A Phoenix development group has purchased what’s known as Sugar Land’s Unocal Building, and plans major renovations as well as the addition of two new buildings on the Southwest Freeway site.

The Ellman Cos., through a related company, reportedly paid Unilev Capital Corp. of Beverly Hills, Calif. $60.5 million for a 9-acre site that includes the 25-year-old, 521,000-square-foot building. The Fort Bend County Central Appraisal District, however, lists the property’s assessed value at just $32 million.

Ellman also is seeking a tax break from the City of Sugar Land, while it makes renovations that would include heating and air conditioning improvements, elevator renovations, a “reconfigured” interior entrance and an expanded parking garage, according to information prepared for Sugar Land City Council by Regina Morales, the city’s economic development director.

Morales is recommending that the council grant Ellman Cos. a multi-year tax abatement and, as a vehicle for doing so, that council create a new reinvestment zone within the 9 acres the Phoenix company purchased.

Neither city nor Ellman Cos. officials could be reached for comment on this story on Saturday.

Now known as One Sugar Creek Place, the former Unocal Building served the California oil producer by the same name until Chevron Corp. purchased Unocal in 2005.

Chevron has a lease on the building until March 2010, but offices there remained vacant after the Unocal buyout until Fluor Corp. began subleasing space from Chevron about a year ago.

In documents prepared for the City Council, Morales said Ellman Cos. can’t make improvements to the building until after the Chevron lease expires. Consequently, the new Phoenix owner has asked that the tax abatement, if approved by the city, be phased in, possibly beginning in 2012 if certain conditions are met.

According to documents prepared by Morales and city staff members, the staff recommends City Council grant a 10-year tax abatement “up to 700% upon completion of all phases for new improvements only,” meaning that Ellman would continue to pay taxes on the building and parcel’s 2007 value.

Ellman Cos. “will receive 600% abatement for $5 million in improvements completed by Jan. 1, 2010, and an additional 100% abatement if they complete $8 million in improvements by January 2012,” the city documents state. “The agreement awards the abatements at the end of the 10-year period with the first 100% being provided in 2012 if the company completes $8 million and beginning in 2013 if they complete $5 million by the stated deadlines.”

Morales told council that because of the former Unocal Building’s age and other factors, its appraised value has dropped by almost 41% from 2003 to 2007 - or by nearly $28 million. During that same period, the city’s share of tax revenue from the property dropped by $83,703, and it expects to receive just $96,000 in taxes on the property for 2007.

To be competitive in the marketplace, Morales said in a statement to City Council, Ellman Cos. needs to make a “significant capital investment to upgrade the property if it is to be marketed as a Class A product.

She also said Ellman has “identified the opportunity to compliment the existing building by constructing two more office buildings on the site where the current surface parking exists.”

Ellman is a major retail developer, with projects in several U.S. and Canadian cities.

Earlier this month, companies affiliated with Ellman bought two Galleria-area buildings in Houston - 1001 West Loop South and 2425 West Loop South - with a total of about 504,000 square feet.