PROVO — The development agreement between Provo and the developers of the proposed Southgate Center shopping area in Provo's East Bay was ratified unanimously last week by the Provo City Council.

The completed agreement allows developer Boyer and Co. to secure letters of intent from businesses interested in opening shops at Southgate, 1860 S. 380 East.

Each letter of intent begins a due-diligence period for the city, the developer and the stores to examine all the details related to the development, Provo Economic Development Director Leland Gamette said.

Provo plans to turn over the land to Boyer in March. Construction is scheduled to begin in August, and the first stores would open in July 2009, Boyer Vice President Mark Pace said.

The project requires the developer to prepare a landfill for construction on part of the property, to fill in lakes on the land and to convert four holes of the Reserve at East Bay golf course.

The City Council is expected to take another step forward next week when it is scheduled to vote on designating 51.65 acres of land as surplus, a technicality it must complete before Provo can sell the land to Boyer for $6.5 million.

Target has signed a letter of intent to anchor the shopping area with PetSmart, Sports Authority and Circuit City as other tenants. Boyer has had discussions about bringing in Kohl's, TJ Maxx, Ross Dress for Less, DSW Shoes and craft stores like Michaels, Boyer's Lou Swain said.

Paradise Bakery, Payless ShoeSource, Famous Footwear and Shoe Carnival also have expressed interest, Swain said.

The 59-acre project is expected to cost $70 million to $75 million, with $45 million for the first phase of shops and another $25 million to $30 million for two office buildings in phase two.