| ASU Diablo |
Nov 28, 2022 5:31 PM |
How Metrocenter redevelopment, light rail extension could benefit AZ chip industry
Moving forward...breaking ground next year!
https://www.bizjournals.com/phoenix/...l-castles.html
Quote:
Developers of the $1 billion Metrocenter Mall redevelopment project are set to move forward with purchasing the 80-acre site and demolishing most of the buildings by next year.
Florida-based Concord Willshire Capital LLC and TLG Investment Partners and Texas-based Hines received the final approvals needed from the city of Phoenix for a tax incentive agreement, or Government Property Lease Excise Tax treatment, last week.
This means the developers will lease the property from the city for 25 years once it's built and pay an excise tax that's lower than what the property tax would be for the apartment complexes. Right now, the site produces $500,000 in property taxes, while the new development will produce $2.5 million to $3 million annually in excise taxes through the GPLET, said Steve Betts, a consultant for the project who is also a managing director at Holualoa Cos.
"The reason that's important is that trying to redevelop an old mall like this is not for the faint of heart, it is very expensive to be able to demolish and do all of the abatement work and untangle the spaghetti of infrastructure under that existing mall and then be able to put in new infrastructure," Betts told the Business Journal.
The decrease in taxes for the apartments will help offset costs associated with asbestos abatement, demolition and removal of existing infrastructure, Betts said, adding that the costs and difficulty of taking on a project of this scope is what prevented companies from wanting to redevelop the site for 10 years.
Potential rapid bus could connect TSMC workers to light rail
Betts said this location is a "prized" transit-oriented development site due to the multi-modal transportation options such as a rapid bus link and planned elevated light rail station and expansion. Also notable is the fact that the site is close to the planned Taiwan Semiconductor Manufacturing Co. factory, he said.
"We're talking to the city about having rapid bus connections from this urban village to the north to provide worker transit to the Taiwanese semiconductor and their supplier plants," Betts said. "This urban village, which will have 3,000 dwelling units and potentially 5,000 workers, would have the ability to hop on light rail to go south into the center city or hop on a rapid bus route and go north to any of these employers that are now under construction."
In May, the first development agreement was approved to reimburse the developer for construction of parking garages. Now, the development team is preparing to close on the mall property, start asbestos assessment and demolish the buildings in the first quarter of 2023. Site work will continue through 2023 so it's ready for apartment construction to commence by the end of next year, Betts said.
In total, the current plans for the redevelopment include approximately 2,850 apartment units, including potential condominiums, a minimum of 100,000 square feet of retail space, two hotels and a public park and plaza. Betts said the apartments will be within the 80 to 120% of the area median income-range, while much of the new retail at the Village will feature services and convenience stores.
"We're trying not to inappropriately impact the wonderful existing retail that's right around us," Betts said. "We have a number of other high-quality restaurants and retailers right along Peoria right outside our door step."
The existing Walmart Supercenter will remain at the site and be attached to the town center, while the existing self-storage facility will also stay.
Construction impacts: Developers working with businesses
With both the light rail extension and ongoing Metrocenter redevelopment project underway, one business in the area previously raised concerns about potential impacts of construction.
This summer, Metrocenter's neighbor, the longtime Castles N' Coasters, sent a letter to the city with fears over construction in the area affecting the park and the future Village project negatively impacting its business.
Betts said the developers hadn't met with Castles N' Coasters before it sent a letter to the city but have since sat down with the owner to address his concerns.
"Now that we've had an opportunity to meet and spend almost two hours talking through the project, all the details of the project, we believe he is very supportive now, because we will be bringing many quality patrons to this project," Betts said, adding that Castles N' Coasters' main concerns were accessibility and visibility during construction and security. "We assured them, [safety] was our No. 1 issue, that we are in fact going to have security ... we are in the process of negotiating for a police office that's part of our town center that we would donate."
Jeff Stapleton, the program manager for Phoenix's transit oriented development, said the city wants developers to have a "great relationship" with properties around them and that the developers of Metrocenter helped fund a community organizing effort to engage more businesses and property owners in the area.
Betts said Councilwoman Ann O'Brien's office set up a series of meetings with business groups in the area and that the developers and the city jointly funded an outreach person to give businesses and property owners a voice in improvements as the project progresses.
Light rail expansion: Set to open by 2024
A key piece of the Metrocenter redevelopment is the Northwest Extension II of the Valley's light rail system, which first opened in 2008 and has expanded to 28 miles of rail and three miles of temporary streetcars.
One of Valley Metro's two active construction light rail projects includes the Northwest Extension Phase II and an expansion into south Phoenix, a total of seven miles of active construction.
The Northwest Extension will extend the light rail west on Dunlap Avenue from 19th Avenue and then north on 25th Avenue and across Interstate 17 at Mountain View Road and ending west of the freeway at the former mall site. It will also include three stops along the extension and a park-and-ride location at the former mall site.
"This is pushing another mile and half into northwest Phoenix to connect communities and give them another option," said Trevor Collon, Valley Metro's deputy director of construction. "We've [also] seen consistently that economic redevelopment does happen around our light rail corridor, so that's an ancillary benefit as well, that people are interested in living and working around the stations."
As of November 2022, Collon said the $401 million Northwest Expansion II is about 60% completed. It's expected to open in early 2024 and help connect West Valley communities to Phoenix.
"If you've been out there or had the opportunity to be around it, you're going to see a lot of visible progress in the last year or so," Collon said. "We've connected our bridge over the I-17. Every single one of our three new stations have gone into the air."
In the summer of 2023, Valley Metro said the project will appear completed, but during this time the agency will be testing the light rail to make sure all of the systems are working. In addition, the light rail station platforms will feature artwork from seven artists, Valley Metro said. This expansion project also includes an elevated light rail station, which is the first in the Valley metro system, a parking garage, and a transit center for buses underneath the platform, which is where Metrocenter's existing transit center will be moved to.
It will also have a direct connection from the garage to the elevated station, so people can park and walk across to the station on a bridge, he added. To date, the expansion project has hired more than 1,500 workers including engineers, construction workers to public relations and real estate professionals.
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