Al Ramirez of Scott and Sons Masonry adds to the final row of bricks along the top of a single-family residential unit being built in the Mercado District of Menlo Park. Developers of the district want the city to waive at least $1.3 million in impact and permit fees, and provide security to curb break-ins and thefts at the site. City officials are considering the request but said the city will need to see benefits from waiving the fees.

Kelly Presnell / arizona daily star

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Developers building a Mexican-inspired housing, commercial and office project on the west side of Rio Nuevo want the city to waive at least $1.3 million in impact and permit fees.

In a letter to the city, developers of the 14-acre Mercado District of Menlo Park also asked the city to provide night and weekend security to curb break-ins and thefts at the site.

City officials are considering the request and plan to meet with the developers this week, but they said a new development agreement would be required to waive the fees.

Jaret Barr, assistant to the city manager, said the community needs to see a benefit from waiving the fees.

The developers said they were verbally promised during the process of developing the project that impact fees and building permits would be waived and other development incentives would be given.

In addition, the developers said because they built the new road, Avenida del Convento, on the site, they shouldn't have to pay impact fees, which pay for infrastructure. The developers also note that, unlike many projects in Rio Nuevo, they paid the full market price of nearly $1.5 million for the land.

"It's unfair," said Tom Wuelpern of Rammed Earth Development Inc., one of four companies building homes on site, many of which will be Sonoran-style row houses and Spanish-colonial houses. "We feel a little bit out on our own."

Wuelpern said many of the smaller companies on the site are just scraping by, and the impact fees could be their profit.

"We're almost at zero profit," Wuelpern said, adding that he recently sold land in Colorado to cope with rising costs. "We have to think about whether we can survive this storm. I don't see any large profit down here at all."

Barry Coleman, who is building three row houses on the site, said the city provided builders a list of incentives in a letter, which said the builders wouldn't be charged impact and building-permit fees. "Then we get down there, and they charged the impact fee," he added. "It's impacting us."

Coleman said he wasn't able to find the letter on Friday.

Barr said there's no documen-tation of the offer to waive impact fees and said the city has to determine if an offer was made, because all of the top Rio Nuevo officials from that period are gone.

"We want to be fair," Barr said, but he added: "There's got to be a reason to do it."

To waive the fees, a new development agreement would have to be drafted and then be approved by the City Council, Barr said.

The project calls for 100 single-family homes, 160 condominiums and loft units, and about 80,000 square feet of retail space and offices.

The commercial and condominium numbers are not exact because the developer of those units recently modified the design and has not provided updated numbers. Adam Weinstein, a partner with the Gadsden Co., could not be reached for comment.

The main commercial building is called the Monier Brickyard — after the former brick maker who had a plant in the area — and it will include an underground garage, retail and office space at street level, and condos upstairs. There would also be a mercado, a strip of retail outlets built like stalls with a grocery store as its anchor, along Congress Street.

Plans include pedestrian walkways and plazas resem-bling those of old Mexico, and retail space along Avenida del Convento.

City Development Services Director Ernie Duarte said the home builders owe $300,000 in impact fees on the rest of the 100 homes not under construction. The building-permit fees, at a cost of about $4,000 per house, would add another $312,000 to the bill.

The commercial impact fees for the condominiums, if based on an average of 1,200 square feet per condo, would be another $384,000. The impact fees for the 80,000 square feet of retail development would be approximately $320,000.

The $1.3 million doesn't include building-permit fees for the condos or the retail development, something Duarte said he couldn't calculate on Friday. And if more retail and office space is added to the project, the fee costs will continue to rise.

In addition to the higher costs, builders said, they've been hit hard by thefts and want the city to hire night and weekend security. Coleman said a cement mixer, tools and copper have been stolen from the site and that it has also suffered graffiti damage. He said city officials promised they'd help look after the property with extra police patrols.

Wuelpern said the graffiti and thefts "hurt pretty deeply," and the builders can't pay for their own security guards.

"Having a full-time security guard is something we can't afford at this moment," he said.