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$126M Watermark to Start Construction

FIRST LOOK: Newly released renderings of Fenix Development’s Watermark project at Tempe Town Lake. Courtesy of Fenix Development, Inc.

By Roland Murphy for Arizona Builder’s Exchange

Tempe Town Lake’s latest major project – the 15-acre Watermark mixed-use development on the lake’s north side at Scottsdale Road and the Loop 202– is about to take off after nearly six years of planning, timing calculation and community interaction.

The city’s Development Review Commission approved Fenix Development Inc.’s request for an amended Planned Area Development Overlay at its Jan. 10 meeting and recommended the project to City Council for consideration.

When fully built out, Watermark will consist of 2.2MSF of office space, 63.5KSF of commercial, 993 multifamily units and 251 hotel rooms. The multifamily component, known as Aura Watermark, is under separate development by Trinsic Residential Group.

Both projects are scheduled for an initial vote by the Tempe City Council on March 23, followed by a second vote on April 20. Fenix Development Project Manager Mike Loretz said in a telephone interview he hopes for and anticipates a unanimous vote of approval. If council approves the plan, building permits will be filed April 21 and should be issued approximately 30 days later. Construction on Fenix’s component, known as Phase 1A, will commence as soon as possible thereafter.

The project was originally scheduled for a vote by DRC in June, but Fenix requested a continuance to allow Trinsic’s development plans to catch up and enable the two projects’ timetables to more closely synch.

1A is valued at $126M and will consist of two buildings, A and C, as well as portions of the overall site infrastructure. Building A will have a total building area of nearly 244KSF, with more than 25KSF of retail and restaurant space on the first level and nearly 220KSF of parking over eight levels, totaling approximately 104 feet in height.

Building C will offer 15 mixed levels totaling more than 569KSF of overall building area. Level 1 will feature more restaurant and retail, as well as an office lobby. Levels 2-7 will be additional parking, and 8-15 will be office space. Planned height for Building C will be just more than 224 feet.

Featured amenities include a splash pad similar to that found at Scottsdale Quarter; a Sky Lounge, bar, fitness center and conference center; a bicycle repair room and solar-powered phone charging stations.

All told, Fenix’s component of the Watermark development, which covers the entire plan with the exception of Trinsic’s multifamily component, will be constructed in three phases. The first, 1A will be delivered in fall of 2018. Phase 2 will consist of 360KSF of office and 20KSF of retail. Phase 3 is still subject to zoning. There is no hard timeline for phases 2 or 3. Fenix is currently seeking partners for the hotel component.

A Long Time Coming

Plans for the 15-acre Watermark development have been in place in various forms for more than six years. Originally known as “Hayden Harbor,” the initial proposal was recommended for approval by DRC in Feb., 2011 and approved by City Council in March of that year.

Loretz said the quality and complexity of the plan, combined with overall economics and the realities of supply and demand account for the amount of time passed between the initial announcement and the currently planned construction. With all the other projects that started on Town Lake around the same time, it was deemed prudent to hold off until that space was absorbed.

Now, however, “We see the success on the south end of the lake and the demand for Class A office space in downtown Tempe,” Loretz said. “So we see that we have an opportunity here to do something really special.”

Building Community and Partnership

Fenix has taken pains to coordinate with other developments in the area and the community at large to keep them abreast of the stages of progress and facilitate cooperation. “We have a good standing relationship with the neighboring community,” Loretz said. “We’ve hosted multiple neighborhood meetings and events for the community to come in and voice their opinions. We listened to what they wanted to see as far as retail and the site amenities, and we feel we have a very good relationship with our neighbors, both commercial and residential.”

Among the partnerships Fenix developed was selecting Okland Construction as the project’s general contractor from among a highly qualified pool of options. When asked why Okland was chosen, Loretz didn’t hesitate in delivering his response. “It was their reputation in the area with projects of similar size and scope to ours. We felt that they were the right fit to handle whatever might come up.”

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