The Gilbert Town Council on March 24 approved converting part of a struggling retail plaza to apartments.

The proposal for the Shoppes at Gilbert Commons on the southwest corner of Baseline and Cooper roads sharply divided interested parties at the meeting, which was closed to public attendance. The public was allowed to listen in and comment through phone-in technology.

While the Gilbert Planning Commission unanimously approved it, plaza businesses supported it and several people also wrote in support, town staff recommended disapproval. The Gilbert Chamber of Commerce opposed it, and a neighborhood survey showed strong opposition. Most written correspondence to the council was in opposition.

In the end, council voted 5-2 to approve the changes for the 16-year-old center. Council Members Bill Spence and Scott Anderson voted in dissent.

The center includes big-box retailers Kohl’s, Old Navy, Ross Dress for Less and TJ Maxx, all of which front Baseline. However, the Cooper-facing portion of the plaza is nearly entirely vacant and has been for eight years.

Owner SyWest and developer P.B. Bell, which also manages multifamily properties, contended the eight years of vacancies were a market indication that commercial space would not work there.

The proposal is to rezone 47.99 acres of regional commercial to allow for multifamily housing, but 39.36 acres would remain untouched, and 8.63 acres would be converted to an apartment with 205 units. The end result would be a mixed-use development.

In the developer’s narrative document to the council, attorney Ralph Pew wrote the change would “inject a new sense of vitality to an established part of Gilbert. The Gilbert Commons multifamily development will bring about a high-quality residential use that will be of distinct design quality and that will complement and enhance the surrounding area by contributing to the diversity of housing options in the vicinity.”

At the council meeting, Pew argued the 205 apartment units would be filled with people who would shop in the area, increasing the viability of the remaining tenants at the Shoppes at Gilbert Commons and other plazas in the area.

However, in staff’s council communication document, Senior Planner Amy Temes wrote the overall proposal lacks the design elements needed to realize the mixed-use vision of the general plan.

A letter from the Gilbert Chamber of Commerce board of directors called making a decision in this case “precedent-setting,” as other cases of tearing down portions of retail centers to make way for multifamily housing could happen as retail models change.

“We have concluded that the end product as proposed does not deliver a multi-use development without issues that need to be resolved prior to approval,” the board wrote.

In communications to the council, nearby residents argued that the area had too many apartments already and that the town would be losing revenue by replacing commercial space with multifamily units. Traffic, safety and environmental concerns also were mentioned.

Residents also mentioned the development in the Northwest Corridor, which the town is studying for possible redevelopment, but those plans have yet to materialize. Questions about how this would fit with those plans were cited by Anderson in his vote against the proposal at this time.

But those members voting for the proposal cited the long time period with which the center has had vacancies despite a good economy. Council Member Jared Taylor said the center is unlikely to get tenants in the future due to the changing nature of retail in the face of e-commerce and now the coronavirus effect on businesses.

Mayor Jenn Daniels said she frequently opposes multifamily projects she found to be the wrong fit for an area but did not see that in this case. Daniels compared the project to Gilbert Town Square, which struggled in the early 2000s until a multifamily project was built there and brought new life to the center.

Comprehensive Annual Financial Report

Accounting Manager Tanya Wright presented the Comprehensive Annual Financial Report, a detailed financial report of Gilbert’s funds, to the council.

Wright said the report received an unmodified audit opinion and has been submitted to the Government Finance Officers Association for a Certificate of Achievement for Excellence in Financial Reporting, which Gilbert has received for the last 28 years.

“What it means ... is that data in our report is reliable,” Wright said.

Auditors from HeinfeldMeech found one deficiency, an error in the valuation of infrastructure assets contributed to the town by developers. The town did not use the correct square-footage area for pavement in calculating values for various street assets.

The result was an overstatement of infrastructure in the amount of $5 million. The town subsequently made corrections to its process and implemented additional review procedures, according to the auditor.

Other business

  • Spence was sworn in as the newest council member at the beginning of the meeting. He was appointed March 17 to replace Eddie Cook, who left to become the Maricopa County assessor.

  • Council voted 5-2 for an issuance of voter-approved bonds for the Public Safety Training Facility. Taylor and Aimee Yentes voted in dissent, with Taylor renewing his objections to the facility’s cost and the increased tax levy.

  • Council directed staff to allow homeowners to opt out of soil report requirements by use of a waiver. The action required no vote.