Looking back (and forward) at $4.8 billion worth of Downtown Phoenix investment

Above: Block 23 will house the area's first grocery store, along with office and apartment spaces. (Rendering courtesy of RED Development) Real Estate | 5 Jul, 2017 |

Downtown Phoenix is where history meets the future.

Over the last couple decades and especially in the last five years, a combination of factors, investments and new developments have aided in the revitalization of Downtown Phoenix and its continued resurgence into the future, which fosters a live-work-play environment unlike any other urban market in the Valley of the Sun.

Between 2005 and 2016, the broader 1.7-square-mile redevelopment area in downtown experienced more than $4.8 billion in investments for things like transportation, office, residential, education as well as research, arts, culture, sports and hospitality.

Today, Downtown Phoenix is a hotbed for new projects, most notably new multifamily developments and redevelopment of older spaces into creative, open offices or trendy bars, restaurants and event venues.

The Downtown Phoenix Partnership has played a fundamental role in this process since being created in 1990 as a nonprofit organization dedicated to strengthening development within the 90-square-block area known as the Downtown Phoenix Business Improvement District.

Dan Klocke, executive director of Downtown Phoenix Partnership, says, “We’ve seen a real acceleration in the last 5-7 years,” which he attributes to a combination of different development stages in the area that created a one of a kind downtown neighborhood.

HOW IT GOT STARTED 

The focus in the early 1990s was on large, critical projects like the Arizona Center, Phoenix Suns’ stadium, Renaissance Square, Arizona Diamondbacks’ stadium and the convention center, which were created to bring people downtown, says Klocke.

“Then in the 2000s,” he adds, “there was a flurry of activity around the ‘meds’ and ‘eds,’” meaning the development of the Phoenix Biomedical Campus and Arizona State University Downtown Campus.

Since then, the Phoenix Biomedical Campus has grown to 1.6 million square feet and now includes facilities for ASU, NAU and UA with more planned in the coming years. Meanwhile, the ASU Downtown Campus has also grown with more than 12,000 students attending class there each day.

With more bodies, employees and visitors coming to downtown, the next development stage included a wave of new restaurants and bars, which Klocke says, “tend to be the life-blood of downtowns because they bring people in.”

Then, he adds, “The nightlife from restaurants and bars began to stimulate people thinking about living in downtown, which has led to the residential explosion.”

An explosion totaling more than 3,600 new apartments currently under construction or planned in Downtown Phoenix, according to a report by ABI multifamily.

“When you look at all the different stages that we have gone through, we have actually created a neighborhood,” Klocke says.

The people coming to Downtown Phoenix to live, work and play today are a mix of Baby Boomers and Millennials with different interests and hobbies, adds Klocke, but they all share a desire to be in a true urban core environment.

“We’ve created an atmosphere down here that’s appealing to a lot of people now,” he explains. “It’s an atmosphere we didn’t have five years ago.”

WHAT’S MISSING IN DOWNTOWN?

Downtown Phoenix boasts an extensive amenity package located right outside a resident’s front door, but the area still lacks convenient access to goods and services like a grocery store, which is a critical component to any community – urban, suburban or rural.

Block 23 will be home to the area’s first grocery store, a Fry’s Food Store, which has long been sought after by residents and city leaders. Slated for completion in 2019, Block 23 will also include approximately 330 apartments by StreetLights Residential, 200,000 square feet of creative office space, restaurant and retail uses along with above- and below-grade parking.

Block 23 marks the third phase of the CityScape project, which Jeff Moloznik, vice president of development at RED Development, says, created a precedent for large mixed-use projects that didn’t exist previously in Downtown Phoenix.

“What we have today by the way of the first phase of CityScape is a very strong comparable rent model to support this type of high density, high-rise mixed-use development,” he explains. “We are starting to witness a pent up demand for this type of lifestyle and I think that will only increase as we add more goods and services to downtown.”

HISTORIC BUILDINGS GET NEW PURPOSE

The changes to Downtown Phoenix over the last half century have been remarkable, just ask Pat Cantelme, a Phoenix native who grew up downtown witnessing the changes first-hand.

Today, he is active in rehabilitating the historic buildings in the area as the managing partner for Welnick Marketplace LLC and SoHo on Van Buren LLC.

He currently has four buildings under construction in Downtown Phoenix, which combine the iconic look and feel of historic properties with re-imagined uses, giving it new life and purpose.

Two of those buildings share a common wall on the southeast corner of Fourth Avenue and Van Buren Street. Originally built in 1927, it was home to the historic Welnick Brothers Market and the Liefgreen Seed Company.

After completing renovations to both buildings, Cantelme says, both are ready for occupancy and the potential tenants already showing interest include breweries, restaurants, a wine bar and hair salon.

He is also redeveloping two historic buildings, dating back to 1930, on the opposite side of the street with the duo behind the Crescent Ballroom and Valley Bar. The plans call for redeveloping the former Phoenix Motor Company’s auto dealership into a 2,000-person concert venue called The Van Buren Theatre, which should finish construction in June and already has big events booked for September, adds Cantelme.

“These projects will change the outlook of West Van Buren and I think it will be the catalyst to continue development further west,” says Cantelme. “That will really become a destination for dining and entertainment in Downtown Phoenix.”

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