Daily Archives: July 16, 2009
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[Source: Jahna Berry, Arizona Republic] — Six restaurants, two boutiques, and a law firm will join a $900 million project that is under construction in downtown Phoenix. CityScape is a cluster of businesses that will include an office tower, shops, eateries, a hotel, and 165 condos. The first parts of the project are expected to open in Spring 2010. The project is bordered by First Avenue, Second Street, Washington Street, and Jefferson Street.
Today, developer RED Development LLC, announced that a 27-story CityScape office building had reached a key construction milestone. The tower has topped out, which means that it has reached its final height of 368 feet. The developer also revealed the names of several restaurants that will lease space in the project. They are:
- An Asian noodle shop, and a Mexican style restaurant by chef Aaron May. May has had a hand in several Valley establishments, including Sol y Sombra and Autostrada.
- A breakfast restaurant. Kyle Shivers, plans to open a second branch of his popular Scottsdale breakfast and lunch spot, The Breakfast Club.
- Blu Burger Grille, a restaurant that boasts a “unique, high quality burger experience.” The business has four metro Phoenix locations.
- Press Coffee, a local coffee, food, and wine shop.
- Mojo, a yogurt shop.
Two clothing stores – Scottsdale-based Designer District and fashion boutique Republic of Couture – will open locations in CityScape, RED officials said. Law firm Gus Rosenfeld has also joined the project, they added. Other businesses have already announced plans to open CityScape shops. That includes restaurateur Sam Fox, who plans to create a Beverly Hills-style chop house, grocery store AJ’s Fine Foods, CVS/Pharmacy, Urban Outfitters, and Gold’s Gym. [Note: Read the full article at Six new restaurants join downtown Phoenix CityScape project]
[Source: Sean Holstege, Arizona Republic] — The price of parking in downtown Phoenix grew faster than in any major U.S. city, according to a recent industry report. The median cost of an unreserved monthly parking space was $65, up from $35 two years ago, reports real estate consulting firm Colliers International. Phoenix rates are still low, on par with Fresno, California and Columbia, South Carolina.
Charles Miscio, senior vice president of Colliers in Phoenix, tells the Business Journal that the Metro light rail and newly expanded Phoenix Convention Center have helped drive up parking rates – 24 percent in monthly rates and 12 percent in daily rates. He says the trend will continue. “With the light rail’s capability of moving more people in and out of downtown, we are beginning to see entertainment venues and businesses shift from the Camelback Corridor and other metro areas to downtown Phoenix to take advantage of light rail traffic,” Miscio said. “This shift is also driving more auto traffic into downtown, increasing parking garage usage and rates during both the daytime and evening.”
Three years ago I wrote a piece explaining how low parking rates can undermine light rail. Metro is trying to attract riders who chose to take the train over driving their personal car. By the economic laws of supply and demand, cheap and plentiful parking those riders can get to work cheaper in their cars. Metro can’t compete.
A downtown office worker who drives a car that gets 20 mpg now pays $70 a month to commute one mile, not counting upkeep or insurance. That’s significantly more than Metro’s Platinum Pass at $55 a month. Had Metro been in service two years ago, that same commuter would have paid $40 a month to drive – less than the $45 cost of a monthly pass.
Now the tables seem turned, with rail being the cheaper, but necessarily more convenient option. It’s a little more complicated because many downtown employers offer deep discounts on parking and transit. And cost isn’t the only factor in deciding how to commute. But it will be interesting to see how the competition plays out. Will parking garages charge less to capture some of the rail riders or will more people turn to the trains? [Note: Read the full blog entry at Downtown Phoenix parking costs soar, but can light rail compete?]
[Source: Jahna Berry, Arizona Republic] — Financial woes at a luxury downtown high-rise could hurt property values at similar central and downtown Phoenix condominium complexes. Last week, the lender for the Summit at Copper Square took the first step toward foreclosing on 74 unsold units in the multicolored tower near Chase Field.
Scottsdale’s Stearns Bank Arizona issued a notice of trustee sale, which says the units will be sold to the highest bidder on Oct. 14. While a notice of trustee sale doesn’t always end in foreclosure, it’s a signal that the developer is having financial problems. If the bank does foreclose on the units, those unsold condos in the 165-unit building will be sold at a discount, said Diane Drain, a Phoenix attorney. She likened foreclosures to a “black mold” that lowers property values within the building. And, “if you have several condo developments around it, and they are all in hot water, the black mold seeps out more and more and more,” she said.
The Summit at Copper Square opened near Chase Field in 2007. The condominium complex at Jackson and Fourth streets hit hard times after the Valley real-estate market tanked. The developer has struggled to make debt payments because it has been able to sell only 91 units. The Federal Deposit Insurance Corporation shut down the developer’s bank. And he credit crisis has made it difficult for W Developments LLC to restructure its debt with its new lender, Stearns Bank Arizona. The notice of trustee sale says the loan principal is for $44 million.
Developer David Wallach said that loans for the project totaled about $64 million. The developer paid $40 million and as of last year, they owed about $28 million, including interest. Wallach said that his firm is working to avoid foreclosure. “Smart developers look at all options,” he said.
The Summit’s immediate financial problems will probably not impact the fortunes of downtown Phoenix or Wallach’s plans to help build a proposed Jackson Street Entertainment District, a cluster of restaurants, nightclubs and music venues, he said. [Note: Read the full article at Downtown Phoenix high-rise’s woes may hurt other area condos]