The Phoenix City Council voted on Wednesday to authorize the city's Community and Economic Development Department to enter into an agreement with Thomas J. Klutznick Company for the planned upscale mixed-use $1.8 billion development known as CityNorth.

Wednesday's vote allows the city to finalize agreements to provide for dedicated long-term spaces in the development's parking structures to be used exclusively as free public parking for retail customers, transit patrons, park-and-ride passengers and monthly parking for adjoining office employees.

The city will pay a use fee for the public parking spaces using a portion of the sales tax funds collected by the city from the project. The agreement is performance based and current sales tax revenue will not be used for the project.

“I am excited that CityNorth is coming to District 2,” said Councilwoman Peggy Neely. “This urban-core, mixed-use project has been years in the making and will be the crown jewel of retail in Phoenix, the region and the state of Arizona. Beyond retail, it incorporates an employment center, capable of attracting high-profile corporate users and headquarters, a corporate and luxury hotel center, and a major residential center. CityNorth is truly an investment in our future and will be an economic engine for the city of Phoenix. There is huge, pent-up demand for high-quality retail projects in the Arizona market. This project is important for our city’s future as we work to secure a way to maximize our future sales tax dollars for police, fire and other city services. I am pleased my colleagues joined me in supporting this endeavor.”

The planned CityNorth development will be located on the northwest corner of the Loop 101 and 56^th Street. Unlike anything in the region, the development will feature 1.2 million square feet of retail space and restaurants including four major department stores, 2 million square feet of office space, approximately 2,000 residential units, a five-star and four-star hotel and five parking structures developed on 144 acres. At build out over the next five to 10 years, the proposed project will include 5.5 million square feet.

City officials expect the development will generate about $200 million in sales taxes over the next decade for the city, about $600 million for the state.

“Our family has been committed to the development of the northeast Valley for more than 20 years,” said John Klutznick, vice president of Thomas J. Klutznick Company. “The decision enables us to realize the vision for CityNorth, which will be an urban core that creates excitement, vibrancy and lifestyle-enhancing options for residents of Phoenix as well as the entire desert Southwest.”

The project is designed to incorporate the best aspects of city living including meticulously landscaped plazas, sculpture gardens, captivating architecture, shopping, dining, entertainment, world-class hotels and approximately 2,000 residential units that will create a higher density—a key component with a mixed-use project. Streets within the project are designed to encourage a pedestrian-friendly Main Street atmosphere.

Thomas J. Klutznick Company is a privately held real estate investment, development and consulting firm. The president of the company, Thomas J. Klutznick, has been a leader in the real estate industry for more than 40 years. Among the landmark developments for which he has been responsible are Chicago's 730 North Michigan Avenue, a collection of luxury retailers and The Peninsula Chicago Hotel; Los Angeles's Fox Plaza Office Tower; The Inn & Links at Spanish Bay Resort, Pebble Beach, Calif.; and The Little Nell Hotel, Aspen Colorado.