “I repaved and striped it. I need all the spaces over here.”
He fears his tenants would leave with the loss of parking spaces for their customers.
The town argues the five parking spots are almost entirely on public right-of-way and that there was no easement granted for Barlow to use it for parking.
Although Gilbert maintains the eminent domain proceeding is for public good, Barlow sees it differently and has counter-sued the town.
He and his attorney argue the $19.2 million garage and the roadway improvements to Hearne are all to benefit a private developer – Common Bond Development, which purchased town-owned land in the northeast corner of Hearne Way and Gilbert Road.
The Phoenix developer is currently building a structure there to house Fox Restaurant Concepts’ The Yard and Culinary Dropout restaurants.
“We are not saying the town can’t build,” said eminent domain attorney Dale Zeitlin. “A government can build a garage and make it available to everyone for free or charge a parking fee. That part we are not challenging.”
What they are challenging is that the town is giving exclusivity to the developer and his tenant.
Zeitlin points to the town’s March 2018 parking license agreement with Common Bond.
The 10-year agreement includes exclusive use of 100 of the 600 valet parking spaces for the developer’s tenant, 11 a.m.-11 p.m. seven days a week. Ninety-two spaces will be on the ground level and eight on the top level of the garage. Each deck will have 120 to 124 parking spaces.
Although the town says the public will be able to park in those spots outside of that time frame, Zeitlin calls that assertion absurd.
“This whole area is restaurants and there’s no reason to park in the garage before 11 a.m. and no need to park in the garage after 11 p.m., so I think it’s a bit disingenuous on the part of the town,” he said.
The parking garage and public improvements to Hearne Way are expected to be completed by next March, according to the town.
Barlow’s suit claims the town is violating the gift clause of the Arizona Constitution to the tune of $3.8 million, which Gilbert disputed. The clause prohibits government entities from gifting private entities with public funds or any public work.
Zeitlin argues Common Bond should help pay for the publicly funded garage. He came up with the $3.8 million figure by dividing the number of spots reserved for Common Bond with the cost of building the garage.
Although Common Bond under the agreement will pay the town $33,554 a year for the use of the parking spaces, those payments only cover the garage’s maintenance and operation and not the construction cost, according to Zeitlin.
“The developer is getting 100 exclusive spaces and not spending a nickel into the cost of capital, let alone that doesn’t include the value of the underlying land,” which would put the garage project closer to $25 million, he said.
Gilbert countered it does not currently charge for parking, and all of the town-owned property in the Heritage District used for parking, including the existing garage, is available at no cost to businesses and patrons.
Zeitlin claimed the 8-foot drop-off lane will serve as valet parking services entirely for Common Bond’s tenant, which Gilbert again disputed.
“The valet drive is clearly for The Yard,” he said. “It will be privately run, but Gilbert claims anybody can use the valet. That’s interesting except for the fact is you would not use the valet if you are not going to The Yard.
“They’re taking a public street for a private valet, and so we believe the entire project is basically converting public road to predominately private use and we don’t think that is constitutional,” Zeitlin added.
And because the building is allowed to build up to the property line, the 20-foot sidewalk is being built to accommodate patrons to that site, he said.
“So, the town is saying this is a promenade, a public promenade,” he said. “OK, we hear that, but the reality of this is when The Yard opens its doors and Culinary Dropout opens its doors, people have to congregate in the street so the town is building a sidewalk.
“Our point is Hearne was a public street,” Zeitlin said. “And we believe you are really fundamentally converting a public street for private use for The Yard.”
According to the town, Hearne Way was designed as a one-way local collector with a 12-foot thru lane and an 8-foot pick-up and drop-off lane to promote walkability, provide for a pedestrian-friendly environment in the Heritage District, and provide for a dedicated location for drop-off and pick-up for the public and ride-sharing services.
Given the location of the new parking garage and BriComp Boulevard, the one-way design with a dedicated public drop-off and pick-up lane is the most suitable configuration for Hearne Way, according to Gilbert.
Both attorney Charles Ayers, who represents Gilbert in the suit, and Town Attorney Christopher Payne declined to comment on the lawsuits.
If the court were to rule against the parking license agreement, it won’t stop the construction of the garage or Hearne Way, the town states in the lawsuit.
If the court nullifies the agreement, it would remove the 100 reserved parking spaces for Common Bond, according to the town.
And the town would simply reconfigure Hearne by widening it by 2 feet and provide two, 11-foot-wide, one-way eastbound lanes, the suit said.
An evidentiary hearing is scheduled for Dec. 12-13 to determine if the garage is a private or public use, according to Zeitlin.