Tempe Development Thread

[exit2lef]

Originally Posted by Jsmscaleros

My 2 cents: You now have two major shopping destinations in very close proximity, Tempe Marketplace and Mill Avenue, and absolutely nothing to distinguish the two except now Tempe Marketplace offers everything Mill has in a more easily accessible package with more parking spaces, more retail stores, a movie theater (huge piece now missing from Mill), frequent free concerts and events, and no hobos to scare the kids.

I think the concept of Tempe Marketplace is disgusting and a huge step backwards in terms of tackiness, unsustainable design, further promotion of a car-dependent culture, seclusion from everything that immediately neighbors it on all sides, and gross pandering to big-box retail with almost no local representation. But when you feed the people of this town exactly what they want in a retail and entertainment destination, how is the little guy going to compete?

To me, the answer is diversification. Mill Avenue must redefine itself in a way that does not put it in the same market pool as Tempe Marketplace. I think the pendulum has just begun to swing back in the direction of the ma' and pa' operated business; let Tempe Marketplace gobble up the business of those who want the same old merchandise from Best Buy or Bed Bath and Beyond, Mill Avenue should bring back live music, local retail, and promote - dare I say - Arizona culture. If they compete toe-to-toe by trying to lure back the same demographic as Tempe Marketplace, they will lose.

Agree 100% For the most part, those shoppers who always favor big box retail and chain restaurants also want abundant surface parking. There's no way Mill Avenue can compete for those shoppers barring some sort of peak oil catastrophe that makes driving impossible.

What Mill can do is offer a walkable environment well served by public transit. It's an ideal venue for indie shops, restaurants, and live music -- sort of like it was in the '90s. The question is if landlords along Mill are still shooting for premium rents, or if they're willing to come down to a level indies can afford in order to fill vacant spaces.

[Classical in Phoenix]

You're dead on about indie shops not being able to pay the high rents. Before its "revitalization", the lower rents, and the mom and pop shops, were what made Mill unique (IMHO). Unfortunately, I fear a lot of high dollar investors, i.e. REITS and insurance companies, have big money invested in the buildings along Mill, and probably can't afford to lower rents to rates affordable to these types of shops. It may take some of the buildings going through foreclose and being purchased at more reasonable prices than they were during boom times for the rental rates to come down..

[glynnjamin]

^ Which is exactly what is happening in PHX and preventing more stores from opening up ... high rents. $42 sqft to be in Taylor Place!? Who has that kind of money other than Jamba Juice, Starbucks, or Subway?

[ciweiss]

I think you guys hit the nail on the head. Lower rents a bit. Sure you may not make the money but at least you won't go into forclosure. Work out deals with artists, art studios/galleries, live music and an art night and farmers market. Sure Dtown phx has some of these things but this town is big enough for multiple events. Keep things low cost for people (and students) on a budget. Might as well reopen Harkins as a dollar theater.

[Classical in Phoenix]

If the theaters at Centerpoint did reopen, I would love to see art and foreign films incorporated in some fasion. Maybe one or two screens.

[JAHOPL]

Along with the Cityscape story in the Republic this morning posted in that folder, there was this on a proposed convention center in Tempe:

Tempe approves convention center plan
by Dianna M. Náñez - Dec. 17, 2008 12:00 AM
The Arizona Republic

Hoping to compete for convention business with Phoenix and Glendale, the Tempe City Council has approved a plan for a hotel and convention center across the street from Arizona State University in a coveted downtown location languishing in the economic downturn.

The action will allow a private developer to build a 328-room hotel, 95,000-square-foot conference center, stores and restaurants on a square block at University Drive and Forest Avenue.

Council members approved a change in an agreement with SAXA Developers, who abandoned a proposal for a 15-story condominium building on the site.

The University Square project is considered important to ASU, which would benefit by having a hotel and meeting space next to the campus.

The development would be financed by SAXA, which would receive a tax abatement from the city for eight years and would provide the city with 182 parking spaces.

The company hopes to secure financing within 90 days, to begin building by July and to complete the project within three years.

The biggest question about the proposal is whether it can succeed in an economic environment that has been devastating to other projects in downtown Tempe and elsewhere throughout the Valley.

Scott Turkington, SAXA vice president, said the developers realized in January that it needed to re-evaluate the market if it was going to survive the economy and the residential-construction crash. That, he said, led to a market analysis of what the area needed most.

"We . . . realized a convention center was critical to Tempe, University Square . . . (and) ASU," he said.

The convention space would be only a small fraction of the more than 900,000 square feet of event and meeting space available in downtown Phoenix, but it would be an improvement over what is currently available near the university.

Jim Riggs, SAXA president, said he drew his inspiration for the design from a similar center at his alma mater, Georgetown University.

"It was really the heartbeat at Georgetown," he said. "Here we have the airport (traffic) . . . the campus . . . there's demand for a convention center."

Despite the tight market, the development is expected to face competition.

A Paragon Development plan includes a conference center near Seventh and Mill Avenue, a block from the site of University Square.

Turkington said it is to be expected that more than one developer would attempt to bring a missing ingredient to a city as centrally located as Tempe.

Jay Butler, an ASU realty and development expert, said it would be unrealistic to think that developments with similar hotel and conference space and in such close proximity would both succeed, especially when the financial market has crashed.

"The question really is, can they get financing?" he said.

Despite that hurdle, Butler said the developers have hope of pulling off their project, given the lack of conference space in downtown Tempe.

"ASU has talked about a conference center for years. There was talk of putting one on the Research Park (in southern Tempe). But that fell through."

He added that the area is a prime urban location that could draw business from Phoenix or Glendale conference centers.

"You've got a downtown that in an urban sense is probably better than anything in the entire Valley," he said. "It's a nice place. There's restaurants, shops . . . places to walk."

Turkington said the project is aimed at competing with Phoenix and other Valley convention centers. He said SAXA has been in talks with Hilton hotels to build in the space and manage the conference center.

Lexie Van Haren, a spokeswoman for the Phoenix Convention Center, said that Phoenix welcomed the competition.

"Any attention or people or groups brought to Phoenix and the state of Arizona, that means that many more people are exposed to our wonderful metro area," she said.

Van Haren said the grand opening for Phoenix's expanded convention center next week would bring the Valley its largest space for conferences.

[HX_Guy]

University Square could bring convention center to Tempe
Phoenix Business Journal - by Jan Buchholz



Downtown Tempe will get its first convention center and hotel complex, if everything goes according to Saxa Inc.’s plans.

The Scottsdale-based company wants to build the $200 million, 1-million-square foot, mixed-use development on 3.2 acres north of University Drive between Forest and Myrtle avenues.

But there is an “if” involved. Paragon Gaming LLC, a Las Vegas-based development company, announced more than a year ago that it has plans to build a hotel, convention center and residential project right across the street. Thus far, Paragon has not done anything with its approvals and Saxa executives are optimistic that their project, which is not saddled with a large residential component, has a better chance of being built.

Tempe officials, meanwhile, are taking a wait-and-see approach.

The Saxa site is within a few footsteps of Arizona State University and Tempe City Hall. The Tempe City Council approved the project, which includes a 15-story hotel tower, during its Dec. 11 meeting. Construction is scheduled to begin in the second quarter of 2009, with completion projected for mid-2011.

According to Saxa President Jim Riggs, Hilton Hotels Corp. signed a letter of intent to be the hotel operator. The city of Tempe, Riggs said, has requested that the convention center be branded “Tempe Convention Center.” Saxa executives believe the project will be one of the few major developments started during the current economic recession.

“For the foreseeable future, this is going to be one of the largest projects in the Valley,” said Scott Turkington, vice president of Saxa. “It’s going to mean hundreds of construction jobs and 350 permanent jobs at the hotel. It will be an economic stimulus.”

However, like many other proposed and unfinished projects in the Phoenix area, University Square needs financing. Turkington said several lenders are interested now that the project has a name and was approved by the city.

“The level of interest has gone up dramatically,” he said.

Even so, some experts contacted by the Phoenix Business Journal say capital for large projects is practically non-existent anywhere in the U.S.

“To say that (money) is few and far between would be a complete understatement. Only the best projects are getting any kind of financing whatsoever and what financing they’re getting is at a price. It’s expensive capital,” said Suzanne Mulvee, senior real estate economist for Property and Portfolio Research in Boston. Mulvee was in town last week to speak at a National Association of Industrial and Office Properties event, and said that while she is unfamiliar with specific projects, she is familiar with credit markets throughout the country.

A local real estate investment expert agrees.

“I can’t speak to a project of that size, but I know that it is very difficult getting any kind of financing for ground-up development right now. A deal of that scale would probably be funded by an institution,” said Luke Bathel, chief executive officer for Cavan Commercial in Phoenix.

Many institutional funds currently are not giving real estate a second look and opting for other investments. “I have had a couple of conversations with institutions over the last 30 days and they are focused on buying triple A rate bonds whereby they are receiving upwards of 12 percent to 15 percent. Having said that, they are reluctant to take on the additional risk associated with acquisition/development, for a minimal increase in return,” Bathel said.

Riggs, however, is undeterred. He said contractors have been contacting him about the job, given that many are looking for substantial projects as the market downturn deepens.

“We’re getting lobbied pretty hard for it,” Riggs said. “We should have a contractor named by the end of first quarter.”

The newly approved project was revised significantly during the past year from a largely residential and office project to a hotel and convention center with street-level retail on University Drive. Riggs said it became clear in 2007 that downtown Tempe would not sustain additional condominium development, especially now that the nearby 350-unit Centerpoint project stands empty, bogged down in bankruptcy reorganization and minus funding to complete it.

“This is a completely different deal from what we first presented, but we realized last January that we had to reconfigure it,” Riggs said.

“The need for a convention center has always been at the forefront with the city of Tempe, too,” Turkington said.

Saxa purchased the site from two individual investors three years ago for $24 million. It was a hodgepodge of aging retail space and bungalows, which Saxa leveled to make way for its ambitious plans. Riggs believes the reconfigured plan will dovetail with the market when it is projected to rebound.

“It’s going to be perfect timing delivering this two-and-a-half years from now,” Riggs said.

Tempe Mayor Hugh Hallman said he is optimistic about the project being built because “Saxa has a solid reputation.”

Hallman pointed out, however, that the Paragon project also has approvals to build a hotel and convention center at Mill Avenue and Seventh Street.

“It’s going to come down to who has the most convincing story to attract investors,” Hallman said.

Chris Salomone, Tempe community development manager, confirmed that both projects are “competing for the same marketplace.”

The Paragon project, he said, was approved about 18 months ago, but because it also includes a significant high-rise residential component, the company has been reluctant to move forward.

Tempe, and much of the Phoenix area, are awash in housing supply, with few interested or qualified buyers. It could take several years for the current supply to be absorbed, according to some housing consultants.

Calls and an e-mail to Paragon were not returned by press time. Riggs and Turkington feel they have a leg up on Paragon since jettisoning the residential component from University Square.

Meanwhile, Salomone is not taking sides.

“It will be the market that will rule,” Salomone said.

UNIVERSITY SQUARE

Size: 1 million-square-foot mixed-use development

Location: North of University Drive between Forest and Myrtle avenues

Height: 15 stories

Hotel: 328 rooms

Hotel Space: 242,000 square feet

Convention center: 95,000 square feet

Retail: 111,000 square feet

Rooftop restaurant: 27,000 square feet

Outside deck: 9,000 square foot outside deck

Parking: 1,217 spaces

Developer: Saxa Inc., www.saxainc.com

Architect: Patrick Hayes Architecture

[Jsmscaleros]

That's nice that at least some people are trying to invest in the down economy. I'm starting to get rather sick of people refusing to act on anything due to market conditions, despite the fact that refusing to participate in a down economy will make things much worse.

But enough about the economy... I've been following the amusing yet sad story of that property at Myrtle and University for a while now and the whole lawsuit with the Dog House that ended up sinking the original condo plan slated for that area. I have to say that a convention center, hotel, and retail is not only much more practical, but far better for the economy than a hundred or so expensive condos that students will never get any use from anyway. Given it's size, ASU really would benefit from another hotel across the street, and the convention center would add a critical component to any city downtown (we can check off the Dunkin Donuts already, at least!).

Those who have lost their jobs would probably not share my sentiment, but the down economy has at least forced developers to re-think what an area actually needs instead of throwing money at the first project that comes their way. I think in the long run, this design plan is much more beneficial to the community than yet another condo flop tower. I just hope it can move forward.

Did I also mention the site's proximity to the College ave. and Veteran's Way METRO station? I think Light Rail is going to be bigger than anyone expected in this town - but that's another discussion!

[PHX31]

Good points jsms. That parcel, as well as the few empty lots that are north of the College street deli, south of (what was then) Fumbles, also need to be redeveloped. It's a great walkable area already, and with University Square, and anything else along College it will be even better... and well served by the light rail station right there.

[Jsmscaleros]

Some of you may have forgotten about this massive project - I like to think of it as Hayden Ferry II, since it will probably take 20 years to to completed:

Tempe South Bank (previously Tempe Pier 202) - North of Rio Salado, just west of McClintock at Tempe Town Lake
http://www.southbanktempe.com/

Anybody have any news on this? Best I've been able to dig up is their new website.

[ciweiss]

Originally Posted by Jsmscaleros

Some of you may have forgotten about this massive project - I like to think of it as Hayden Ferry II, since it will probably take 20 years to to completed:

Tempe South Bank (previously Tempe Pier 202) - North of Rio Salado, just west of McClintock at Tempe Town Lake
http://www.southbanktempe.com/

Anybody have any news on this? Best I've been able to dig up is their new website.

Cool video on their website. Looks good. They have been working on the infrastructure for about 6+ months now (roads/drainage/electrical). I'm sure we would start seeing buildings going up this next year - but in this economy who knows. Would love to see it though - it looks cool.

[Tempe_Duck]

At the Tempe Light Rail festival today Onyx had a table in one of the tents. The spokeswoman there said they have about 50 of the 195 units sold so far and that they are in the final stages of permits and the like. She also said construction is scheduled for spring of '09.

Centerpoint on Mill (NOT Centerpoint condos, their area was setup but no one was there.) was also there. They looked like they were trying to pitch the retail along Mill but the big news was about the towers. They claim to be still working on the future site where the movie theater is located and construction will begin in about a year. Haven't seen this around yet, there both a bit out so thinks probably will change, but wanted to get out what I learned.

[Jsmscaleros]

Anyone know if/when Hayden Ferry Lakeside office tower 3 will break ground? I feel like until this piece (right at the NE corner of Rio Salado/Mill) is completed, pedestrian traffic from Mill will never enter the Hayden Ferry complex. It would be really nice to one day see those ground-level retail units open for business, but right now they are so far recessed from the street that nothing would last more than a month in there.

[ciweiss]

^^^^
I thought it was supposed to break ground in 09. The reason is that the other buildings rented quick and they wanted to jump on the next. Not sure if that is still the case. It would be nice to see it go up soon to complete the corner. If done right that would be a nice area.

[nickkoto]

There was an unbelievably cool motorcycle stunt show at the New Year's block party and I tried to get a shot with Centrepoint as a background, but I just couldn't get my camera to cooperate.

[JAHOPL]

Downtown Tempe struggles, but optimism remains
by Dianna M. Náñez - Jan. 9, 2009 08:08 AM
The Arizona Republic

Reality has hit a slew of downtown Tempe developments as the economy freezes financing and puts major projects on ice.

But city experts remain optimistic, saying the downtown's assets - including the recent opening of light rail - will carry the central city through. And they point to surprising new second quarter numbers showing the best quarter for building ever in Tempe. Much of the activity is credited to construction on Apache Boulevard, on land along the light rail system.

While the city's most notable downtown projects have not been abandoned, construction schedules have been pushed back for several of them.
The 2009 construction date for a downtown Hyatt Regency hotel, which Mayor Hugh Hallman had projected and unveiled at his September State of the City Address, was set to get pushed back to 2010. On Thursday, the City Council reviewed Town Lake Development Partners' request for the postponed build date.

Also up for the council's consideration was the approval of a $4 million loan for Tempe RI, the developers of the Marriott Residence Inn near Fifth Street and Forest Avenue. The loan is an advance on a 15-year property tax abatement and would not be available until the hotel is built and is being touted by the city as a tool to help the developer to finalize financing.

Once considered a lynchpin for Mill Avenue's revitalization, the completion of Centerpoint Condominiums is mired in red tape as bankruptcy proceedings plague the developer, Avenue Communities' financier, Mortgages Ltd.

Some experts believe it's just a matter of time until the projects bounce back, considering the downtown's proximity to Arizona State University, Town Lake and light rail.

"We do need to give (the projects) that time with what's going on in the market. There's no question what we have in the lending market . . . is very unusual," said Chris Salomone, Tempe's Community Development Department manager. "But we're very optimistic. I think we'll come back sooner than the (Valley) region and even sooner than other parts of the country and it's clearly because of the assets we have."

While many businesses on Mill have closed in the past year, including the impending closure of Borders bookstore, the area is still seeing investors. In recent months a Dunkin' Donuts, several yogurt shops, a Vietnamese restaurant and a scooter retailer are counted among the new Mill merchants.

Dawn Bolt, manager for Campus Scooters near Seventh Street and Mill Avenue, said the owners of the shop, which opened in October, chose the site despite the downturn because of the built-in campus clientele.

"They decided on this location because it's the heart of Tempe and wanted to market the ASU students. And we see a lot of tourists," she said. "It was slow at first. But even in this economy we've really picked up."

Bolt said she thinks that the stores' ability to do well in a downturn is proof that once the economy improves the store will see a spike in sales.

Jay Butler, director of the Arizona Real Estate Center at ASU's W. P. Carey School of Business, recently said that although he doubted any of Tempe's downtown developers would secure financing soon, he said the downtown area remains an attractive development site. Butler said that investors who are interested in staking claim to the area will act to keep their projects alive, hoping for an edge when economy rebounds.

The slowdown is also providing opportunities for the city, Salomone said.

"We figure we've got a year where were going to be triaging," he said. "But were going to use that time wisely . . . really do some (development) planning. We'll look at the possibility of the trolley coming down on Mill, look at our relation to (Tempe Town Lake and the park), to ASU . . . downtown (merchants)."

And despite the downtown, Tempe got an unexpected economic surprise. A surprise that Chris Anaradian, Tempe's Development Services Manager, said is a sign of Tempe's ability to survive the nation's financial problems.

"We posted the best quarter (for building activity) ever," he said. "That doesn't mean it will stay that way. We were down the first two months (of the fiscal year). (But) what it does mean is that private investors are continuing to pull building permits in Tempe."

Anaradian said the development boost was a result of student-housing projects and other developments along Apache Boulevard. That area has seen a recent spur in development since light rail was targeted along Apache.

Tod Decker, the managing partner for Town Lake Development Partners, said Tempe's assets, are why during a slowdown, he was able in November to secure a development agreement with Hyatt for the Regency hotel.

He said pushing back the hotel's build date is due to the new agreement, but he acknowledged securing financing will be difficult. Working with longtime financing partners will help, he added.

"We're just waiting for more funds to be available in the market," he said.

[ciweiss]

http://www.tempe.gov/3Decades/PDF/12...0FlourMill.pdf

Check out the Hayden flour mill concept pick on the bottom right. That is about the coolest idea/plan I have seen in a while. It encompasses the flour mill all the way south to the light rail line. It would be awesome but probably a pipe dream in this economy.

[Sonoran_Dweller]

It looks pretty sweet. It would sure help bring people farther north to the Hayden Ferry complex, and Tempe Beach park.

[Jsmscaleros]

I'm not so jazzed how each of the proposals I've seen basically just surrounds the silo tower with glass-and-steel boxes that bear no resemblance to the original structure at all. I don't see how a historical site is preserved when it's architectural integrity is completely masked over... but that's just me. With the economy being what it is, I suppose I can still enjoy the appearance of the mill as it is now for at least another few years...

[combusean]

^ jsm, when you're making an addition to a historic building, the preservationists prefer that which is built new contrasts to that which existed there already.

the idea is that the historic aspects aren't masked, but simply exist on their own so you can actually still see what is historic and what isn't.

the best example I think is the mechanical additions to the rear of the Phoenix Union High School buildings on Van Buren.

personally, I believe in what I guess could be described as "expand as intended" and would think the whole mill would look a lot better reconstructed and expanded almost as if Hayden himself did the work in the 1920's.

here's a document from the National Park Service that details the standards: http://www.nps.gov/hps/tps/tax/download/additions.pdf