A new ownership group has major redevelopment plans for Metrocenter, which was once the largest mall in the Southwest.
Florida-based Concord Wilshire Capital and Florida-based TLG Investment Partners announced Thursday they are under contract to buy the property and plan to work with Hines on a $750 million redevelopment of the massive mall, at 9617 N. Metro Parkway West in Phoenix.
Nate Sirang, president of Concord Wilshire, said the company had known about Metrocenter for about 10 years, but in recent years became more interested in buying the property. In June, Concord Wilshire signed a contract with the mall’s current owner, New York-based Carlyle Development Group. The real estate transaction is expected to close in summer of 2022, and early construction work will likely begin at the end of 2022, with vertical construction in 2023.
“We were aware of the shortage of housing in the city of Phoenix and have been working around the clock to come up with a combination of uses for the site,” Sirang said.
The redevelopment plan, called the Village, will include 2,600 multifamily units and 100,000 square feet of essential and service retail. The plans also call for boutiques, retail stores, restaurants, bars, a town-center park, and other commercial and entertainment venues.
“This is an enormous economic boost to the entire west side of Phoenix,” Phoenix Mayor Kate Gallego said in a statement. “The connectivity provided by the light rail extension means easy access to shopping, entertainment, housing, and – perhaps most importantly – to jobs. In addition to the many construction jobs created by this redevelopment, there will be opportunities available to work in the businesses that will take root and grow in the Village. I am excited, optimistic, and thrilled that Concord Wilshire is investing in the future of Phoenix.”
Steve Betts, who is working on the project as an outside consultant for Concord Wilshire, said the new owners are stepping in like they did when they bought the Sheraton Phoenix Downtown.
“They saw a struggling asset in the community that a lot of people had been to, but no one had been able to figure out,” Betts said. “This is an opportunity to create an urban village with attainably priced housing.”
Betts said the light rail extension that is under construction crossing Interstate 17 and ending at Metrocenter gives the team an opportunity to create a multimodal transit-oriented development, and with the canal nearby, the team can use the canal as an amenity, like has been done in other places in the Valley.
“I have had so many potential buyers take a look at Metrocenter over the years, but it took an owner with a vision who saw Metrocenter as her true, iconic self, not ‘Wow, that’s a rough property,’” Christine Mackay, economic development director for the city of Phoenix, said.
'So many good ingredients'
Chris Anderson, senior managing director of Hines, said the company has a track record of creating walkable, mixed-use communities, and Metrocenter is an opportunity to leverage assets that are already in place, including the light rail and amenities that exist on the site, including the Walmart and nearby public library and Castles N Coasters.
“There are so many good ingredients that are already there,” he said.
Metrocenter itself includes 1.4 million square feet of indoor retail at Interstate 17 and Dunlap Avenue.
Metrocenter’s previous owners, Carlyle Development Group Inc., put together a redevelopment plan for the mall and went through a major rezoning process to allow new uses on the site including residential, medical office, office and smaller retail uses. However, Carlyle had been trying to sell the mall, which officially closed in June of 2020, for years.
Carlyle bought Metrocenter in 2012 for $12.2 million in a purchase that did not include the anchor stores. The former JCPenney store was purchased by a self-storage company, and the former Macy’s was purchased by Amerco Real Estate, the parent company of Phoenix-based U-Haul. The Walmart store, the self-storage property and the movie theater will remain on the site.
Mackay said Phoenix has a strong track record of redeveloping former malls and pointed at Park Central’s success at revitalizing the area beyond just the mall redevelopment. Mackay said before Plaza Cos. and Holualoa Cos. completed the Park Central redevelopment in midtown, midtown’s office vacancy was about 38%, and has since dropped to about 14%. She is expecting similar effects to the area around Metrocenter.
“It’s always exciting when developing new areas, but there is nothing more exciting than redevelopment,” Mackay said. “This will bring a benefit back to the central part of our city.”
Concord Wilshire Capital and TLG Investment Partners are also the owners of the Sheraton Downtown Phoenix, where they completed a $40 million renovation.
|
Prev