This just in from the Phoenix Business Journal as reported by Jan Buchholz:

The Jackson Street Entertainment District proposed for downtown Phoenix may be a step closer to happening after the Phoenix City Council considers a related matter at its meeting Wednesday.

After more than a year of negotiations, the city staff has hammered out a lease-purchase agreement for the Jefferson Street parking garage located between Chase Field and U.S. Airways Arena on the south side of Jefferson Street. The agreement must then be signed with representatives of the Phoenix Suns and Arizona Diamondbacks, who need the 1,400 parking spaces on game days.

The ordinance scheduled for council action includes a provision that the professional sports teams, as part of the $20 million lease-purchase agreement, negotiate with the developers of the Jackson Street Entertainment District to allow construction of retail space and rental housing the southern exterior of the garage. That would be the first stage of creating the blockbuster entertainment-related neighborhood that would cover about 20 city blocks.

Dale Jensen, majority owner of the Arizona Diamondbacks and a minority owner of the Phoenix Suns, is one of the primary partners in the Jackson Street development, along with David Wallach, Brad Yonover and Michael Hallmark. Jensen has said that commencing the development by adding retail and residential components to the parking structure is crucial to the entire project. His insider status, however, didn’t guarantee that other team owners were keen on the idea.

Though Jensen told the Phoenix Business Journal last fall that a deal to secure the parking garage on behalf of Jackson Street Entertainment District was imminent, it didn’t happen.

Deputy City Manager David Cavazos said he has been negotiating with the teams toward a resolution on the garage. The city, meanwhile, needs the $20 million to reimburse another developer, RED Development Co., which is building the nearby CityScape project with additional public parking. Otherwise, the Jefferson Street Garage will be given to RED when its development is partially completed in 2009.

Cavazos said he is optimistic everything can be worked out, if the council approves the deal. He noted that Sun’s majority owner Robert Sarver is talking with the Jackson Street folks.

“Robert Sarver met with David Wallach (Monday) to discuss the Jackson Street Entertainment District concepts,” Cavazos said. “We walked Jackson Street as part of this meeting. We are hopeful that all of the parties will come together and negotiate in good faith during the next 60 days.”