By Roland Murphy for AZBEX
“Those Omninet projects have been a pain… since 2016.”
Such was the response when I asked the BEX Research team about a project I couldn’t immediately find in DATABEX after it was mentioned in a local news article.
When I ask researchers about a project, I try to include as much background as possible so they don’t have to dive too deeply to find answers. I found this project on our outstanding projects sheet of items that are on our radar but haven’t made it into the database yet. I also found a similarly named project that looked as though it should have been an associated development but, by all initial appearances, was not.
Thus began our cross-department trip down a sad rabbit hole of what rightly should have been a trio of slam dunk developments planned for one of the Valley’s highest “sex appeal” rejuvenation and revitalization infill areas.
Today marks the first issue of AZBEX’s 15th publishing year. We usually include an Editor & Publisher’s choice retrospective of our favorite stories from the preceding 12 months in our company’s New Year’s edition. Today we’re doing something different and giving you a peek behind the curtain to show you a glimpse of what goes into putting together one of our front page columns.
Omninet West
As anyone who reads AZBEX knows, in addition to our original coverage and analyses of new projects and ongoing industry trends, we also summarize construction and development articles from more than 20 other local and national outlets.
In doing the news review for today’s issue, I found the article linked above. Owner Omninet Capital LLC has requested a two-year extension to the required construction start date for Omninet West, a development first approved in 2015 to build a 283-unit multifamily project with 15KSF of ground floor retail/commercial space on approximately three acres at the NWC of Central Avenue and Pierson Street in the light-rail-centric Uptown area of Phoenix.
The application to the Phoenix Planning Hearing Officer said the project had initially been set to start construction by the end of 2022 and had received an extension to 2023. The PHO has set a hearing for Feb. 21 to consider a request for another two-year extension.
I didn’t see the project in DATABEX. Projects that have been around a while often undergo name changes, so I searched by location and found a possible match. Sure enough, a project was noted on that site, but the specifications were slightly different and it had been noted as canceled by the developer in a status update from last May. It had, however, been granted a stipulation modification for an extension in Dec. 2022.
At this point, I figured it had changed owners/developers, been sold off or otherwise modified. As BEX Market Researcher Andrea Howard said in her presentation on multifamily development at this year’s BEX Construction Activity Forecast Event, we see an increasing volume of planned projects that encounter delays with funding, approvals or permitting that sit in limbo and then end up being sold to another developer without starting construction.
When I checked the pending projects sheet, things got more confusing. Omninet West was listed as coming up before the PHO, with a note that it would be an update to the previously canceled project in DATABEX. Searching for Omninet, however, showed another project, Omninet East, that had gone before PHO to ask for an extension last May, around the same time the project that would come to be known as Omninet West had been listed as canceled.
At this point, I knew we were no longer in for a simple project update and that Research and I were going to be spending some time sorting this all out. I sent the heads up to Andrea and to DATABEX Manager Lya Parrish that I was following this story and that several details weren’t adding up. Lya sent the response that opened this article shortly thereafter.
Looking at the PHO request for Omninet West submitted by project representative law firm Burch & Cracchiolo quickly filled in the timeline of events for the development since it was initially canceled. “Omninet retained ownership of the Site after its purchase agreement with a previously anticipated developer expired shortly prior to the time the City Council approved the PHO modification in 2022. After the purchase agreement terminated, Omninet resumed efforts to work through the Site’s various design and infrastructure challenges, obtain an updated preliminary site plan approval, and prepare, submit, and process a final site plan and (Construction Documents).”
It goes on to say Omninet has submitted the site plan and construction documents and is awaiting City review, but that the review won’t be complete before the existing extension timelines expire. The site plan, elevations and other items from May 2023 list Carpira Design Group as the architect. The preliminary approval report from the City of Phoenix Planning & Development Department dated June was issued to Todd & Associates, the design firm for the initial plans for the original development planned by RangeWater Real Estate before the purchase agreement was terminated.
The extension will also allow Omninet time to get the financing in place when all the administrative reviews and preparations are completed.
Okay, one mystery solved.
Omninet East
The article made a passing reference to Omninet East but didn’t say much other than the two sites are in proximity to each other.
The full story on this development goes back at least eight-and-a-half years. An article from October 2015 reported Omninet Group had planned sister projects—Omninet West and Omninet East—at Central and Pierson on either side of Central.
Omninet East was sold to Central Avenue Owner LLC in 2019, according to documents from the Maricopa County Recorder. Central Avenue Owner also requested an extension in 2023, after having been approved for a five-story building with 181 multifamily units and ground-floor commercial in 2016. The original approval stipulated commencing construction within seven years. The request looked to extend that to 10 years.
One Camelback
It was at this point that things became even more interesting. The contact information and address on file for Central Avenue Owner LLC are the same as Camelback Owner LLC, the former owner of the long-stalled One Camelback development at Central Avenue and Camelback Road that was to turn a former BMO Harris Bank building into a 215KSF multifamily development.
Readers may recall One Camelback was in the news frequently last year after Camelback Owner—an entity of Sagamore Capital—defaulted on loans, with the site eventually being placed into receivership managed by Wilson Property Services. The property was eventually secured by Delphi Financial Group after a contentious battle with Wilson. Along with the battle over timing the sale of the site, a City of Phoenix report found Wilson had engaged contractors to perform electrical work without inspections, leading to the City closing the permit for the site and granting the contractor’s request to be removed from the project.
So, we now have three high-volume, high visibility projects in what could and should be one of the most attractive and easy-to-build areas of the Valley sitting dormant. One (Omninet West) remains in the hands of the original developer and may well move forward once financing can be lined up.
The second (Omninet East) remains with an owner who has had a series of problems advancing projects in the area. With about two-and-a-half years left before construction has to begin, one can hope for a resolution or a sale to a developer with the means and motivation to move things along more smoothly.
And then, lastly, we have what was once considered to be the leading national example of the potential for office-to-multifamily conversion but that has languished nearly from the time it was first announced. The latest status update from DATABEX reads: “Per Phoenix permitting as of 2/1/24: According to the grading permit inspection on 1/23/24: the project is dormant, and the permits are expired. The inspector tried to get in contact with the property manager to inform them of the expired permits. The latest inspection, on 1/31/24, states that there doesn’t appear to be activity.”
As I said at the beginning of this column, it’s the start of a new publication year. Also, Lent began this week, and with the start of the Easter season, we’re reminded of spring rebirth and renewal. Hopefully, these projects will all come to bloom in the coming months.
For the moment, however, this degree of zombie activity of projects rising from the dead only to shuffle along uncertainly is more reminiscent of Halloween.
