The Fred Meyer shopping center in Maple Valley has reached a crossroad according to the Bellevue developer and next month is shaping up to be make or break time.

Peter Powell, owner of Bellevue-based Powell Development, is planning the construction of the shopping and lifestyle center that would include Fred Meyer at Four Corners.

During a phone interview Powell outlined the hard numbers and decisions ahead for both the city and the developer.

Powell said the staff and city had worked through a number of problems. He stated he had no dispute with the staff or the city manager, but Powell said the total cost of fees for the project coupled with the economic realities of the market have placed the project in jeopardy.

According to Powell the fees top about $4 million, this includes fees from Covington Water District, sewer, a local investment district and the city.

“The numbers are not all the city’s,” Powell said. “I am not saying the city has not been working with us, they have. They have done a good job of give and take…. We are not saying we want different treatment. We are suggesting this (project) will not work as it stands.”

When asked directly about the life of the project, Powell stated if the fees remain unchanged, the project is dead, but he added the company continues to be “looking at all avenues.”

One of the top issues according to Powell is the construction of 242nd Avenue East. The city staff estimated the building the road will cost $240,000, but Powell said his company’s estimate is around $500,000.

Powell stated because the project is not in the city’s six-year transportation improvement project list, the cost of construction falls to the developer without a reduction in traffic impact fees from the city.

The developer said construction of the road will help traffic in the Four Corners area, which should allow for an offset in impact fees.

“What we are doing is not different from what we do in any city,” Powell said. “Normally if you build a road adjoining the project we get an offset.”

Powell said since the road is not in the TIP, “we have to pay for the road and we don’t get an offset. If it (the fees) keeps piling on, the project is stopped.”

Powell said the fees are nearly $2 million over the break point for the project and at this point it simply doesn’t pencil out.

Another issue is the commercial irrigation meters Covington Water District requires at a cost of about $85,000 per meter. Powell said the complex would need three at a cost of about $255,000.

According to the city, the district requirement does not take effect this year, which appears to mean if the project is vested this year the developer may be able to avoid this charge.

According to Johnston’s council report, a special assessment credit of $288,000 is also possible that would be applied to the traffic impact fees.

Powell said he is building a Costco in Roseburg, Ore. and the total impact fees are about $780,000 and he is building a large complex in Marysville and the impact fees are about $2 million. He noted his company has developed similar projects in Redmond, Burien and Kent.

“We want to pay our fair share,” Powell said. “We don’t want to leave Maple Valley worse that when we found it, but, at some point in time the math does not work out.”

Powell said he has “never run into fees like this.”

He said the representatives from Fred Meyer and parent company, Kroger, based in Cincinnati, Ohio have presented the hard numbers.

“(They) are very good people,” Powell said. “They said, ‘Peter here are numbers.’”

Powell said he has gone to the city, “and shared our numbers. Fred Meyer wants to know are we going to go or not…. If this project can’t get over the finish line the money goes away.”

Powell said he continues to “think we can get where we need to be.”

Powell said a market analysis completed by Hebert Research in Bellevue, found a total retail sales deficit in 2007 in Maple Valley of about $3 million. The analysis noted a total of retail sales in the city of about $150 million, with a demand of more than $4.5 million. This did not count auto parts or gas.

The Herbert document pointed to “leakage of revenue to surrounding communities.” The document noted the only area where the city met retail demand in 2007 was the “food and beverage sector.” There is a retail shortage in “furniture electronic, sporting goods, food services and drinking places. There was a shortage of $23,221,689 for clothing and clothing accessories in Maple Valley,” the document stated.

According to Powell, the city would receive about $333,000 each year in tax revenue from the shopping center.

Fred Meyer is a retail department store selling groceries, garden supplies, clothing, home accessories and health and beauty products.