News Ticker

Healthcare Part of Metrocenter Redux

Map courtesy of City of Phoenix
Photo courtesy of GPE Commercial Advisors

Photo courtesy of GPE Commercial Advisors

By Roland Murphy for Arizona Builder’s Exchange

Once a national flagship for retail space in city environments, Metrocenter in Phoenix had begun to fade even before the Great Recession ravaged the local and national economies.

Carlyle Development Group has a plan in place to revitalize the facility and bring a myriad of new commercial opportunities to the area as part of an ambitious redevelopment program (AZBEX, June 26, 2012).

Currently zoned for retail, Carlyle is working with the City of Phoenix to get a PUD approved and put in place by the end of June that will open up the area for a much greater variety of uses, providing businesses and the community a greater range of options than currently exists.

One market specifically being explored is healthcare. Working in conjunction with GPE Commercial Advisors, Carlyle is looking to bring in healthcare-related operations as one option to occupy the 150,000 square foot former JC Penny building on the mall’s west side in addition to PAD space that may be developed after the zoning changes are approved.

According to Julie Johnson, Executive VP at GPE, changes to the healthcare industry in recent years, including passage and implementation of the Affordable Care Act, have opened up a range of commercial real estate needs and opportunities far beyond the traditional hospital campus.

Warren Fink, Chief Operating Officer for Carlyle, is enthusiastic about healthcare and the range of other potential uses for Metrocenter space. He says there is an outstanding opportunity to retrofit the Penny’s building into a healthcare space, corporate offices or a number of other uses.

“Market demand will dictate what uses go there,” he said. “GPE is examining various healthcare opportunities, and there’s a strong potential there. There are a lot of healthcare operations north on I-17, and a lot further south, as well. We feel there should be a demand for health facilities here, and when you have a demand for those, that will trigger other spaces like medical offices. We feel there’s an overall need.”

Johnson agreed, saying the industry and its accompanying services now incorporate a range of uses and patient needs that fall between the traditional doctor’s office at one end of the care spectrum and full-blown hospital care on the other.

Healthcare Only One Component

With the planned rezoning from retail to multi-use, Fink and Carlyle see a vast range of opportunities for Metrocenter.

“This is a fully urban area at this point,” Fink said. “After years of watching the demographics change, to our mind this should be a mixed use, not just a retail, space. We’ve worked with Ron Altoon of Altoon Partners to develop a vision of how these uses can be put together to fit the vision of housing, senior living, retail, office, medical and other uses to benefit the area, and we continue to work locally with Rick Butler of Butler Design Group.”

Updated retail, transportation and community are three key components in revitalizing any space like Metrocenter. Plans are already under way to modernize the retail and infrastructure, and support for the projects has been strong.

Details are nearly complete for Walmart to build a new Supercenter in the space formerly occupied by the Broadway building on the property’s south side. The store is expected to open in 2016 and will provide both a fresh commercial anchor and a proof of concept for other businesses, from retailers to corporate office space planners and others, that locating at Metrocenter again makes sound business sense.

“One of the focuses we’ve had from Day One was not just to put a Walmart in Metrocenter, but a complete redevelopment,” Fink said

Toward that end, Carlyle worked diligently to support the light rail expansion to Metrocenter, and their efforts were rewarded. “The City is a major supporter of our efforts,” Fink said, “including the push to expand light rail to the ring of Metrocenter. That’s going to be a major urban push” (AZBEX, March 13, 2015).

Fink is grateful for the support Carlyle’s revitalization vision has received both from the City of Phoenix and the surrounding Metrocenter community. “Community leaders are nothing but encouraging. Metrocenter has had some major ups and downs in the last 10 years, and the market just fell through the floor economically. Anything we can do here is supported by the community and the city, and the value of that support can’t be overstated.”

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