The Surprise City Council voted 7-0 on Sept. 1 to pay a developer up to $4 million to build two public streets beside the next phase of the Prasada shopping district, on the condition that the developer pays the money back with interest.
The Alexandria Way Development Agreement, Resolution 2026-118, is with SimonCRE Prasada LLC, which owns land at the southeast corner of Waddell Road and Sarival Avenue. The company calls the project Prasada East.
Under the agreement, SimonCRE builds about 900 feet of Alexandria Way east of Sarival Avenue and about 700 feet of a new north-south street, 161st Drive, down from Waddell Road. A traffic signal at Alexandria Way and Sarival Avenue is part of the work, Assistant Economic Development Director Mike Hoover told the council.
The city reimburses the company's costs monthly as the work is done, up to $4 million. Anything above that is the developer's to pay.
How the city is repaid
The agreement's repayment terms are more specific than the "10-year period" on the slide shown to the council.
SimonCRE must repay everything the city pays out, at a fixed 8% a year, amortized over 115 months, which is nine years and seven months. Payments are monthly and capped at $49,913.51, or the amount needed to pay off whatever the city actually reimbursed if that is less.
Repayment starts on the later of two dates: the city's final acceptance of the finished streets, or Oct. 1, 2028. Interest begins on that same date, so the agreement as written charges none while the city's money is being paid out during construction.
If the city pays the full $4 million and the developer makes all 115 payments, the city would collect about $5.74 million, or about $1.74 million more than it paid. That is The Surprise Standard's arithmetic from the agreement's terms, not a figure the city has published.
The developer can pay the balance off early without penalty.
What the developer has to deliver
The obligations in the agreement are about the road, not the shopping center.
SimonCRE must finish the streets within 24 months of telling the city it has started clearing the site. It must bid the work under the state's public-construction law, Title 34, and the city will not pay any reimbursement until it has found the bid documents in compliance. The streets carry a two-year warranty and are then dedicated to the city, which maintains them from that point on.
If work stops for 90 consecutive days, and for 30 more after written notice, the city can terminate the agreement, stop paying and finish the streets itself. The developer would still owe back what it had already been paid, on the same terms.
The agreement in the council's meeting packet contains no requirement that the developer sign particular tenants, open stores by a set date, create jobs or generate a set amount of sales tax. The slide shown to the council listed "design, lease, finance, commence phase 1 of Prasada East" among SimonCRE's commitments; the agreement does not make that a condition of the reimbursement.
The agreement is to be recorded against the property. Lots sold or leased to others are released from it, but the developer must name at least one parcel that stays bound until its obligations are met.
What the city said it gets
The staff report describes the streets as "a critical enabling infrastructure component" for Prasada East, which it says is "anticipated to be anchored by Whole Foods Market." Hoover told the council the project would add about 150,000 square feet of restaurant, retail and service space, and named two other possible tenants. "All these are proposed tenants," he said.
He said the developer expected to begin the street work within about 60 days of the council's vote and expected a first tenant "as early as late next year."
The $4 million is in the city's fiscal 2027 capital budget as project P65510, "Alexandria Way and Public Rd A."