Developers Ellman, Burton take different approaches
Scott Wong
The Arizona Republic
Mar. 20, 2007 12:00 AM
Steve Ellman and Rick Burton are your typical next-door neighbors: Behind all the smiles and pleasantries, they're still fierce competitors.
The two real estate heavyweights are constructing mammoth projects just north of University of Phoenix Stadium in Glendale that together will total more than 10 million square feet.
However, their approaches to these developments differ greatly.
Ellman, who is building the Westgate retail and entertainment district, which includes Jobing.com Arena, has steered the first phase of his half-square-mile complex from conception to completion. He now is moving on to leasing and management.
Meanwhile, Burton, who assembled the nearby 150-acre Zanjero project, anchored by outdoors outfitter Cabela's, has gradually relinquished control as he sells off individual pads to retailers, restaurants, hotels and other developers.
It's a question facing developers across the Valley: Should you sell and turn a quick profit or hold on for the long term in hopes that returns are higher over time?
There are other tradeoffs, as well.
In 2002, the Glendale City Council signed off on an agreement that outlines the conceptual blueprints for Westgate City Center. But it calls for the Ellman Cos., which is developing the 223-acre project, to seek city approval for any major changes along the way.
That has given Ellman greater day-to-day control over Westgate, but it means he often is faced with more red tape. Westgate's first businesses opened two years behind schedule, partly because of planning delays.
Ellman's decision to build and manage Westgate's commercial core is a high-stakes gamble, yet one he believes will yield greater dividends in the future.
"There's a lot more profit in what I do and a lot more risk," he said in a recent interview. "But I don't consider developing property risky if it's in the path of growth."
During the planning stages for Zanjero, Burton said, he played a crucial role in developing the layout, mix of land uses and overall character of the project.
Burton and city planners put their heads together to create a 100-page booklet of design guidelines governing everything from what kinds of trees to plant to color palettes. That has helped projects zip through the Glendale Planning Department whenever Burton's Rightpath Limited Development Group sells off individual pads. The sales guarantee him a quicker return on his money, minimizing his risk.
"Our approach is not to go it alone . . . but team up with other developers who specialize in office, retail and hotels," said Burton, who also owns property south of University of Phoenix Stadium and plans to build a ballpark village around Glendale's proposed Cactus League facility. "You get the best of the best."
Ellman's fingerprints
Ellman, too, has sold pieces of his Westgate to private companies and developers. AMC Theatres built a 20-screen cineplex that anchors the northern end of the center. Trammel Crow Residential is constructing two upscale townhouse and apartment projects just east of the hockey arena. To the west, John Q. Hammons Hotels Inc. is finishing work on a 320-room Marriott Renaissance hotel.
But Ellman's fingerprints are all over the project's most striking feature: Westgate's first half-million square feet, accented by vibrant color schemes, Times Square-style billboards and a Bellagio-inspired fountain.
Over time, Ellman believes, the entire sports and entertainment hub will come to be known as "Westgate."
"I am hoping the Westgate name prevails like Biltmore and Kierland. It should," said Ellman, who was instrumental in bringing the Phoenix Coyotes to Glendale, a move that eventually helped land a new Arizona Cardinals stadium in town.
"(Westgate's) the engine, the economic nucleus that created the driver of economic opportunity around the West Valley," he said.
Burton began buying up land along the Loop 101 corridor as the hockey arena and Westgate began taking shape.
Today, he has sold every parcel, large and small, at Zanjero.
Cabela's and a Cracker Barrel restaurant already have opened. Apartment projects and four hotels are under construction. Still left to be developed: two more hotels, a Native New Yorker restaurant, a 315,000-square-foot office park and an upscale urban village whose tallest buildings could tower 21stories.
Friendly rivalry
The two Phoenix developers share a friendly rivalry, perhaps more pronounced in this industry of enormous wealth, big machinery and even bigger egos.
Ellman characterizes Burton as a "land speculator" who "typically doesn't build anything higher than a curb." Burton prefers to view his company as Zanjero's "master developer," which has paid for roughly half of the cost of the project's roads, utilities and other infrastructure.
Burton takes pride in the fact that Cabela's broke ground long after Westgate, yet opened last summer - three months ahead of schedule.
Despite their competitive nature, the two businessmen said they have a mutual respect and understand the symbiotic relationship between their projects.
"Westgate and Zanjero use different approaches but, in the end, provide attractive, quality places to live, work and play in Glendale," said Brian Friedman, a city planner who oversees projects in Glendale's sports and entertainment hub at Loop 101 and Glendale Avenue.
"I appreciate both styles. There is a place for both."
LINK:
http://www.azcentral.com/business/ar...velop0320.html
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