[Source: Jon Talton, Rogue Columnist] — It’s surprising that some appear so sanguine about the likely foreclosure of most units at the 44 Monroe condo tower. This, along with a similar fate for the Summit at Copper Square and 44’s developer Grace Communities failing to rehab the historic Valley National Bank building because of the Mortgages Ltd. fiasco, represents a devastating setback for luring private investment into downtown Phoenix. Maybe people are too shell shocked to take it all in. Maybe they’re willing to settle for things being better than they were 20 years ago, which is undeniably true. Neither option is wise for those who wish the central city well.
Make no mistake: the Phoenix depression is metro-wide. I saw rotting framing and miles of distressed subdivisions out in the exurbs. Tempe foolishly threw away its opportunity to build a mid-rise boutique downtown of national quality — now it has an empty condo high-rise and Mill Avenue is swooning again. But my conviction remains that there is no healthy major city without a strong urban downtown, and center city problems left unchecked have a habit of spreading. (And don’t be taken in by the propaganda: Phoenix did have a vibrant downtown — it was killed by civic malpractice).
In Phoenix, the past few years have seen some notable triumphs: the beginnings of a downtown ASU campus, light rail, a convention center worthy of such a tourist-dependent city, a new convention hotel, and a blossoming of independently owned restaurants. The biosciences campus has been planted (although it has been allowed to stall and, I fear, its future is uncertain). Yet major private investment has not followed; 44 Monroe and the Summit represented the strongest chance for that within the existing local business model of “real estate first.” The many towers proposed for the entire Central Corridor are now blighted empty lots. CityScape? I’ll believe it when I see it. What I see is a homely suburban design, not the soaring “game changer” sold to the public on the front page of the newspaper.
The great recession, the great reset: Where will they leave downtown Phoenix and the Central Corridor? It’s tough all over, now that a commercial real-estate crisis will follow the explosion of the residential and mortgage bubble. Nationally, suburbs and exurbs are being hit harder than downtowns. Suburban poverty is spreading. The massive destruction of wealth and overhang of leverage make restarting the sprawl machine of old impossible. Smart places, such as Denver, are trying to retrofit the suburbs for a higher energy future. Some suburbs themselves are working to provide walkable, mixed-use and even urbanish neighborhoods.
The headwinds in Phoenix are different. Most people have blinkered suburban values — they can’t imagine a different life. City Hall’s decisions to clear-cut hundreds of buildings and drive out businesses that catered to the working poor have left Phoenix without the bones that other cities have used to revive their cores. The old headquarters companies were bought or dismembered and their successors often keep only token presences in downtown (imagine, for example, if Wells Fargo had built its operations center downtown instead of in Chandler). And the limited economy leaves few non-real estate businesses anyway. I could go on, but what can be done now, in the reset? [Note: To read Jon’s recommendations, click on Downtown Phoenix 2.0?]
[Source: Andrew Johnson, Arizona Republic] — The U.S. Securities and Exchange Commission has resolved fraud accusations it brought against an investment arm of failed commercial real-estate financier Mortgages Ltd. The federal agency on Monday announced that Mortgages Ltd. Securities LLC agreed to an order revoking the company’s registration as a securities broker-dealer.
The SEC also sought $7.3 million in penalties and prejudgment interest but waived the amount because the investment firm demonstrated a lack of funds to pay. The action stems from the downfall of Phoenix-based Mortgages Ltd., once considered Arizona’s largest private commercial lender.
Mortgages Ltd. distributed more than $900 million in loans for real-estate acquisitions, development, and construction projects… Mortgages Ltd.’s failure led to the collapse of several high-profile real-estate projects, including Hotel Monroe in downtown Phoenix and the Centerpoint condo towers in Tempe. It also left the company’s thousands of investors, many of them retired, in the lurch. [Note: Read the full article at Fraud case ends for Phoenix’s Mortgages Ltd.]
[Source: Dana Caporaso, ABC News 15] — More than 30,000 runners from around the world laced up their shoes for the Valley’s seventh annual P.F. Chang’s Rock ‘n’ Roll marathon. From professional runners to part-time joggers, kids to adults, the contestants say completing the marathon is like nothing else. “The satisfaction that I completed something that a lot of people didn’t do, I guess I got up and did it and that feels good,” says contestant Alison Lopez.
Hassan Shariff says this wasn’t his first time running the marathon. “I’ve done it once before and I really want to finish it today. My real focus is I just want to do it again and maybe at a better time,” said Shariff.
The P.F. Chang’s Marathon is the largest single day marathon and half marathon in the United States. The course started in downtown Phoenix and ended up in Tempe. [Note: To read the full article, visit Nation’s largest single-day marathon starts in downtown Phoenix.]
[Source: Arizona Republic Light Rail Blog] — An Arizona State University grad has launched a free iPhone application to help people ride Phoenix’s light rail system. For each station, it features a map, bus connections, a train schedule and travel times to other train stops. The app also has “how-to” information for riding the system and using fare machines. Since he launched the app on Dec. 8, Mitch Karren says 750 people have downloaded it. The curious come from 25 different countries, from China, which has the most subscribers outside the United States, to Mid-East minnow Qatar.
Karren graduated in June 2008 with a degree housing and community development, the exact worst time to jump into Arizona’s turbulent real estate industry. A week later he was laid off from his real estate related job. He decided to enroll in a class to learn how to write iPhone apps. “I noticed other cities had pretty well established iPhone apps for their transit systems,” he said. “I wanted this to be a service to Phoenix.”
The service has been well received. Thirty-three people posted reviews, mostly giving it five stars. Comments range from “wicked, awesome,” to the one critic who calls it “predictable.”
Karren is seeing a steady 22 downloads a day, with only word-of-mouth for marketing. About 500 users have accessed it 1,500 times. His analytics data tells him Saturday is the busiest day people use the application and the 8 p.m. hour the busiest hour in each day. People are most interested in information for the end of the line stations. In the spring, Karren plans to update the app with information about surrounding businesses. Ultimately he wants to give people real-time information about where the trains are. In time, he’s hoping to expand the service to Blackberry and Android phones.
[Source: Amanda Lee Myers, Associated Press] — When passengers began riding new light rail trains in the Phoenix area last December, many questions were on their minds. Can light rail succeed in a city where car is king? Will the trains survive searing desert heat in the summer? Is it worth the $1.4 billion it cost to build? A year later, the system is carrying 50 percent more people than expected, the trains survived the summer and kept riders cool, and many of the kinks of introducing a new mode of transportation to the nation’s fifth largest city have been worked out.
Now the big question is: Can light rail continue to maintain its ridership and service amid the recession while moving forward with plans to expand the system from 20 to 57 miles? “It’s going to be very hard. The challenges are going to be severe,” said Rod Diridon, executive director of the San Jose, Calif.-based Mineta Transportation Institute, a nonpartisan research group that conducts transportation policy studies.
Diridon said it’s “absolutely remarkable” that Phoenix has managed to see higher ridership than expected while maintaining service this past year. “All across the nation transit systems depend on sales and property tax dollars, and because sales tax revenues are down in some places as much as 50 percent, service has been cut back and ridership is down in most places,” Diridon said. “The opposite is true in Phoenix. They’ve retained ridership and maintained service. That’s a phenomenal success given the state of the economy.”
It’s not been an easy task for light-rail operator Metro. The agency had to pay about $500,000 more than the expected $1.5 million to keep the trains cool all year long, fund an educational program for passengers who were inadvertently not paying for their rides, and lay off about 20 people. [Note: To read the full article, visit Phoenix area’s light rail system marks 1st year.]
[Source: EV Living] — Glendale is home to two professional sports franchises, an Air Force base, and more than a few casinos, but not the Metro Light Rail. Valley Metro introduced the light rail in December, 2008, with a 20-mile route extending from Mesa through Tempe, and into Phoenix.
The light rail is the first of its kind in the Valley. Although effective in transporting Arizona State University students between campuses, fans to downtown Phoenix sports complexes, and commuters going to work, the rest of the Valley has yet to feel its impact. But Valley Metro has future extension plans in the works.
According to http://www.valleymetro.org, they plan to extend further into north Phoenix, further east into Mesa, and west to Glendale between 2012 and 2030. The Valley Metro board is already beginning to enter into a study phase of five different routes to the Glendale area, Metro Light Rail Public Information Officer Hillary Foose said.
Some of the proposed routes include one to historic downtown Glendale, one west along Interstate 10 and north on Loop 101, and one going along Glendale Avenue, Foose said. Initial plans were to have the extension go directly to downtown, however after some uproar they decided to look into other options. “Plans are still very preliminary at this point,” she said. [Note: To read the full article, visit Future light rail extensions to Glendale in study phase.]
METRO and 39 Valley arts and culture venues are marking National Arts and Humanities Month with a new light rail destination guide. The 33-page full-color METRO Arts and Culture Ride Guide features photos, descriptions, and contact information for each venue on the line in Phoenix, Tempe, and Mesa, along with station maps and bus connections.
Getting to great entertainment is as easy as (1) choosing the venue, (2) using the guide to find the nearest light rail stop, and (3) buying a transit pass at any light rail station.
Click here to download a PDF version of the Arts and Culture Ride Guide and review special discounts offered by arts and culture venues to celebrate the release of the Guide. The printed guide is available at visitor centers, arts venues, and hotels along the light rail line.
[Source: Mike Sunnucks and Jan Buchholz, Phoenix Business Journal] — Some Valley city council members are frustrated with the lack of updates they are getting from real estate developers regarding projects tabled by the market crash and recession. A slew of construction projects have fallen short of expectations, and council members across the Valley are giving developers and their lawyers mixed reviews on keeping their respective cities updated.
“No, no, no, no, no,” Tempe City Councilman Ben Arredondo said when asked whether he’s been kept up to date on the status of stalled projects — including the Tempe Centerpoint condo high-rise, which is in Chapter 7 bankruptcy and sits unfinished on Mill Avenue. Arredondo said he’s not getting frequent or detailed enough updates on Centerpoint or other projects. He said developers — especially those in distressed situations, such as Centerpoint — aren’t giving Valley cities straight answers on their projects. “I don’t think they are ever going to give us the bottom line,” Arredondo said.
Developers and their various lawyers aren’t specifically obligated to keep cities updated on their projects, but some city council members are worried about the status of delayed or abandoned developments and how they might hurt short- and long-term economic development.
Centerpoint developer Ken Losch did not respond to requests for comment. Centerpoint is not the Valley’s only distressed real estate development. The Hotel Monroe redevelopment in downtown Phoenix sits empty and boarded up. Downtown condos such as 44 Monroe and the Summit at Copper Square are mostly empty, and a significant number of suburban subdivisions and commercial developments are unfinished or delayed because of lack of demand and financing.
“I think that everyone is cautious and holding close to the vest. This goes beyond the developers, as end-users are placing projects on hold,” said Surprise City Councilman John Williams. “That said, I believe much of the information shared is often one-sided and biased and may not reflect the exact state of our economic recovery.”
Valley cities signed off on scores of retail, condo, single-home and commercial projects during the real estate boom. Now, many of those projects are on the back burner. “Many of (the planned projects) look foolish in hindsight, but most looked really good at the time,” said Phoenix City Councilman Tom Simplot…
After extensive efforts to obtain updates on several of the largest mixed-use developments in the Valley, few elected officials wanted to discuss the uncertain, even dire, financial situations facing some of them. The Phoenix Business Journal asked for comments about those projects — including CityScape, CityNorth, and Main Street Glendale — from the cities of Phoenix, Glendale, Tempe, Scottsdale and Chandler. The only responses from public officials are those noted above. [Note: Read the full article at City council members annoyed by lack of communication from developers.]
[Source: Arizona State University] — Enrollment at ASU this fall has reached a record 68,064 students, a thousand more than last year’s 67,082. ASU’s enrollment has grown by nearly 13,000 students since 2002, when it adopted the mission of becoming a high-quality, high-access university.
- The Downtown Phoenix campus grew to 11,503 students in its fourth year. Last year there were 8,431 enrolled. (26.7%)
- Enrollment at the West campus grew to 10,380 from 9,572 last year. (7.8%)
- At the Tempe campus, 55,552 students are enrolled, increasing over last year’s 52,734. (5.1%)
- Enrollment at the Polytechnic campus in Mesa is 9,146, down from last year’s 9,614. (-5.1%)
More students are attending ASU full-time, almost five percent more than last year. Of the total enrollment, 13,787 are graduate students. The number of ethnic minority students increased more than seven percent, from 17,334 to 18,600. The proportion of ethnic minority students among first-time freshmen increased from 31.5% to 34.2%.
Campus enrollment figures total more than the overall unduplicated count of 68,064, as ASU students take advantage of the courses that are offered by departments throughout the university, not just at the campus that is the academic home of the student.
[Source: Mike Sunnucks, Phoenix Business Journal] — Four years ago, Phoenix Mayor Phil Gordon announced he wanted to rehabilitate run-down areas along the 12-mile stretch from the Arizona Capitol through downtown Phoenix to Arizona State University in Tempe. Dubbed the Opportunity Corridor, it was to be filled with new office, residential, biomedical, and industrial developments. Today, inopportune times have stalled those plans.
Van Buren and Washington streets east of downtown still are dilapidated and, in some cases, are worse off because of the recession and real estate crash. “It’s just in the tank,” said Mark Dioguardi, a real estate expert and attorney with the Scottsdale law office of Dioguardi Flynn LLP.
Like much of the Phoenix commercial real estate market, Dioguardi said the Opportunity Corridor is plagued by foreclosures, unsold vacant lots, shuttered businesses, and almost zero transactions, financing, and construction. [Note: Read the full article at Phoenix’s Opportunity Corridor knocked by recession.]