Phoenix: CityNorth - 144 acre "Urban" development

[Azndragon837]

All,

I agree with the Goldwater on this issue as well. Sean, I am going to have to disagree with you on this topic. Everytime I hear the name "CityNorth" (or how I quote the CityWok Chinese Guy in South Park: ShittyNorth) I shutter because of the massive amounts of subsidies Phoenix basically give away.

I like Don's analogy of the two kids getting nothing and the third getting everything. It's about how fair this is. This project would have happended anyways, or it would have went across the freeway to Scottsdale. It does not matter to me, because I can't afford the crap the luxury development will sell. I'll take my Target any day.

Developers developing property on the city periphery should never get any help from the city. I would be less "irratated" if subsidies were handed to developers that want to develop in the core, which we all know is more difficult to build in with land values and tight spaces. Again, it's unfair to others.

Adding subsidies to a suburban development is not helping with downtown development at all. Again, we are still at 98% suburban fill and 2% infill, and CityNorth just doesn't help our goal of a more vibrant downtown because of the money handed to the developers.

If I were a downtown developer trying to construct a mixed-use condo tower, I'd be freaking mad at Phoenix for throwing $100 million for a suburban development while I am trying to make ends meet with a 35 story high-rise downtown.

-Andrew

[CANUC]

I’m with Don on this ass well. Look, we’re a bunch of downtown cheerleaders like Soleri often accuses us of being, so how can anyone really by OK with the idea that the city is willing to subsidize a suburban development so far from the very location everyone wants to see revitalized? Isn’t the city shooting its core in the proverbial foot by encouraging these types of developments? Why subsidize a development that in all likelihood would have been developed anyways – so you get real stone instead of faux stone as a façade – whoopee doo! The reality is the City North, Keirland Commons and Westgate are indeed suburban malls disguised as urban cores or ‘lifestyle’ locations or whatever you may wish to call them. They do nothing to enhance the downtown of Phoenix and in my opinion actually detract value from DT by drawing people away from the core. I’m not some idealist that thinks every retail venue should be downtown but come on folks WTF is it with this fascination with these far flung locals that simply try to imitate an urban environment? Why is it that the very people who rave about their ‘urban’ feel spin on a dime and blast DT by saying they won’t venture because it’s to gritty?

I also strongly disagree that giving tax incentives to developments in the suburbs is no different than giving those tax breaks to an infill project, especially if it’s in DT. Won't infill projects help bring tax dollars and a mix of income levels to areas that truly need it? Won't infill projects help reduce commutes, help reduce fuel consumption, reduce traffic congestions and make apples taste just a little bit sweeter (alright I know I wen to far with that one). What I am saying is that I would reduce Don’s proposed grid area to only encompass anything south of Northern, east of 35th Avenue, west of 16th Street and north of Broadway road. Developments in this area get the lunch money the rest of the kids will have to contend with mud pies.

[PhxSprawler]

Although I would prefer to see the money going downtown, Phoenix has to be competetive with surrounding suburbs. Chandler, for instance, helped to subsidize a parking garage for Chandler Fashion Center (which never happened), and is giving breaks to a plethora of companies to boost its employee/resident ration from .49 in 2000 to .71 by 2010 (chandleraz.gov long range plan). All other suburbs in the valley are playing this same game. I am not saying it is a fair system, but it is necessary to ensure vitality for the future, not just the short term. In the political game, the city has a lot more power to say what can and can't happen on a site when they are tying up taxpayer funds.

I am no expert on this, but how many millions will be spent fighting this bullshit lawsuit brought on by developers trying to limit competition? I don't live in Phoenix, but that's great that you would rather spend your tax dollars in the courtroom than subsidizing smart(er) growth. Regardless of what is said, City North is better for the environment and region than a Target or Wal-Mart Supercenter.

[DevdogAZ]

While we'd all like to see city money go toward improving Phoenix's downtown, that doesn't mean that the city leaders should totally disregard the other 99% of the city area that also needs amenities and funding. That stretch along the 101 in N. Phoenix has potential to bring millions in sales tax into the city coffers, much more than anything proposed recently in downtown. However, there is very real competition from the other side of Scottsdale Road. If the city doesn't help the developer to make this project attractive, some of the amenities might end up at Scottsdale 101 or elsewhere, leaving Phoenix with fewer sales tax dollars. So while we look at it from a regional perspective and see a zero sum game, where a win for Phoenix is a loss for Scottsdale, etc., the city leaders have to look at it only from the perspective of how it will help/hurt their city. They have no incentive or authority to help Scottsdale or any other suburb. Their only task is to maximize the money coming into Phoenix, and apparently they felt that giving a tax subsidy to CityNorth would accomplish that goal.

[Don B.]

^ ^^ All of these are sound arguments, and these are some of the reasons why I support the legislature's move to ban all incentives, to stop these bidding wars between Phoenix and her suburbs, and between suburbs. That will ensure a level playing field for all participants.

--don

[combusean]

Why is an arbitrary box drawn in the center of the city any more fair or justifiable? Then it truly is a case of the other guy getting the subsidy, especially if you're on the wrong side of Northern or Broadway or whatever street.

Each project should be debated on its own merits--would CityNorth been able to attract luxury retailers, bringing in additional sales tax dollars, if they had to spend all their money on the requisite parking garages? I don't even know how you guys can compare Desert Ridge and Kierland with this thing--they are on far such smaller scale and include acres of surface parking masquerading as something quasi urban. CityNorth is public streets and real mixed use, everything we always ask for.

Getting those kinds of amenities that we want--affordable housing, historic preservation, LEED certification, might be impossible with this kind of precedent. The Goldwater Institute is diametrically opposed to any city assistance of specific projects urban or not--its the entire basis of their lawsuit. Goldwater certainly wouldn't go for the infill box "solution".

The Goldwater Institute is just another backward organization that would rather see the desert be eaten alive with wide roads and houses more than anything that could have value. They doesn't give a flying rat's ass about the region's competitiveness or urban infill or the level of quality we should get in new projects. You support them, you support the entire region turning into Eloy.

Consider the trickle down effect and the region's competitiveness when you go for sweeping reforms like this--something had to be done about illegal immigration, and we have a "solution" now, but it's the businesses both home-grown and out of state that will take that into account when deciding to locate or expand here. Thus, it's not just Phoenix that's competing with Scottsdale. It's the Phoenix metro competing with Las Vegas and Los Angeles and Denver and Houston and every other peer city. If we can't offer a subsidy, but any of the listed cities can, how is Phoenix supposed to compete?

Do I like closed-door deals where this is hammered out? Nope. Should there be direct citizen involvement, possibly with cities ceding local control of the issue to the county or state? Sure. But a proactive solution to the "problem" of city vs city fighting won't be solved with the Goldwater lawsuit.

From the original article on CityNorth's subsidies, courtesy of Joel's site:

Phoenix has made 27 similar agreements that help offset the developers' cost for public infrastructure, including water and sewer lines and roadways, since 1989. The city has reimbursed $35 million to developers, and report that those projects have funneled $330 million in sales taxes into the city's coffers; $49 million of that rolled in during 2005 alone.

Mayor Phil Gordon said that the way Phoenix structures its deals poses no risk to the city because money isn't paid up front and rebates apply only once sales taxes are generated.

Westcor officials are not rattled by the city's agreement with one of their competitors.

"We're still at full speed for Palisene," said Scott Nelson, assistant vice president of development for Westcor. "In no way does that (deal) sway our planning efforts for Palisene."

[andrewkfromaz]

Originally Posted by combusean

^ I have read the arguments in favor of subsidies for the project--evidently, it would have happened regardless. But with subsidies, they can make better choices in building materials, build garages instead of lots, and have other nicities to result in a better project overall. That attracts the luxury retailers (more sales tax money) and makes the whole thing happen.

To support the Goldwater Institute in this is to be against any subsidies in projects, regardless of their location. We say yes to this lawsuit and we can kiss goodbye a whole slew of things that can make projects work downtown. Affordable housing, LEED certification, historic preservation--it would all fall by the wayside for this sort of precedent.

The Goldwater Institute doesn't give one flying fuck about good urban design, the kind of design that may only happen with subsidies given Phoenix today. They're in this fight on a whole 'nother level.

Some great comments, Sean. Parking garages, in particular, make a huge difference. Compare parking and driving in Desert Ridge to even PV Mall's garage, and you'll see what I'm talking about.

It's an excellent point to state that the Goldwater Institute, with which I often agree on many social and economic issues, would see no incentive ever given to any developer, whether downtown or not. I think it's going too far to state that this organization is against sustainable development; they simply feel that the market should drive progress, not government. If the market demands sustainable development, the gov't should not stand in the way, and should only facilitate by offering uniformly low taxes and the freedom to build whatever developers want to build (i.e. loose land use regulations, zoning, etc.)

Do I personally agree with this argument, for minimal government interference, either to promote or to otherwise "limit" development? Not really, but we can go on and on about that. I'm going to the Central Village meeting at the library, and I need to leave...

[DevdogAZ]

Until the state and local governments stop providing infrastructure (water, sewer, electricity, roads, etc.) and stop collecting taxes and development fees from these projects (i.e. never), you'll always see developers asking for tax-increment financing, which I have absolutely no problem with. If a city is going to benefit economically from a development, and if the city is going to require extensive installation of infrastructure, there should be no reason why the developer shouldn't petition the city to "participate" in the process.

The argument that the free market should dictate what is feasible doesn't take into account the taxes and other monies paid by the developers/tenants. If it were entirely up to the free market, you'd have to take those things out of the equation.

And lets understand exactly what we're talking about. Cities are not ponying up cash to these developers. No cash is going from the city to the developer. This is simply cities "forgiving" some of the taxes that will be generated by the project once it's complete, meaning the city won't collect as much taxes as it otherwise would, but apparently the cities feel like this is still beneficial to the city or they wouldn't keep doing it.

All this legislation is going to do is make it nearly impossible for developers/retailers to build anything in the rural areas of the state. We look at the bidding wars between the cities in the metro area and think the developers are just playing the cities against each other. But if this process is completely outlawed, it's going to make it very hard for rural cities to entice any kind of development into their area if they can't help out on the infrastructure by forgiving some of the future taxes.

[andrewkfromaz]

Originally Posted by Don B.

Sean, this is one we are going to disagree on:
2. Building a parking garage at CityNorth does not an urban utopia create. In fact, a turd covered with frosting is still a turd. Where's the mass transit? Why is this being constructed in BFE when there's tons of underutilized land in the rest of the city (infill) that this would better be situated on? The city can still control what projects look like without having to shell out huge subsidies. Bribing the developer to build a parking garage here (or making it "nicer" as you put it) is like sticking your finger in the dam as it collapses around you. I might add that this project likely would have happened anyway, due to the location adjacent to Loop 101. That's the only thing that was "likely to have happened regardless," however.

Parking in garages does make a substantial difference. Desert Ridge did not receive tax incentives, and thus is a nightmare to get around when it's busy, and often when it's not.
The way Phoenix, Peoria, and Scottsdale are growing northward, CityNorth may soon be a transit (bus) destination rather than what you're looking for, transit routes downtown/to the airport. I think offering upscale shopping in far north Phoenix is better than not offering it in Phoenix at all, and will ultimately help Phoenix compete with such places as Orange County, Vegas, Chicago, &c.

Downtown Phoenix is a ways from having the market to support these kinds of development, and frankly I don't think downtown should have this kind of development. The age of the enormous master-planned center is over in downtown, or will be once CityScape is built. The city should focus on enabling smaller-scale development by expediting the development process.

[xymox]

Interesting to see that a tower crane is now on the site - must mean they are going to build the taller 8 story buildings soon. Makes for an interesting drive eastbound on the 101, 3 tower cranes are in view, in an area of mostly natural desert...

[andrewkfromaz]

And some really, really big holes (kind of hard to get a great look in them as you go past, but they're impressive)

[NorthScottsdale]

Phoenix to get state's 1st Bloomingdale's
Erica Sagon
The Arizona Republic
Oct. 27, 2007 12:00 AM

Is Arizona's first Bloomingdale's in the Big Brown Bag?

The upscale department store is expected to announce as early as next week its plans to open at CityNorth, a mixed-use development going up in north Phoenix.

Bloomingdale's, which is owned by Macy's Inc., won't say whether it has signed a lease. But industry sources say it's no secret that the retailer has struck a deal and that an announcement is forthcoming.





The store is known for its trendy mix of high-end merchandise that customers tote away in trademark brown paper bags.

CityNorth's co-developer, Related Urban, touted its catch in May at a Las Vegas retail convention, when company representatives used a 3-D model to show onlookers where Bloomingdale's would locate.

Nordstrom already has committed itself to opening at CityNorth, a 5.5 million-square-foot development with shops, restaurants, residences and offices that is under construction at Loop 101 and 56th Street, next to megashopping hub Desert Ridge Marketplace.

Several developers were wooing Bloomingdale's, including Westcor, a Phoenix company that owns or manages most of the Valley's malls and which plans to build a competing project nearby.

[shawneriksmith]

I guess Phase One is topped off now (High Street). I didn't realize that they were that far along...I might try to stop by to get some pics.

http://phoenix.bizjournals.com/phoen...05/daily4.html

[HX_Guy]

Bloomingdale's coming to CityNorth development





Cathryn Creno
The Arizona Republic
Feb. 13, 2008 10:16 AM
In a sign that high-end retailers continue to covet a presence in the Valley despite the downturn, the first Bloomingdale's department store in Arizona is set to open in the fall of 2009 at the CityNorth project in northeast Phoenix.

Macy's Inc., which owns the upscale brand founded in 1872, said Thursday that the store would be its 10th Bloomingdale's in the western United States.

The deal had been expected for a few months.

CityNorth, a mixed-use development is being constructed at 144 acres at Loop 101 and 56th Street.

The project will have three department stores. Nordstrom already has signed on.

Macy's also is expected to sign on with its signature department store.

“We believe that Bloomingdale's will provide a unique shopping experience for Phoenix, based on distinctive assortments and attentive and personalized service for which we are well-known,” Michael Gould, Bloomingdale's chairman and CEO, said in a statement.

CityNorth, is being billed as a “city within a city” featuring department stores, condos, offices, smaller shops and restaurants.

Valley developers have long coveted bringing in Bloomingdale's. It is one of the few luxury brands without a presence in the market.

Despite any short-term economic trouble, the Valley is poised for continued population growth and the northeast Phoenix area has a demographic with deep pockets, said Steven Hoch, who heads the retailing department at the University of Pennsylvania's Wharton School.

“Nationally there have been very few malls built in the last five to 10 years,” he said. “If you are Bloomingdale's, you need to be in a mall if you want to expand.”

New York-based Related Urban Development, which is taking the lead on CityNorth, has been involved in similar projects.

It touts Water Tower Place in downtown Chicago, Copley Place in Boston, Time Warner Center in New York, Reston Town Center outside Washington, D.C., in Virginia, Pacific Place in Seattle and CityPlace in West Palm Beach, Fla., as projects resembling CityNorth.


I've gotta say I like how this looks, it's like Kierland Commons but on steroids. Kierland is more or less just boutique shops, but CityNorth will have real department stores, more restaurants, and hopefully "everyday" retail making it a true live/work downtown like experience.

[andrewkfromaz]

In addition, Kierland only has a limited number of (very pricey) housing units in the actual development. There are thousands of homes near Kierland, but only a few within true walking distance. City North will have far more units inside the master-planned footprint of the development itself. Joel C might have the exact numbers, or you could check his site phxloftnetwork.com and click on forum and upcoming developments. He keeps pretty up to date with new residential projects coming down the pipe, although there's not a ton of discussion as here.

[HX_Guy]

[HX_Guy]

I think CityNorth isn't helping downtown Phoenix at all. On the contrary, it may be taking some potential residents away and giving them a new place to settle.

Having said that however, I think CityNorth is genius. I believe there are plenty of people in Phoenix who would like a more urban living environment, but the truth is, the grittiness and surrounding areas of downtown turn them away.

CityNorth in my opinion looks very urban. It seems dense, it has street fronting retail with residential above, as well as many retailers and restaurants, plus future offices/hotels within walking distance. While it's on the outer edge of Phoenix, we can credit it with the fact that if the residential units were to be spread out in single family homes, it would certainly take up much much more then the 144 acres that CityNorth is taking.

I've said it before, but I truly enjoy Kierland Commons. The big problem with it is it's scale, you get the urban sense...but as soon as you turn a corner, there's a sea of parking and major roads that bring you back to reality. CityNorth has the land area that it could turn into a true urban center.

[loftlovr]

http://www.bizjournals.com/phoenix/s...=et73&ana=e_du

Friday, February 15, 2008 - 11:48 AM MST
Bloomingdale's joins CityNorth mix as lawsuit continues over project's tax deals
The Business Journal of Phoenix - by Lynn Ducey Phoenix Business Journal

Bloomingdale's is joining the tenants at CityNorth, a mixed-use project at 56th Street and Loop 101 in Phoenix. The high-end retailer will open its first Arizona store at the center, comprising 180,000 square feet of shopping on three levels. It is expected to open at the end of 2009.

Nordstrom, another high-end chain, also will open a store at the center.

CityNorth is under fire as community activists and others have gone to court over tax deals involved with the project. The city of Phoenix agreed to rebate almost $100 million in sales taxes generated by CityNorth back to the developer, Chicago-based Thomas J. Klutznick Co.

As the lawsuit continues, so does construction. The first phase is expected to open in October.

Ultimately, the 144-acre, 5 million-square-foot development will include 350,000 square feet of office space above restaurants and specialty retail shops.

[BA744PHX]

About time... Does anyone think Bloomingdales my take over Macys at the Biltmore???? It would seem perfect for that mall instead of a tacky Macy's

Originally Posted by loftlovr

http://www.bizjournals.com/phoenix/s...=et73&ana=e_du

Friday, February 15, 2008 - 11:48 AM MST
Bloomingdale's joins CityNorth mix as lawsuit continues over project's tax deals
The Business Journal of Phoenix - by Lynn Ducey Phoenix Business Journal

Bloomingdale's is joining the tenants at CityNorth, a mixed-use project at 56th Street and Loop 101 in Phoenix. The high-end retailer will open its first Arizona store at the center, comprising 180,000 square feet of shopping on three levels. It is expected to open at the end of 2009.

Nordstrom, another high-end chain, also will open a store at the center.

CityNorth is under fire as community activists and others have gone to court over tax deals involved with the project. The city of Phoenix agreed to rebate almost $100 million in sales taxes generated by CityNorth back to the developer, Chicago-based Thomas J. Klutznick Co.

As the lawsuit continues, so does construction. The first phase is expected to open in October.

Ultimately, the 144-acre, 5 million-square-foot development will include 350,000 square feet of office space above restaurants and specialty retail shops.

[BA744PHX]

I guess it would be a safe assumption that Macy's will be the third ancor? Would be odd if so I would think either Saks or Neiman Marcus would fit there.
Also does anyone know when One Scottsdale will be announcing their ancor tenates? I think that both Saks and Neiman would be perfect for the image the are going for.

Originally Posted by HX_Guy