The massive Middleford Commons downtown redevelopment inches closer to reality as city leaders will start on a development agreement Thursday, though one council member wants further study before spending millions in taxes.

The Medford City Council and Medford Urban Renewal Agency board are scheduled to discuss a development agreement for the project during a joint study session scheduled for noon Thursday, Room 151, Lausmann Annex, 200 S. Ivy St., Medford.

Bill Hoke, Medford's economic developer and deputy city manager, did not return phone calls Tuesday but wrote in an e-mail that he will present information on the status of the agreement Thursday. He wrote that the city is working toward an agreement about the project between the city, MURA and the developers.

Middleford Commons is multi-block urban redevelopment project that would include headquarters buildings for Lithia Motors, built and paid for by Lithia, and a variety of publicly funded infrastructure improvements, including utilities, sidewalks, roads and a park. It would be between Central and Riverside avenues and Jackson and Sixth streets, an area now occupied predominantly by Lithia's car dealerships. Lithia has said the car lots would be moved to property it owns on Highway 62 near the Medford airport.

Other planned development includes a residential/retail building, additional surrounding mixed-use buildings and a parking structure. Based on a study done in 2005, the cost of Middleford Commons would total $169.3 million. Of that, MURA would contribute $17.3 million, the city would contribute $3 million and $2 million would come from grants. The office/housing/retail space would cost $147 million, including $62.6 million to build Lithia's headquarters.

But Councilman John Statler said he's not convinced the community could support such a venture.

"I'm still waiting for the market study to justify $14 to $28 million dollars in taxpayer money," he said. "How can you spend all that millions of dollars and not have a study done?"

A local citizens group that kicked off a recall effort of five city council members Thursday cites the Middleford Commons project as one of its main gripes.

According to the group's Web site, www.responsivecouncil.org, the group does not support the recent 12-year extension of MURA's life to help fund infrastructure improvements for Middleford Commons, and says developers should pay the costs for any improvements to streets, sewers, storm drains and traffic control.

One of the first steps of the project will be Lithia relocating its car dealerships to 133 acres it owns on Highway 62 near the airport. The company recently submitted plans to the Medford Planning Department for a 100-acre car dealership.

Reach reporter Meg Landers at 776-4481 or e-mail mlanders@mailtribune.com.