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Construction expected this week on Northgate

The pieces of a long-awaited puzzle finally have fallen into place. Trader Joe's, REI, PETCO and other retailers officially have found a new home in Medford.

Years after plans for Northgate Centre and Alba Village were unveiled, the much-anticipated shopping center has cleared planning and financial hurdles that delayed the project so many times that the 84-acre site near Rogue Valley Mall sometimes seemed destined to remain an urban wilderness.

On Tuesday, Regency Centers formally announced it will begin construction of rechristened Northgate Marketplace, an 80,900-square-foot complex.

The final piece dropped in place Monday when national shopping center operator Regency Centers closed a deal for 7.8 acres where the first phase will go up between the "Big X" — where North Pacific Highway and Highway 238 cross — and East McAndrews Road.

"It's very rewarding in this situation," said Craig Ramey, senior market officer for Regency Centers' Portland office. "It's the art — not the science — of development, being able to creatively compromise with the cities, surrounding neighbors and tenants with the goal of long-term success for everybody. It took a while, but ultimately we're in good shape for the first phase and hopefully set up for future phases."

Trader Joe's will open a 13,000-square-foot store, while outdoor gear-and-apparel retailer REI will occupy 23,500 square feet. The closest store for either chain presently is in Eugene.

PETCO will occupy a 12,500-square-foot space, while Ulta, a cosmetics retailer, will open in 10,000 square feet of space. The center also includes a stand-alone parcel and 21,900 square feet of small-shop space.

Regency Centers, which operates 10 Oregon retail centers, said the first phase of the project will create more than 250 permanent jobs.

Trader Joe's spokeswoman Alison Mochizuki confirmed the trendy, upscale company known for organic food and bargain wine is coming to town next year.

The Monrovia, Calif.-based retailer operates 360 stores in 31 states and opens about two dozen locations annually. Salem became the most recent addition in Oregon last summer.

Market research and innovation consultant Brooke Warrick, president of Medford-based American LIVES, said that having Trader Joe's as a tenant is a major plus for retail developments.

"Trader Joe's is better than anyone in siting," said Warrick, who has clients from Toronto to Southern California. "They study things better than anyone can imagine. They look at growth projections and decide whether it's a good market, whether it's the right real estate and if the market is ready. If not, they won't pull the trigger."

While scores of "Likes," "Shares" and "Retweets" swept across Medford's social-networking scene following the announcement, no string of hoorahs, yippees or wows could match the relief of long-suffering Northgate managing partner Steve Morgan.

Morgan and Bay Area investor Guy Farthing acquired the development in 2003, when the economy was humming, and in 2006 lined up city approval for the 84-acre master plan. After that, progress slowed significantly.

In keeping with the tenor of the project's long start-and-stop journey, signs prematurely went up in mid-October boasting the project was on — only to come down a few hours later.

"The last three weeks have been kind of interesting," said Steve Morgan. "I think it's flat-out amazing. Nothing is stopping us now, although I wish we wouldn't have lost the last three weeks when we had all the beautiful weather."

One of the final sticking points involved an irrigation ditch on the property. The developers ultimately agreed to pipe the water underground.

"This one had a little higher degree of difficulty because of the development agreements or approvals that had to be in place," Ramey said.

He said road improvements are still needed, but once construction begins with foundations and footings, the shells will take 120 days to complete. After that, tenant improvements will take another 60 to 90 days.

Northgate Marketplace will eventually encompass 417,000 square feet on 40 acres and employ 1,000. The first phase includes the 80,900-square-foot center, which is already 75 percent leased. Construction is expected to begin this week, with anchor openings scheduled for the fall of 2012.

"Medford has been on everybody's radar for a long time," Morgan said. "People ask, 'Why do you have to build a new store?' The King Center on Highway 62 is so congested that there was no opportunity for expansion with any kind of national retailer. We have the dynamics they wanted, with good access to the freeway and four entrances."

Morgan said the rest of the Northgate project will come in time.

"We have been talking about Joe's rumors for years, and it's finally happening. The other tenants have been waiting for Trader Joe's, just to make sure we weren't just blowing smoke."

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.

Roland Buck and Jeff Buck, with Hale Signs, install a sign at the site of Northgate Marketplace, an 80,900-square-foot neighborhood center anchored by Trader Joe's and REI. Mail Tribune Photo / Jamie Lusch - Jamie Lusch