Tag Archives: jeff moloznik

Cityscape2-srp-azbigmedia2014-023

Mix Things Up

Jeff Molosnik

Jeff Molosnik

Mike Ripp

Mike Ripp

Howard Weiss

Howard Weiss

Too many cooks in the kitchen can spoil a soup, but with the right mix of experience, demand and legal advice, mixed-use developments can turn into a wildly successful, complementary group of projects.

Mixed-use developments are on the rise in Phoenix Metro as office buildings see the benefit of offering employees a place to work, shop, eat and seek entertainment in thriving community environments. To get one off the ground, though, requires a lot of collaboration and the clearing of many potential legal hurdles.

“The homeowner, the office tenant, the shopkeeper and the restaurant owner – each have concerns involving the layout, structure, location and function generally, including issues dealing with hours of operation, access (both pedestrian and vehicular), noise, security, costs, landscaping, utilities, insurance and so forth,” says James Connor, shareholder at Gallagher & Kennedy, P.A. “The various interests of the users may not always be aligned, and in fact, often may be in conflict.

“Creating the fundamental governing and controlling development agreements to serve all interests of the various users, while not undermining the value as an investment nor impeding the ability to obtain financing, is challenging,” Connor adds. “These agreements must deal with not only the development and construction periods, but of course, the indefinite life of the project for decades (if not longer) in duration.”

While drafting agreements that make everyone happy (enough) is key to the success of a mixed-use development. The financing is perhaps one of the biggest non-starters.

“Because most developers have a goal of selling the project upon realization of stabilized cash flow, care must be provided to allow for each component to be able to be defined and conveyed, in order to market parcels to the strategic investors,” Connor says. “Put another way, a REIT which invests solely in office projects will have little appetite to acquire a parcel which includes retail, residential or other uses.”

Experts note that mixed-use projects are increasingly a response to less available land for new development in dense metropolitan areas.

“What makes a given mixed-use project unique depends to a significant extent on whether you are dealing with a ‘vertical’ or a ‘horizontal’ mixed-use project, and whether the project is being developed by a single developer or multiple developers,” says Mike Ripp, an attorney at Ryley Carlock & Applewhite.

Vertical projects, he says, are the most complicated type of mixed-use development.

“The uses are more physically interdependent on each other and that components on the lower floors may need to be in use before the upper floors are complete,” he says.
“The reason these projects are becoming more popular is because people like to live, work and play all in the same area. People like having access to these types of things,” says Nussbaum, Gillis & Dinner attorney Howard Weiss.

From a consumer standpoint, mixed-use developments make life easier. That said, it’s a long journey to the “parcelization scheme” that will grab investors, developers and tenants.

“As mixed-use projects become more prevalent nationally, it is likely that standard ways of handling the more common mixed-use project issues will evolve and gain acceptance,” says Ripp.
“Some lenders find mixed-use projects difficult to evaluate because of the lack of real comparables,” Ripp says, adding that underwriting the many components of development and being able to judge whether a developer has sufficient experience all the product types are also of concern to lenders.

Every single use at CityScape was financed independently of the others. It built a hotel, occupied it and then built apartments above. Instead of phases expanding horizontally, CityScape expanded vertically.

“The idea of having to vertically finance the phasing of a mixed-use project has been one of the most complicated things we’ve had to do here,” says Jeff Moloznik, general manager of CityScape. “That part of it was far and away one of the most interesting and intricate elements of what happened,” says Moloznik of the design and engineering work as well as the financing of the CityScape phases, which happened over a seven-year span.

Additionally, Weiss points out, discrepancy between parking ratios for the different components can sometimes occur. Another issue, he says, comes to leasing. As a tenant, he says, you may not have as much control over eliminating competition — for instance, being the only sub shop in the complex. Operating expenses, too, are important to define for the respective uses.

The expenses for elevators, cleaning and janitorial services or security are not always shared by all the tenants in a mixed-use development, he adds, citing the vertical and disjointed CityScape as an example.

“There’s always an issue with the allocation of these expenses,” says Weiss.

It is easier, he says, for projects such as Kierland or Scottsdale Waterfront, which have different components in different buildings — spread horizontally. “In that type, from a legal perspective, you’ll deal with reciprocal easement (REAs) and operational agreements,” says Weiss.

That means that during development, if different components are owned or developed by separate companies, they can sign an agreement that allows for the most beneficial coexistence through contractual obligation.

“There are a lot of commercial leases out there, but at the end of the day a landlord wants a lease that specifically works with their project,” says Weiss. “Because each one has a unique component, and depending on the developer, I would say this would be handled more on a case by case basis.”

Lawless Denim_ready made jeans

Lawless Denim Opening First Store at CityScape

Lawless Denim & Co. will be the first and only denim manufacturer in the state of Arizona when it opens the doors of its first store at CityScape Phoenix on Oct. 12 offering 100 percent handmade, custom-fit jeans, denim clothing items and leather goods.

The 3,200-square-foot space will serve as both a retail location and a manufacturing shop that will feature reams of 25 different types of selvedge denim for customers to choose from in 10 different styles. With everything made by hand, the manufacturing area will have professional tailoring stations, vintage sewing machines used for stitching and cutting tables. Customers will be assisted by denim smiths and in-store designer Maya Vita to select sizing, denim type, cut, style, stitching color and button finishes. Each pair of custom jeans are priced around $245.

Lawless Denim & Co. products stay true to classic American denim manufacturing with brass hardware, vintage-sewn stitches and the highest quality American and Japanese selvedge denim. Selvedge denim is made in small batches on pre-WWII vintage looms, much like the ones Levi Strauss used when first making blue jeans in the 1870s. The limited release of each batch of selvedge denim ensures customers receive unique and specialized denim weight, color and texture. Lawless will also have ready-made jeans available for purchase that can be tailor fit and priced from $85 to $180.

“It’s all about keeping with tradition and bringing each customer a truly unique and custom-made pair of jeans that will easily become their favorite pair of jeans,” said Roman Acevedo, Phoenix resident and owner of Lawless Denim & Co. “You can’t get anything like this in Arizona. In cities like New York and Los Angeles, you’ll typically pay $400 for custom jeans. Our jeans are handmade to your body type with high-quality denim in classic styles that will never go out of style. The best part – you’re part of the design process.”

Other custom-made items at Lawless include denim jackets and leather goods such as belts, wallets, accessories and bags. Acevedo purchased a rare Italian belt cutter that will be the only one in Arizona.

In celebration of its grand opening week, Lawless is offering customers a custom-made pair of jeans for $175 from Oct.13 through Oct. 20. Also, men’s and women’s ready-made jeans in white oak raw selvedge denim will be on special for $107.

“Lawless Denim & Co. is a prime example of the entrepreneurial spirit taking place in downtown Phoenix. Roman is drawing attention to a great American tradition of denim manufacturing and its authentic connection to Arizona. Today’s consumers expect quality, craft and authenticity. Downtown is all about reinvention and Lawless embodies that,” said Jeff Moloznik, vice president of development at RED Development.

Lawless Denim & Co. is open Monday through Saturday from 11am to 9pm and on Sunday from noon to 7pm. For more information, call 602-288-8302.

Potbelly Sandwich Shop and Menswear Retailer

CityScape Adds Potbelly Sandwich Shop, Menswear Retailer

CityScape Phoenix will introduce yet another first for Arizona with the opening of Potbelly Sandwich Shop, the popular Chicago-based chain, along with the addition of the men’s apparel store, JoS. A. Bank, both coming to downtown this fall.

Potbelly Sandwich Shop will occupy a 3,000 square-foot space beside Fuego CityScape along First Street. The restaurant company has built a passionate, loyal following of fans who spread the word about the fun, energetic atmosphere and great food. The unique Potbelly Sandwich Shop experience is defined by its combination of toasty warm sandwiches, hand-dipped shakes and friendly, lively people.

“When you think of famous sandwich shops with cult followings, Potbelly is definitely on the list. We’re thrilled to be able to bring this East Coast favorite to Arizona,” said Jeff Moloznik, general manager of CityScape. “Potbelly Sandwich Shop is the perfect addition to the variety of restaurants we have at CityScape Phoenix.”

Additionally, JoS. A. Bank will open a 3,600 square-foot store that offers a full selection of men’s tailored and casual clothing, footwear and accessories. With 550 stores nationwide, what makes the retailer unique is also what has attracted customers to the stores for 107 years; a heritage of quality and workmanship, an extensive selection of beautifully made, classically styled tailored and casual clothing, and prices typically 20 to 30 percent below competitor prices. The store will open in August and occupy the former Republic of Couture space.

“We’re excited to reinforce the value of dining and shopping destinations in downtown,” added Moloznik. “With Hotel Palomar Phoenix opening this week and these two major tenants preparing to open this fall, we’re playing off of a really positive momentum.”

Kimpton’s Hotel Palomar Phoenix is opening June 5 at CityScape. The boutique hotel offers 242 spacious guest rooms and suites, all with modern interior touches and views of the surrounding city and mountains. In step with the signature style of Kimpton’s Hotel Palomar, the Phoenix destination combines contemporary design with an “Art in Motion” theme embracing the undercurrent of artistic energy throughout. Amenities include approximately 10,000 square feet of multi-use space across 10 meeting rooms, which can be customized for social and business events. The adjacent Blue Hound Kitchen & Cocktails showcases a menu of new American cuisine for lunch, dinner, late-night and weekend brunch and a blazing cocktail program that raises the bar for drink culture in the city’s urban core, while the hotel’s third-floor outdoor pool terrace and adjacent Lustre bar provide a scenic venue for gathering.

For more information on CityScape and shops like the Potbelly Sandwich Shop, visit CityScape’s website at cityscapephoenix.com.

CityScape, Phoenix, Ariz. - AZ Business Magazine May/June 2011

New Retail And Restaurants To Attract People To Dowtown Phoenix

With the opening of CityScape at One E. Washington St., Downtown Phoenix now has an urban-style, mixed-use development where people can eat, shop, meet friends after work, relax at a boutique hotel, and even blow off some steam at the gym or roll a few frames at a bowling center.

Developers of CityScape envision retail and restaurants as being key to the project’s success. Some of the new downtown businesses include Gold’s Gym, CVS pharmacy, Charming Charlie, Urban Outfitters, Stand Up Live, Five Guys Burger and Fries, and The Arrogant Butcher. Scheduled to open in March 2012 is the 4-star Kimpton Palomar Hotel.

“If you have a comedy club, a couple of bars, a fine dining place, a yogurt shop, a burger place and a taco shop, it gives people more of an incentive to check (CityScape) out,” says Peder Bondhus, manager of Vitamin T, an already established Aaron May restaurant at CityScape.

Part of what CityScape has accomplished is due to its relationship with the Greater Phoenix Convention and Visitors Bureau (GPCVB) and the Downtown Phoenix Partnership.

“The Greater Phoenix CVB has been a relentless touring campaign,” says Jeff Moloznik, RED’s development manager. “We spend a lot of time with them touring prospective delegates to the downtown market and CityScape. They also help us with discussing what amenities are available for those who are considering coming to Phoenix for a convention.”

Moloznik says he believes that the success of downtown as a whole hinges on the collaboration of all of downtown’s stakeholders.

“ASU, the (Phoenix) symphony, Comerica, the sporting arenas, CityScape — we all contribute to what is good about Downtown Phoenix,” he says.

Adding to the mix of retail and restaurants are the Phoenix offices of several major law firms including Polsinelli Shughart, Squire Sanders & Dempsey, and Ballard Spahr. The building also houses Alliance Bank, Fidelity Title and RED Development.

And by the end of the year, UnitedHealthcare of Arizona plans to move 600 of its Valley employees to CityScape.

Restaurants scheduled to open later this year offer diverse meal selections, such as American-style breakfast or lunch at The Breakfast Club, Italian cuisine at The Strand, French favorites at La Crepe Nanou, and Japanese options at Silk Sushi.

“We have the utmost confidence in CityScape and the synergy it’s brought to Downtown Phoenix,” says Kyle Shivers, owner of The Breakfast Club. “We’re a breakfast and lunch venue, and the density and daytime market (in Phoenix) is exactly what we’re looking for.”

The only stumbling block CityScape has experienced so far occurred early this year, when LGO Public House pulled out of the project due to zoning and code restrictions relevant to a wood furnace burner.

 

Arizona Business Magazine May/June 2011