Council vote lets Phase One proceed for center.

The Fresno City Council approved the environmental-impact report Thursday night for the first phase of a $500 million retail and entertainment center proposed for northwest Fresno.

The decision came after Fresno City Council Member Andreas Borgeas peppered developer Chris Shane of Los Angeles-based Gryphon Capital with questions for two hours on security, fire safety, traffic and the potential effect on nearby homes and businesses.

The project, known as El Paseo, would be on 238 acres south of Herndon Avenue and east of Highway 99. If built, it could rival the 240-acre River Park development.

"This is not an easy decision," said Borgeas, who represents the district where the project is proposed. "It's not something I'm crazy about. ... I'm reluctant to move forward on this in any way beyond Phase One."

The council voted 4-2 to approve the report and four other supportive documents: a water-supply-assessment report, an amendment to the Fresno general plan, a rezoning application and a development agreement for the first phase of the project only. Council member Blong Xiong was absent.

Phase One would turn 74.4 acres into the retail and restaurant portion of the project.

Borgeas suggested the council only approve Phase One because he said there is too much uncertainty about the future of the proposed area, which is expected to include construction of Veterans Boulevard, a new artery that would include an interchange with Highway 99, as well as part of the first stretch of California's high-speed rail system.

The later stages of the project would be contingent on the completion of Veterans Boulevard.

By approving just the first stage, Borgeas hopes it will give the city more time to develop a transportation plan for the area.

"Our development patterns have been haphazard," Borgeas said. "The problem we have now is a lot of development is occurring west of Highway 99, and we desperately need a plan."

Council Member Cynthia Sterling opposed the project and said she had major concerns. Sterling feared the project would be another Running Horse, which is a failed golf and luxury-home development in southwest Fresno.

That development "was supposed to be a major commercial project, and the city invested a lot of money, and community residents invested their money, and the project never got off the ground," Sterling said.

Shane pressed the council to approve the first and second phases of the project. Some retailers, including Target, have shown an interest in opening stores in the center already, Shane has said.

The second phase would add office space east of the retail center. The entertainment portion would come after that, with a proposed 2,500-seat theater and several hotels.

The next step for Shane is to submit site plan maps and details about the development. Once those documents are reviewed and approved, building permits can be issued, said City Attorney Jim Sanchez.

Shane hopes to begin construction next year and is shooting for a fall 2012 opening for Phase One.