News Ticker

Light Rail Boosts Reuse, Development

Vacant commerical space floods the bottom level of this failed mixed-use project at Tapestry on Central and Encanto. Photo Credit: Rachel Kettenhofen/Arizona Builder’s Exchange
Photo credit: Rachel Kettenhofen/Arizona Builder’s Exchange

Photo credit: Rachel Kettenhofen/Arizona Builder’s Exchange

By Luci Scott for Arizona Builder’s Exchange

There is lively interest among developers in revitalizing the area along the Metro Valley light rail to provide more housing choices and additional jobs, says Curt Upton, project manager in Phoenix’s planning department and for the coalition Reinvent Phoenix.

“What we’re seeing in Phoenix and nationally in terms of real estate market trends is a lot of demographic changes as Baby Boomers retiring and millennials now entering the real estate market create a greater demand for walkable neighborhoods,” he said.

That means smaller housing units and less demand for huge back yards as people look for access within walking distance to amenities such as a restaurants, grocery stores, parks and entertainment destinations.

More transit-oriented development sought

The city encourages greater intensity of use, which means multi-story if that’s appropriate, and parking garages if that means less land consumed by asphalt.

Upton would like to see more transit-oriented development, like Portland Place condos and the adjacent Roosevelt Square, a mixed-use project at Central Avenue and Roosevelt that has apartments over retail.

“Another great example is Devine Legacy at Central and Campbell, a mixed-income apartment building with a transit-oriented design that contains both affordable units and market-rate units,” he said.

The market-rate units are doing better in terms of leasing than the affordable units, which belies the skepticism that people would not opt to live in mixed-income apartment buildings.

Development along light rail doesn’t guarantee occupancy

Some projects are not doing as well, including Tapestry at Central and Encanto, where apartment are rented but the ground-floor retail space is vacant – a case study of what not to do with a mixed-use project because of design flaws.

The sizes of the ground-floor retail spaces aren’t suited to the market, and the glass windows are blocked by utility cabinets and ventilation units, which hinder visibility. All of that limits the number of restaurants and other businesses that might be interested.

The vacant parcels scattered along the light rail on Washington have remained undeveloped because many are in industrial areas. Some spots on Central have been vacant for decades, largely because of zoning decisions in the 1970s and ‘80s. Many of those property owners had visions of high-rises.

High-rises are prohibitively expensive to build and property owners often expect higher prices for their land than the market dictates. As a result, many owners are holding onto their land.

Great opportunities exist

Upton said that great opportunities exist not only for the real estate industry and the city to provide people choices of living in walkable neighborhoods.

“If Phoenix can start producing some of these walkable communities, it will be not only a better place for residents, but the city also will be more attractive to people throughout the country looking for a place to live and work,” said Upton.

From a quality-of-life perspective, light rail provides real opportunity for the real estate industry and the community, he said.

Businesses follow light rail in Mesa

Mesa has embraced light rail, and development has followed the new line, which goes down Main Street to the Sycamore station near Dobson. Two extensions are in the works; the first, which runs from the Sycamore station 3.1 miles east to Mesa Drive, is under construction and expected to be completed within nine months.

The other extension, in the early planning stages, will go from Mesa Drive east to Gilbert Road, a stretch of about two miles.

“We have seen both residential and commercial development that has sprung up, and light rail has been mentioned as a significant part of the decision-making process,” Joachim said.

Mesa renovated 42KSF of a 53KSF former city courthouse to create the Center for Higher Education, where classes are offered by Wilkes University and Benedictine University, both of which mentioned light rail as being a key factor is their decisions to locate there. Some vacant space remains available in the building.

Several residential projects have emerged, inspired by the proximity to light rail. They include Encore on First, a development at First Avenue and Center Street, and the Residences at Center Street Station, which was the first large private investment in downtown in more than 20 years. A new 81-unit senior-living complex is located nearby on First Avenue southwest of the Mesa Arts Center.

Other projects in Mesa include the low-income Escobedo at Verde Vista, 435 N. Hibbert, where 70 units in 16 buildings are occupied, and 62 more units in 13 buildings will open for occupancy this summer. Potential residents for phase two have been on a list since August 2013.

Adelante Health Care Center, 1705 W. Main St., boasts that it provides everything a family needs to get and stay healthy. One stop can take care of family and internal medicine; pediatrics, women’s health care, family dental and an in-house lab, pharmacy and café. The Adelante building is certified a LEED platinum structure, and among the reasons it received the high rating was because of its proximity to light rail.

In the planning stages are the mixed-use West Main Station Village, 1350 W. Main St., and La Mesita Apartments, 2254 W. Main, which offer low-cost housing. That community rose from a crumbling old motel used as a homeless shelter and now is a four-story complex developed by the social-service agency A New Leaf.

The $30M Barry and Peggy Goldwater Library and Archives is planned for the southeastern corner of Macdonald and First Avenue in downtown Mesa, if the private foundation spearheading it can raise the funds.

Cori Garcia, marketing manager for the Downtown Mesa Association, said the advent of the light rail line from Sycamore east to Mesa Drive has been a boon to her city’s downtown.

“We have seen a lot of interest from developers and business owners in coming to downtown,” Garcia said. “It’s an exciting time.”

Four new businesses have opened on Main Street in the past year and two more are scheduled to open this month in anticipation of the extension opening this fall. Those businesses are Nebula Vaping Lounge; Asylum Records, which offers a lot of vinyl and vintage albums; a restaurant Margarita’s Grille; and Lost Dutchman Coffee.

Once the light rail extension opens, there will be a stop near Country Club Drive, one near Center Street close to the Mesa Arts Center and the city buildings, and a third stop at Mesa Drive.

Opening this month are Flickables, an ice cream sandwich shop that is expanding beyond its original site near ASU in Tempe, and a cookie shop, Smitholater.

“Light rail was a major influence in most of those openings,” Garcia said. Flickables and Smitholater are coming specifically to be near light rail.

Big businesses are being sought as well; the mayor and the city’s economic development staff have been meeting with developers about vacant lots and vacant buildings to talk about revitalizing those structures to make way for big businesses.

“We’re super excited to have light rail down here and to be connected to the rest of the Valley,” Garcia said. “Downtown Mesa sometimes is forgotten, and it’s going through a revitalization and rebranding. It’s really going to open eyes in the next couple of months.”

Light rail spurs adaptive reuse

Light rail has prompted adaptive reuse of existing buildings, which boosts the economy, says Kimber Lanning, executive director of Local First Arizona.

“We had a lot of buildings that were blighted and abandoned that are now generating revenue and have vibrant new businesses in them.

That type of infill is healthy for a city and lends itself to a diverse and resilient economy, Lanning said.

Adaptive reuse has been boosted not only by light rail and the people it carries into neighborhoods, but also by Phoenix’s streamlining the process that allows businesses to move into old buildings more quickly and at less cost.

Examples include the new restaurant St. Francis at 111 E. Camelback, a former old office building, and The Newton at Third Avenue and Camelback, the former, long-vacant Beefeaters. The grocery store and restaurant at the Phoenix Public Market downtown east of the farmers’ market tents is also an example of successful adaptive reuse.