Flagstaff benefits from 1st-of-its-kind public-private partnership

Real Estate | 11 Feb |

Six years ago the Arizona Department of Transportation was facing an impossible task: how to revamp or relocate its 65-year-old Flagstaff headquarters without using any public funding. At the same time, the City of Flagstaff was struggling with the dangerous traffic congestion on its overcrowded roadways. Enter Vintage Partners, the Phoenix-based commercial real estate development and investment company, which devised a unique three-way, three-phase public-private partnership and land swap that allowed Vintage to adaptively reuse the old Harkins Theatre to create a headquarters for both ADOT and the AZ Motor Vehicle Department.  Additionally, Vintage Partners created the right-of-ways necessary to provide a regional roadway solution, moving traffic off an already overcrowded Milton Road.  Best of all, this first-of-its-kind public-private partnership also helped revitalize a local mall, and increased city tax revenue, without raising taxes or using public funds.  

First, Vintage Partners partnered with the Arizona-based Harkins Theatres to construct and then relocate into a larger, all-new theater adjacent to Flagstaff Mall.  This new theater doubled sales tax revenue to the City of Flagstaff.  Then, Vintage transformed the old movie theater into a state-of-the-art regional headquarters for both ADOT and the AZ Motor Vehicle Department. Now, Vintage Partners will transform the former ADOT property into a mixed-use project featuring student housing, including a regional roadway system and incorporating dedicated bus lanes to reduce congestion, creating a pedestrian underpass to allow student to walk, bike or ride public transport to campus, moving 5,000 students per day off a roadway that has previously seen 170 pedestrian/vehicular incidents per year.  

“The genesis of this project started in 2009 when the AZ legislature passed a bill encouraging public-private partnerships to accomplish streamlined results for the taxpayer,” says Walter Crutchfield of Vintage Partners. “ADOT owned the land on Milton, but did not have the funding to build a new office to replace their 65-year-old building. The City of Flagstaff didn’t have the funds to buy the property and move traffic off Milton and improve the intersection of Beulah and University. With this new partnership, Vintage Partners has activated underutilized land to generate tax revenue and provide much needed traffic relief for the city, without the need to raise taxes to fund the improvements. 

In fact, the City of Flagstaff is already benefiting from this unique partnership, as the expanded 16-screen Harkins Theatre has doubled sales tax revenues, while also bringing increased 500,000 people a year to the Flagstaff Mall and nearby businesses. Plus, by repurposing and expanding an existing building into a new, 70,000 sq.-ft. ADOT HQ, the City was able to reduce its ecological impact, helping the city to fulfill its commitment to combating climate change.  

Aside from rerouting vehicular traffic, Vintage Partners also worked with the Northern Arizona Intergovernmental Public Transportation Authority (NAIPTA) to add bus-only access lanes to Mill Town, and seamlessly integrate it into existing public transportation to help keep cars in the garage and allow student to ride public transportation to campus, or simply walk or bike via Mill Town’s planned underground pedestrian crossing under Milton Road. “This project is truly a win-win-win for the City of Flagstaff, ADOT, Harkins Theatres and Vintage Partners, that also will directly benefit the most important constituency, the people who live and work in Flagstaff.”

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