By Roland Murphy for AZBEX
A new adaptive reuse project in Mesa could rehabilitate a vacant four-story medical office building and add a new three-story structure at 560 W. Brown Road that, when completed, would deliver 103 new apartment units.
The Mesa Board of Adjustment voted 6-0 at its December 1st meeting to approve a Substantial Conformance Improvement Permit request from Phoenix Devco LLC.
Area Overview
The area is ripe for redevelopment and renovation. An overview report using data from Yardi Matrix shows the three-mile area around the project site has been as hard-hit as everywhere else by the current affordability and apartment supply crises. Yardi’s inventory count shows 11 multifamily properties totaling 2,829 units.
Yardi reports a median household income of $42,916 for the three-mile area, with a median age of 32. For comparison, the U.S. Census Bureau’s most recent estimate sets puts the median household income for Mesa as a whole at $58,181 and the median age at 35.9.
Occupancy as of December 8th stands at 96.8%, a negligible decrease from Q3 2020 peak of 97.6%. Average area rent is $1,572, an increase of more than 28% since Q1 2020 and 17.3% since the beginning of 2021. The average property has a B- rating, and the median home was built in 1978.
More than half (58%) of households in the three miles surrounding the proposed site have median incomes of less than $50K, with 20% earning less than $20K.
The project sits in the 85201 ZIP Code area. DATABEX shows 85201 is relatively popular for multifamily developments at the moment. 
Not including 560 W. Brown, DATABEX currently lists 15 private development projects totaling 2.2MSF and $668M in construction costs. Of those, 10 are multifamily or mixed-use with a multifamily component. The estimated unit count is 1,376*, totaling 1.88MSF and $435.9M.
The project total is not quite as rosy as it might appear at first glance, however. Of the 10 multifamily projects in 85201, four are listed as On Hold. These comprise 429 units totaling 476KSF and $182.5M.
What’s Proposed?
According to the project narrative submitted with the request, the 40-year-old, 74KSF MOB currently on the site is “largely vacant.” The developer believes, however, the building’s concrete and masonry construction make it a good candidate for adaptive reuse and restoration. The overhaul will enhance the façade and fully renovate the building interior to create 64 apartment units and a lobby area with a fitness center.
The new 58KSF second building will include 39 residences. Planned amenities for the site include a dog run, pool, barbeque area, and dining and other seating space.
The proposed unit mix calls for one studio, 41 one-bedroom and 61 two-bedroom apartments.
One current surface parking area next to Brown will be replaced with a landscape buffer which also includes “a new meandering public shared-use path connecting the public and residents from Brown Road to the Crosscut Canal Trail to the north.” There also will be a north-south pedestrian corridor crossing the site from the canal to the new apartments to provide easy access for residents and guests. Most of the asphalt immediately adjacent to the canal will be removed and replaced with new landscaping.
The SCIP request sought several variances from current standards to accommodate the site’s age and the proposed change in use. Specifically, the developer requested reduced setbacks, reduced parking space and landscape island sizes and an allowance for increased building height. The allowable building height for residential multiple dwellings in the area is 40 feet. The existing building is 53 feet tall and, thus, needed the exemption. The new building will be within the height limits.
In examining the proposal, Mesa staff found the project did not introduce any new conditions that failed to comply with zoning and development ordinances and that forcing compliance across the board would require significant alterations that would discourage redevelopment.
