Hayden Ferry South, a mixed-use project that includes office space, retail shops, restaurants and residential developments, is planned for the southeast corner of Rio Salado Parkway and Mill Avenue, just south of Tempe Town Lake, a 2-mile long man-made lake built in the bed of the Salt River and adjacent to "A" Mountain. The mountain is so-named because of a giant "A" that adorns it, which is a symbol for nearby Arizona State University.

Preservationist and nearby residents were dismayed when the development first announced that it would have 728,500 sf of space and be built to such a height that it would obscure the view of the mountain. The developers also planned to do away with a flourmill silo that's more than 50 years and considered a landmark for downtown Tempe.

Now the developers have agreed to scale back their square footage, lower the height of the buildings and preserve the flourmill in exchange for $12 million in incentives from Tempe. The deal is expected to be formally approved by the council tonight.

Under the terms of the agreement between the developers, MCW Holdings Inc., the project will be limited to an elevation of 1,180 feet and five buildings, the highest of which will be eight stories. The project's size is now just 462,000 sf, which is more than 260,000 sf less than originally proposed.

In exchange for the changes, MCW Holdings Inc. will get property tax abatements for eight years and an 80% rebate on sales taxes for an estimated 15 years from the city. Tempe will also create a six-acre park and trade more than acre of the developer's parcel to create an historic preservation area that will include the flourmill and silos. Tempe will also provide 250 public parking spaces on the site.

Local preservationists and nearby neighbors are thrilled with the compromise reach with MCW Holdings Inc.