News Ticker

NE PHX Quietly Abuzz with Development

Credit: Desert Ridge Marketplace

By Roland Murphy for Arizona Builder’s Exchange

For years Downtown Phoenix and anything near the light rail line have gotten the lion’s share of coverage when it comes to growth and development. As, probably, it should have.

While generating something like $9B of new development since the start of light rail certainly warrants extensive attention, other parts of town, while not ignored, have, perhaps, not gotten the recognition they otherwise would have.

In this issue, we’re going to take a look at some of the planned, executed, expanded and ongoing projects in northeast Phoenix. Keep in mind, this is a representative look and is neither intended nor able to feature every pad and project. The very fact that we had to omit so many smaller, but still significant, projects gives proof in and of itself that this region is ablaze with investment and potential.

EXPANSIONS/ESTABLISHED PROPERTIES

One place to start examining growth in a given region is to check out who is already there but expanding. Northeast Phoenix has no shortage of these projects.

Desert Ridge Marketplace 

Back in February, Vestar announced a $15M expansion and renovation for Desert Ridge Marketplace, the well-established outdoor mall and anchoring center of the area on Tatum Boulevard just north of SR 101.

Like many modernization efforts, plans called for an update to exteriors, a drive to bring in chef-driven restaurant concepts, improved and enhanced amenities and more options for both new and established users and customers.

It’s indicative of the area’s growth that while many malls and retail centers are losing tenants and scaling back, Desert Ridge has made such a significant investment in enhancing its services and destination amenities.

Sagewood 

Sagewood is, perhaps, the definition of an unobtrusive development. The independent senior living community, tucked quietly behind the Musical Instrument Museum at Tatum and Mayo boulevards, announced in February it had secured $108M in financing to expand its offerings and facilities.

Originally opened in 2010 with 292 residences, and tucked well away from the hustle and bustle of Tatum, the assertive expansion called for creation of both residential and facilities enhancements to be known as The Estates Neighborhood Expansion Project. The plan has three components, all of which are expected to be finished by Q1 of next year.

According to representatives of The Weitz Company, the GC leading the effort, the three pieces are as follows:

Multipurpose Building: A new 16KSF multi-purpose event facility with a performing arts area and meeting rooms for residents to enjoy concerts, lectures and special events. This will also include 60 more parking stalls. This section was started in February and will be finished in Jan. 2018.

Casita and Villa Homes: 24 luxury casitas, of both single and duplex-styles, offering open floor plans with vaulted ceilings. They may also include covered patio with outdoor cooking areas. “The villa homes are designed as a small community with eight, one-level villas in a two-story building. The building will have a large central lobby, community room and gathering spaces for friends and neighbors,” according to Weitz.

Included in the expansion and enhancement in this component is a redesign of Sagewood’s main entrance located off Mayo Boulevard.

The project was begun in February. Completion will be in phased through January, February and March of 2018.

Assisted Living: A new two-story, 45KSF assisted living building will connect with the Acacia Health Center, built by Weitz in 2009 and expanded in 2016. Delivery is expected in February 2018.

City North/High Street 

Every boom story has at least one component that lags behind through no real fault of its own. City North, rebranded as High Street, is NE Phoenix’s contribution.

With phase one opening in November 2008, what was supposed to be a visionary, groundbreaking foray into mixed-use modernization in North Phoenix hit a number of walls almost immediately due to the economic collapse.

“The only thing that stopped that from blossoming was the economy,” said Jim Fijan of CBRE, who was involved with the original project. “You had department stores and tenants lined up but they just couldn’t get the financing. Had they, City North would be a booming project right now.”

After getting its legs knocked out from under it nearly from the start, the development has struggled to regain its footing. Ground floor retail spaces seem to close nearly as quickly as they open. Some upper level spaces can, from the street level, be seen to be unfinished shell.

Commenting on the ongoing degree of storefront churn, Fijan said, “They can’t get their identity right now. I think from an office standpoint, their office space is well leased. The retail seems like it’s a turnstile. Still, a lot of tenants are trying to make themselves fit in that location. The original lineup of tenants all aligned themselves with department stores, and when those department store deals blew up, all those tenants left. Then it was a matter of starting over, and they’re still having a hard time figuring out what the best lineup is.”

In the spirit of hope springing forever eternal, however, there are still more new and expanded development plans in store for the site. According to representatives of JLL, which holds the real estate marketing agreement for High Street-related activities, there are plans in the works for phase II of office space and a new hotel in the future. Time frames and development teams for both are still under consideration.

Henkel Building 

While it’s technically NW Scottsdale, the Henkel Building’s iconic architecture and massive footprint significantly affect plans on the west side of Scottsdale Road and well into Phoenix.

The distinctive Henkel Building at Scottsdale Road and SR 101 officially went to market this month. Henkel, headquartered in Dusseldorf, Germany, acquired another firm in Connecticut and decided to consolidate operations there, rather than shuttling executives from Germany to the East Coast, to Phoenix on a regular basis.

CBRE is handling the listing. The company’s press announcement states, “The approximately 368KSF property encompasses 262KSF of office space, 106KSF of R&D space (convertible into a variety of uses including office space), a cafetorium – a combined cafeteria and auditorium space, and a three-level, 1,000-space subterranean parking garage.”

Developer DMB, who is creating the One Scottsdale mixed-use project immediately north of the site, assisted in its original development, according to CBRE’s Fijan, half of the CBRE investment team marketing the site.

Fijan is excited about its potential. “We’ve had everything from potential museum use to biotech companies, investors and a range of other potential users looking at it,” he said. “There’s about 60KSF of other tenants occupying space right now. Whether that continues into the future remains to be seen, but that’s part of the package that comes with the building.”

He continued, “There’s R&D space, lab space and a lot of specialized uses, but at the same time, that can be converted from what it’s being used for right now. It could be conventional office space, creative office space or other types of uses a particularly tenant might need it for.”

There had initially been a fair amount of speculation that DMB and Ryan Companies would be obvious candidates to snap up the building and property, but Fijan dismissed that notion.

“That’s not their MO,” he said. “They’re ground-up developers and they’re mixed use. This is more of a specialized building, although it lends itself to a lot of uses. It’s primarily an office building with lab and R&D space. We’re hoping we can align a user because of the amount of money that was spent on the space, which is an incredible space.”

Despite the fact that ASU, Mayo Clinic and the City of Phoenix are aggressively pursuing the Arizona Biomedical Corridor vision along Mayo Boulevard (See Page 1), neither Fijan nor his colleague Will Mast see that as, necessarily, a hindrance because of those efforts’ yet-to-be-determined timelines.

“We’ve had a little bit of activity because of the unknown future of what’s going to be happening there,” Mast said. “Some of the tenants that were looking in that direction may be looking at us. We’ll see how that continues to play out over the next several months.”

IN DEVELOPMENT

Several massive undertakings are in various stages of development in the area including what is currently the Valley’s largest planned multifamily community.

Camden North End 

In April, 2015, Camden Property Trust was the sole bidder for on 49.6 acres at 64th Street and Mayo. The company paid $35M for the land, infrastructure reimbursements and planning fees. Camden North End is currently in the first phase of construction, which will produce 441 luxury units in a four-story building. When all planned phases are built out, the site will comprise 1,069 apartments, which makes this the largest multifamily development currently under plan in the entire Valley.

ON HOLD

Shea at North Tatum 

While few of the proposed NE Phoenix projects have faced much opposition, that was not the case when Shea Homes submitted a proposal one year ago today for the massive Shea at North Tatum development on 114 undeveloped net acres on the SEC of Tatum and Grovers Avenue, between Bell Road and Union Hills Drive.

The Planned Use Development called for, “A maximum projected density of approximately 550 single family homes, 1,044 multifamily residences, and 295 age-restricted (+55) homes. The anticipated housing types include traditional single family detached homes, detached court homes, duplexes, stacked flat condominium, and apartments, which will accommodate a wide range of incomes and lifestyles.”

The majority of the surrounding area east of the site to 44th Street and north to Union Hills is single family residential developed between 1990 and 2005.

The site has one large multifamily development immediately to its south abutting Bell Road and two more directly opposite on Tatum. A significant percentage of these residents are workers at nearby financial and technology companies, which has led to tensions about additional multifamily development in the area due to the relative brief periods of occupancy by tenants.

The outcry from single family residents in the area was immediate and vocal. Social media commentary about the project, particularly on nextdoor.com, was extensive and nearly universally opposed. Residents made plans to pack planning meetings and discussions, as it was widely believed the scale of the development would significantly alter the character of the neighborhoods into which residents had made long-term investments.

Those meetings never took place, however. Other than the Planned Use Development submittal, no further action has been taken, according to the City of Phoenix website. Residents speculate unofficial preliminary discussions may have made the developers doubt its likelihood of approval, given the density and projected additional traffic generation of up to 11,788 vehicles per day.

While no movement has taken place since the PUD submittal, the project should not be considered dead. When contacted by email for a status update on the project, Jason Morris of Withey Morris, PLC, who is serving as Applicant/Representative for the process, told AZBEX the project has been put on hiatus but that he expects to have more news by the end of the summer.

The View from the Top

As one would rightly expect from one of Phoenix’s primary boosters, Community and Economic Development Director Christine Mackay is exceptionally enthusiastic and upbeat about the area’s future. Interviewed last week for this story, she had no shortage of upbeat news and predictions.

“When you look at that area, it is really coming on strong, she said. “Really, the reason is because you’ve got this incredible and incredibly educated, well-qualified workforce right there in the area.

“The employers and developers that we’re working with have really started to realize what that North Phoenix presence and that qualified workforce really means,” she continued. “We are seeing really good interest from not only development opportunities but from end users who are taking advantage of the quality of life that’s in that area.

“What we’re finding is that change is starting to happen in creating great local opportunities – local restaurants and services – that are taking over formerly occupied space and expanding into that area. They’ve realized their constituency is there as well. Ultimately, you’re going to see 20-30,000 jobs from Scottsdale Road to the (State Route) 51 on either side of the 101.”

NOTE: Paid subscribers receive additional project details in our twice-weekly PDF publication, including project stakeholder information and valuable project bidding leads. Find out more about AZBEX subscriptions or contact Rebekah Morris at rmorris@azbex.com or (480) 709-4190

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