By Roland Murphy for Arizona Builder’s Exchange
Downtown Phoenix is about to be overrun with zombies, and the skyline will never be the same. Fortunately, these are the types of returns from the dead that developers and economic planners love to see.
Two projects that languished at death’s doorstep for years have rumbled back to life, carrying on a pace of downtown development activity that is anything but apocalyptic.
In the first, Phoenix City Council voted to assign and amend the City Contract for Development of 200 W. Monroe St., a full city block at Monroe Street and 2nd Avenue. The original proposal called for, “…approximately 350KSF of office space, 900 structured parking stalls, 3.5KSF of public incubator space for emerging business enterprises…, ground floor commercial space and a commitment to provide parking for Orpheum Theatre events on weekends.”
Council had entered into an agreement with Chicago-based Golub Real Estate Corporation in December 2012 to create the project, but Golub was not able to carry it out due to the impact of the Recession on the downtown office market. The firm had originally planned to break ground in Q2, 2013 and complete the project in two years, according to a June 2012 article in Crain’s Chicago Business.
Recently, Golub has been working with XSC 200 W. Monroe Acquisition, LLC, also out of Chicago, to acquire the site and the development agreement in hopes of resurrecting it.
Under the revised agreement, the plan has been amended to be, “…a two phase, mixed-use, high-rise project with two towers with approximately 600 residential units, 40KSF of commercial space, 1,000 structured parking stalls, and associated streetscape.”
The previously authorized Government Property Lease Excise Tax agreement would remain in place. The GPLET excise tax abatement would remain in effect for eight years after the certificate of occupancy is issued.
Phase 1 will consist of 300 residential units, 650 parking stalls and 20KSF of commercial space. Under the performance benchmarks, construction must begin within 24 months of signing the amended agreement and be completed by Dec. 16, 2022.
Phase 2 would be required to enter a lease by Dec. 16, 2022, with construction to begin within 24 months and finish within 36 months.
At least a month before submitting preliminary plans, the developer will be required to submit a site plan and elevations for review. The city’s Community and Economic Development and Planning and Development departments will review and provide feedback within two weeks to give the developer time to incorporate feedback into the preliminary plans.
According to staff information included with the request for the revised agreement, the project is expected to generate more than $280K/year in rental tax revenue, $2M in construction sales tax revenues and $200M in new investment downtown.
Block 24 (Residence at Collier Center)
The other project winding its way through the process is development of the final parcel at the Collier Center, which dates all the way back to a 1991 development agreement between Phoenix and Barron Collier Company. The agreement enabled the development of what has come to be known as Block 23 and Block 24.
According to the Reaffirmation of Business Terms approved 7-1 by Phoenix City Council in December, Barron Collier Company and Opus West developed most of Block 24 in 2000, creating an underground parking garage, office tower and retail/commercial space.
In the modern reanimation, Hines will create a high-rise multifamily residential and retail space on the SEC at 3rd Street and Jefferson. Reports vary on the planned height, with some sources calling for 25 stories and some for 30.
In forwarding AZBEX a tip about the project, a source noted the site prep for the second tower took place in 1998. “This Phoenix Block 24 pad was prepared in 1998 for a second high-rise… so I’m glad that 20 years later one is finally going to happen,” he said.
Like the 200 W. Monroe St. project, this one also comes with GPLET arrangement. In the original development agreement, the approved business terms carried a 60-year lease term under an earlier version of the incentive program known as Possessory Interest Tax, with an abatement for eight years. Due to changes in state law in the intervening years, the new lease term will be 25 years and will not have an option for extension. The abatement term will still be eight years.
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