By Rebekah Morris for AZBEX
On Wednesday, July 22, 2020, BEX held a panel discussion regarding upcoming retail, hospitality, and entertainment projects in the Valley and beyond. Participants included Jeff Mills, Project Executive for PENTA Building Group, Dave Sellers, President & CEO of LGE Design Build, and Aaron Studebaker, Community Development Project Manager for Salt River Pima-Maricopa Indian Community (SRPMIC). The discussion was moderated by Rebekah Morris, President & Founder of BEX.
Overview of Current and Upcoming Projects
PENTA Building Group previewed their current projects, including nearly 1MSF of convention center space recently completed in Las Vegas, a High-Limit space at Talking Stick Resort, and new facility expansion at San Manuel Yaamava, located in Highland, CA. Beyond Arizona’s borders, PENTA is active in Las Vegas and Los Angeles with commercial, tribal, medical, and hospitality projects.
LGE Design Build continues to be an active player in the retail, hospitality and entertainment spaces, bringing to life such projects as the Downtown Gilbert Heritage District, Overstreet mixed-use development in Chandler and Chauncey Lane mixed-use development in Scottsdale. In the last few years, LGE Design Build has expanded into the industrial and distribution side, as well as expanded their geographic reach into California and Texas. Their industrial pipeline now exceeds the volume of their office/retail pipeline. In addition to acting as developer and design-builder, the brand also encompasses Creation, a real estate investment and private equity arm. The team is also partners in various restaurant ventures throughout their developments.
SRPMIC is a dual-tribe regulatory entity involved in crafting development deals on behalf of tribal owned land and ‘allotted’ land, or land owned by individual families. Across the 52,600 acres, ten developers are active with master ground leases, more than 50 individual businesses have negotiated leases, and 11 major enterprise developments are active including Salt River Fields at Talking Stick, Talking Stick Resort, and Salt River Materials Group. Projects in various stages of development include The Block, Nextiva Corporate Office and the Harkins Corporate Office.
Impacts of COVID-19
The panel agreed that construction projects and pipelines for deals have all started to take a hit, especially in the retail, hospitality and entertainment sectors. Mills stated that the Las Vegas market has contracted sharply, with virtually all the recently completed convention center space sitting unused at the moment. Sellers stated that the restaurants they’re involved in, mostly trendy, sit-down establishments were all affected by the stay at home orders, then marked a record Memorial Day weekend, and are all operating at around half of ‘pre-COVID-19’ levels of business. Studebaker highlighted a bright spot, saying that although development deals are harder to negotiate and are taking longer, the auto mall along the Loop 101 experienced record-setting sales since COVID-19 has shut down the typical buying experience.
Outlook: Conditions to Worsen Before Improving
The short-term outlook for new development opportunities in retail, hospitality and entertainment are not as rosy as some would portray. According to Sellers and Mills, the short-range outlook in this market sector is negative, but will recover when the economy recovers, large group gatherings are again permitted, a vaccine is widely available and consumer confidence returns. Studebaker indicated that while the development types might change, deals are getting done on tribal land, but they are taking longer.
Next LMS to Feature East Valley Economic Development Update
The next BEX LMS topic will feature an economic development update from the East Valley. Confirmed speakers include Doreen Cott, Town of Queen Creek; Bill Jabjiniak, City of Mesa; and Rob Millar, City of Scottsdale. Registration for this August 12, 2020 event is open now: http://bex-events.com/lms/economic-developers-east/