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ASU Seeks Developer for 7.7M SF Mixed Use Project

By Eric Jay Toll for The Arizona Builder’s Exchange

District “Massing” Plan. Photo Credit: Courtesy of Arizona State University

Capabilities. Experience. Finances.  These are the three keys to unlocking the Phase I door for selected teams to develop Arizona State University’s prime 330 Tempe Town Lake acres. ASU invites teams to design, develop and build out its University Athletics Facility District (UAFD). The pre-proposal conference is set for 9:00 a.m., Tuesday, October 9.  Statements of qualification are due November 15. This RFQ/Invitation to Negotiate is the first step in a multi-year public-private partnership that may be the largest of its kind in Arizona. It may be the first of its kind in the U.S. ASU released the RFQ September 12th.

Arizona’s approach to financing major public university infrastructure through this type of program will be closely watched. Most public university-private partnerships result in land leases, privately financed and run campus housing, leased-back classroom facilities and stadium naming rights. The UAFD leases the acreage to one or more private developers and dedicates its equivalent tax base to building needed University athletic improvements.

Without this program, it’s highly unlikely ASU could raise the money it needs for the stadium renovations. It took two tries to get it through the legislature—an 2010 effort failed—and the concept still generates controversy and concern. ASU is pushing ahead because the sooner construction starts, the sooner the district starts putting money into the capital budget coffers.

The 330 acres incorporate Sun Devil Stadium and the Karsten golf course as well as the majority of the college’s athletic facilities. The project site fronts light rail on the south, Tempe Town Lake on the north, and straddles Rio Salado Pkwy. and Rural Road.

Photo Credit: Courtesy of Arizona State University


World Class Sustainable Development Expected

Although private money will build, maintain and operate the potential 7.7M SF of development, ASU expects its design mission to be incorporated into the process. On its website, the school’s lead development objective is “(b)uild(ing) a comprehensive metropolitan research university that is an unparalleled combination of academic excellence and commitment to its social, economic, cultural, and environmental setting.” This is a fundamental component of the ASU selection process.

With its envisioned “world-class ‘eco-district’,” ASU expects development proposals to incorporate state-of-the-art and futuristic sustainability practices. The RFQ references sustainability strategies prepared by Future Cities and Arup. These strategies suggest that sustainability applies district-wide, not just on a building-by-building basis. The university expects its successful partner to incorporate innovative sustainable strategies for design, transportation, waste management, resource use and utilities.

ASU published sustainability strategies for its “Rio Salado ecoDistrict.” The school envisions a 7.7M SF development with 5.1M SF of right-of-way reserved. The school precludes relocation of Sun Devil Stadium, Wells Fargo Arena and using certain land west of the APS power plant on the east edge of the golf course. All other existing development—including the golf resort–is open for demolition, relocation or redevelopment.

Three Phase Selection Process Makes Pick in 4 Months

ASU intends to conclude negotiations in early 2013 and expects development to get underway next year. The review and selection process is very tight considering the scope of the project. Key deadlines are in mid-November and January, with final interviews in late February.

After initial proposals are submitted in November, ASU intends to announce its short list in a matter of weeks and invite finalists to submit a business plan five weeks later. Developer capability will be a key review factor. The university is looking for developers with experience on 50+ acres and more than 1M vertical SF in a single project. Public/private partnership and higher education project experience and adds points.

The Phase II business plan submittal requires a $20K non-refundable review fee. Short-listed teams submitting are not guaranteed a chance to present at the February interviews. The Business Plan is essentially how developers will design, finance and build their project vision. ASU wants complete, stand-alone plans in their hands by mid-January.

Arizona State University Request for Qualifications: University Athletic Facilities District Key Dates

Phase I Milestones Deadlines
Pre-Proposal Conference October 9, 2012
Due Date for Phase I Responses November 15, 2012
Notification of Short List for Phase II December 7, 2012
Business Plans Due Date January 18, 2013
Notification of Finalists for Phase III February 1, 2013
Finalist Interviews February 14-15, 2013
Notification Exclusive Negotiations February 22, 2013
Exclusive Negotiation Period 90 days

Quick Dollar Returns Needed

An ASU official, in a no-attribution comment, said that the school is not interested in just awarding the contract and then watching plans sit dormant. The university wants construction to start as soon as possible because no money is generated until something is built. Officially, the school says it will work out a mutually beneficial schedule with the selected developer.

The university needs more than $300M to renovate Sun Devil Stadium and other athletic system upgrades. Fully developed, the district will need to annually generate more $13M from in lieu fees (see sidebar, In Lieu Fees)to pay for the renovations. While the 330 acres will not pay property taxes, the special fees generated instead of taxes can be used to pay down bonds or other financial instruments used for renovations.

Other PAC 12 schools have spent more than $1.3B upgrading stadia since 1998. Sun Devil Stadium was built in 1958, and was upgraded in 1976-77, and again in 1988. ASU says the repairs, maintenance and upgrades are necessary to remain competitive in the conference.

The school envisions the project as a complement to the Mill Avenue district in downtown Tempe. Some Tempe business leaders and officials have expressed concern that this dense a development east of college could draw leases and revenue away from Mill Avenue businesses.

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